Morrison Abandons Needs- Based Funding
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SAVE OUR SCHOOLS The Unwinding of Gonski Part 3: Morrison Abandons Needs- Based Funding Trevor Cobbold Working Paper April 2021 https://saveourschools.com.au twitter.com/SOSAust [email protected] 1 Preface This working paper aims to provide a comprehensive review of how the Morrison Government completed the demolition of the Gonski school funding model begun by the Abbott Government and continued by the Turnbull Government. It is the second of a series of papers on the introduction of the Gonski model and its sabotage by successive Coalition Governments. A third paper is planned on the funding arrangements introduced by the Turnbull Government and another will review the funding model recommended by the Gonski report and its implementation by the Gillard and Rudd Labor Governments. Comments on this paper are invited. Notification of issues not covered and mistakes of fact, analysis and interpretation will be appreciated. Please excuse any remaining typos and repetitions. Comments can be sent to the email address of Save Our Schools: [email protected] . 2 Table of Contents 1. Introduction ............................................................................................................................... 4 2. Morrison sues for peace with private schools ........................................................................... 4 3. Direct income measure of assessing capacity to contribute in private schools ........................ 7 3.1 Total funding increase.......................................................................................................... 7 3.2 Funding increase was determined in negotiation with private school organisations ......... 8 3.3 The direct income measure of capacity to contribute....................................................... 10 3.4 Adjusted taxable income is a flawed measure of capacity to contribute .......................... 12 3.5 Commonwealth funding of private schools exceeds 80% of their SRS under the DMI ..... 17 4. Choice and Affordability Fund for private schools ................................................................... 18 5. Transitional funding ................................................................................................................. 22 5.1 Low growth funding ........................................................................................................... 22 5.2 System-weighted average funding .................................................................................... 23 5.3 Census update payments ................................................................................................... 23 5.4 Adjustment assistance allows ACT private schools to double dip ..................................... 24 6. Other special deals for private schools .................................................................................... 24 7. Monitoring the distribution of government funding by private school systems ..................... 25 8. Commonwealth over-funding of private schools .................................................................... 26 9. Commonwealth/State funding agreements ............................................................................ 28 9.1 State funding of public schools .......................................................................................... 28 9.2 State funding of private schools ........................................................................................ 32 9.3 Monitoring state compliance ............................................................................................. 33 10. Total under-funding of public schools and over-funding of private schools ........................... 33 11. The Morrison Government has re-affirmed choice as its funding priority .............................. 35 12. School funding must be completely over-hauled .................................................................... 38 3 1. Introduction The Turnbull Government abandoned the Gonski vision of developing a national approach to school funding and entrenched the structural incoherence heavily criticised by the original Gonski report. It did so by amending the Australian Education Act to lock in the system whereby the Commonwealth has primary responsibility for funding private schools and the states have primary responsibility for funding public schools. Under the amended Act, the Commonwealth will fund private schools to 80% of their Schooling Resource Standard (SRS) and fund public schools to 20% of their SRS.1 The 20% cap on funding of public schools meant that the Government had abandoned taking on an increasing role in funding disadvantaged students, over 80% of whom attend public schools. Despite continuing funding increases for private schools, changes to the Education Act by the Turnbull Government attracted the ire of the Catholic Church and led to a “funding war” between the Church and the Government.2 There were also divisions between Catholic and Independent school organisations over the funding mechanism advocated by Catholic school organisations. The then Minister for Education, Simon Birmingham, acknowledged that many private schools were over-funded and said that the ‘no school will lose funding' principle would no longer apply. The Government introduced a revised capacity to contribute schedule for private schools and removed the ‘system weighted average’ arrangements for school systems so that all schools are funded according to their individual socio-economic status (SES) score rather than a system average score. Catholic organisations accused the Government of risking their current levels of funding and wanted a new way to measure the financial need of Catholic schools which would lead to higher funding. They were particularly incensed at the removal of the system-weighted average arrangements. They waged a ruthless campaign against the Government with the support of the Labor Opposition. While other factors ultimately led to the downfall of the Turnbull Government, the funding war with the Catholic Church and the divisions between Catholic and Independent school organisations were an ever-present issue in the divisions within the Government. 2. Morrison sues for peace with private schools On the day of his appointment as Prime Minister, Scott Morrison was warned by Catholic authorities that they would continue their campaign against Turnbull’s funding model unless he agreed to their demands.3 Morrison immediately sued for peace. He said that he wanted to move quickly to resolve the conflict with the Catholic Church over school resourcing and he appointed Dan Tehan as the new Minister for Education to cut a deal with the Church.4 Within hours of his appointment on 26 August Tehan was on the phone to a special negotiating team set up by the Catholic Church to sort out a deal.5 The Church negotiating team had been established in July and had a “hotline” to the Government. It was led by Sydney Archbishop Anthony Fisher.6 The National Catholic Education 1 Australian Education Act 2013, Clause 35A, 35B. 2 Samantha Maiden, How the Catholic schools sector outplayed the Coalition, The Guardian, 6 November 2018. 3 Robert Bolton, Catholic schools keep pressure on ScoMo over funding, Australian Financial Review, 24 August 2018. 4 Robert Bolton, Catholic schools signal an end to funding wars under new education minister, Australian Financial Review, 26 August 2018. 5 Robert Bolton, Minister Dan Tehan reaches out to angry Catholic Church, Australian Financial Review, 27 August 2018. 6 John Ferguson, $4bn deal to avert Catholic and independent schools backlash, The Australian, 18 September 2018. 4 Commission (NCEC) had engaged the consultancy firm Port Jackson Partners to analyse and estimate the implications of any new funding deal offered by the Government.7 A week after Tehan’s appointment, it was reported that the Government had offered increased funding of $4.4 billion for Catholic and Independent schools as a “peace deal”.8 A fortnight later, the Government had a deal. Tehan signed off on the deal in correspondence to Archbishop Fisher on 17 September and Fisher accepted the proposal on 19 September. 9 On the following day, Morrison and Tehan announced the new special $4.6 billion funding deal for Catholic and Independent schools.10 The main component was an additional $3.2 billion over 10 years from 2020 to 2029 to implement a new direct income method of assessing parental capacity to contribute in private schools. This was later increased to $3.4 billion.11 In addition, $1.2 billion would be provided over the same period to support parent choice. A further $171 million was provided for 2019 for the transition to the direct income method of funding. The new funding package also extended the period for overfunded schools to transition to 80% of the SRS by two years from 2027 to 2029. The large bulk of the increase was to go to Catholic schools. However, there was enough there to buy peace with Independent school organisations that had been warring with Catholic authorities. Following the announcement, Morrison said: All I did yesterday was I stand up with Dan Tehan and announce that we’d been able to come to a resolution of an ongoing discussion with independent schools and the Catholic school sector to ensure parents would continue to have affordable choice in non-state school education.12 Morrison also made it clear that the Catholic system would remain free to distribute Commonwealth funding according to its