Public schools would lose billions of dollars if the federal government breaks an election promise to remove a Coalition-era loophole from funding agreements between the commonwealth and the states.
The loophole, introduced by the former Morrison government in 2018, allows states and territories to claim up to 4% of the total Schooling Resource Standard (SRS) on non-school expenditures such as public transport, capital depreciation, regulatory bodies and preschool.
Data from advocacy group Save our Schools shows public schools have lost around $13bn in the six years since the clause was introduced. If it continues over the life of the next funding agreement, they will be short more than $26bn to 2029.
In opposition, then shadow education minister Tanya Plibersek vowed to “deal with” the “accounting tricks” that allowed states to artificially boost what they claimed was their share of the funding.
But pressed on whether the federal government would renounce the policy in future funding agreements in Senate estimates last week, the assistant minister for education, Anthony Chisholm, refused to answer.
“Obviously the current agreement is one that was put in place by the previous government,” he said. “We’re … in the process of negotiating new agreements over the course of this year.”
Asked to clarify its position on the 4% clause, the education minister, Jason Clare, said the federal government was “committed to working with states and territories to get all schools on a path to full and fair funding”.
Since 2019, public schools have lost more than $3bn each in New South Wales, Victoria and Queensland to the 4% allowance, the data shows, while schools in WA lost $1.5bn and South Australia lost nearly $1bn.
“It is outrageous that Labor governments around the country are prepared to prolong the swindle,” said Trevor Cobbold, economist and national convenor of Save our Schools. “Public schools will lose billions.”
Education ministers next meet on Friday 23 February to continue negotiations over the next joint agreement, with states pushing for the commonwealth to lift its contribution to public schools by 5%.
The Turnbull government’s Gonski 2.0 education reforms required states to fund public schools at 75% of the SRS on top of the federal contribution of 20%, leaving a funding gap.
Currently no public school in Australia, except the Australian Capital Territory, is funded at the SRS level – the benchmark for required funding based on student needs. In contrast, private schools in all jurisdictions except the Northern Territory are funded at over 100%.
Last month, the commonwealth reached a deal with Western Australia to lift its contribution to 22.5% by 2026, with the state government to make up the remaining 77.5%.
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But it was critiqued by education advocates for locking in funding at 96% due to the inclusion of costs not directly related to the education of students in schools, that were specifically excluded from how the SRS was officially measured.
WA’s minister for education, Tony Buti, told reporters the 4% clause was “all part of public funding of our education system”, adding “every other state does it”.
Cobbold said the future of public education in Australia was “at stake” in coming months.
“The new agreement with WA has set a precedent … that will defraud public schools of billions in funding over the next five years,” he said.
“All the current agreements, apart from the ACT … are compromised by these accounting tricks that condemn public schools to ongoing underfunding.
“These provisions don’t apply to state funding of private schools. Yet state governments provide school transport for private school students and their curriculum and standards regulations apply to private schools as well.”
Greens senator and spokesperson for education, Penny Allman-Payne, said if Labor planned to lock in underfunding in the next agreement they should expect the party to “fight like hell against it”.
“Labor won government in 2022 in part because they promised to end the dodginess and lack of transparency that characterised the Morrison era,” she said.
“Yet here they are, doing deals to lock in public school underfunding for the foreseeable future and calling it ‘full funding’ … that directly contradicts what they said in opposition.”
