5 Chapter 2 History of Australian Government funding of schools 2.1 The 2014-15 Budget was widely regarded as marking the end of the school funding reforms introduced by the Rudd/Gillard Governments in response to the Gonski Review recommendations. With the announcement of the funding arrangements in the 2014-15 Budget, Abbott Government funding arrangements for 1 schools changed for the third time since 2009. 2.2 In December 2011, the Gonski Review Report commented that: When considered holistically, the current funding arrangements for schooling are unnecessarily complex, lack coherence and transparency, and involve a duplication of funding effort in some areas. There is an imbalance between the funding responsibilities of the Australian Government and state and territory governments across the schooling sectors.2 2.3 The Gonski Review was initiated in April 2010 and the funding for schools prior to 2009 was a chief focus of the review's scrutiny. The review provided 'one of the most exhaustive reviews of schooling that we [Australia] have had for decades, going back to the mid-1970s'3; a means of assessing the effectiveness of the approach to Australian Government school funding which had been in place since the 1970s. 2.4 Outlining the history of school funding arrangements is essential as a guide through the complexity of the funding paid by states, territories and the Commonwealth. The difficulties of tracking the actual funding, especially under the recent changes to school funding policy, are examined in the following chapter. Funding prior to 2009 2.5 Prior to the States Grants (Science Laboratories and Technical Training) Act 1964 (States Grants Act), there was no direct Australian Government funding for schools in the states. Government assistance under the States Grants Act was gradually extended to include financial assistance for library facilities and then capital expenditure, at the same time extending the assistance to non-government schools.4 2.6 Commonwealth recurrent funding for schools began in 1970 with the States Grants (Independent Schools) Act 1969. In 1973 the Interim Committee for the Australian Schools Commission, chaired by Professor Peter Karmel, advocated a 1 Ms Marilyn Harrington, Parliamentary Library, Budget Review 2014-15, May 2014, p. [1], www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/r p/BudgetReview201415/School, (accessed on 9 June 2014). 2 Review of Funding for Schooling Final Report (Gonski Review Report), December 2011, p. xiv. 3 Mr Chris Bonnor, private capacity, Committee Hansard, 1 May 2014, p. 35. 4 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update March 2013, pp 2–3, http://parlinfo.aph.gov.au/parlInfo/download/library/prspub/366868/upload_binary/366868.pdf; fileType=application/pdf#search=%222010s%22, (accessed on 9 June 2014). 6 needs-based funding model to ensure that all schools could achieve similar standards. The implementation of the recommendations were a major turning point in school funding: As a result of the Karmel Committee's recommendations, Australian Government recurrent funding was extended to government schools in 1974. In the same year, special funding programs (targeted programs) were introduced, which provided additional funding for disadvantaged schools, special education, teacher professional development and innovation.5 2.7 The Schools Commission was established in 1974 to administer school funding and payments to states, including recurrent funding. Grants for targeted programs for government and non-government schools, were made triennially under the States Grants (Schools Assistance) Acts.6 2.8 Until 2008, this basic legislative and funding structure remained, notwithstanding changes in funding formulae and the abolition of the Schools Commission in 1988: From 1985 to 2008, most Australian Government funding for government and non-government schools was provided on a four-yearly basis under the one Commonwealth Act. Specific purpose payments (SPPs) continued with general recurrent grants (GRGs), which were allocated differently for government and non-government schools, capital grants for targeted programs. Over that period there were different resource standards that determined the amount of per student recurrent funding. From 1995, GRGs, (which constituted the majority of ongoing Australian Government funding for schools), were provided on a per student basis as a percentage of the resource standard known as Average Government School Recurrent Costs (AGSRC).7 Funding from 2009 to 2013 2.9 From 2009 until the commencement of the Australian Education Act 2013, most Commonwealth funding for school education was provided under the National Schools Specific Purpose Payment, which had two components—one for government schools and one for non-government schools. Other funding for school education was provided through National Partnerships and the Australian Government's own school 8 education programmes (known as Commonwealth Own-Purpose Expenses). 5 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update March 2013, p. 3. 6 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update March 2013, pp 3–4. 7 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update March 2013, p. 4. 8 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update March 2013, p. 4. 7 2.10 Figure 5 below provides an overview of Australian Government school funding arrangements utilised between 2009 and 2013. National Schools Specific Purpose Payment—government schools component 2.11 The National Schools Specific Purpose Payment (SPP) for government schools was provided through the Intergovernmental Agreement on Federal Financial Relations. The National Schools SPP was indexed each year, according to a formula based on increases in the Average Government School Recurrent Costs (AGSRC) primary and secondary amounts (converted to a weighted average) and growth in full-time equivalent enrolments.9 Table 5 below shows that the average growth rate of the AGSRC over 1999–2012 was 5.8 per cent. Over that period, combined primary and secondary school enrolments increased by 340 415 full time students, equivalent to a 0.8 per cent annual increase.10 National Education Agreement 2.12 The National Education Agreement between the Australian Government and State and Territory governments was formulated under the Intergovernmental Agreement on Federal Financial Relations. This Agreement sets out the agreed objectives and outcomes for schooling, the roles and responsibilities of each level of government, performance indicators and benchmarks, reporting mechanisms and 'policy and reform directions'. State and Territory government education authorities had discretion as to how to spend the National Schools SPP funding to achieve the agreed outcomes.11 National Schools Specific Purpose Payment—non-government schools component 2.13 Funding for the non-government schools component of the National Schools SPP was provided under the Schools Assistance Act 2008. 2.14 The National Schools SPP for non-government schools included targeted programmes such as the Literacy, Numeracy and Special Learning Needs Programme, the English as a Second Language—New Arrivals Programme, the Schools Languages Programme, and the Country Areas Programme. The Schools Assistance Act 2008 also provided for additional recurrent funding for indigenous students in non-government schools, non-government schools in remote areas and distance education students. 9 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update, March 2013, pp 4–5. 10 Enrolment data taken from Australian Bureau of Statistics, Publication 4221.0 – Schools Australia 2013, http://www.abs.gov.au/AUSSTATS/[email protected]/Latestproducts/4221.0Main%20Features42013?o pendocument&tabname=Summary&prodno=4221.0&issue=2013&num=&view, (accessed on 20 June 2014). 11 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update, March 2013, p. 5. 8 12 Figure 1—Australian Government school funding arrangements, 2009–2013 12 Ms Marilyn Harrington, Parliamentary Library, Australian Government Funding for Schools Explained: 2013 Update, March 2013, p. 6. 9 2.15 Payments to non-government school education authorities could not be made until an authority had signed an agreement with the Australian Government. The agreements prescribed the conditions with which an education authority must comply in order to receive funding. The conditions included educational and financial performance and accountability requirements.13 General recurrent funding for non-government schools—the Socioeconomic Status (SES) system 2.16 Australian Government general recurrent per student funding for non-government schools was based on a measure of need. Since 2001, the rate at which non-government schools receive general recurrent funding was determined by the estimated capacity of a school's community to support its school—that is, its SES. The SES Index included three dimensions—income, education and occupation. 2.17 A non-government school's SES score determines its per student general recurrent funding rate, as a percentage of AGSRC. In total, there were 46 SES funding scores, with funding rates