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Teachers ‘ban’ Albanese’s public schools plan as decades of under funding cost economy billions

Jason Clare (L) says Labor plans to fully fund schools, but teachers say that's 'misleading'.

Jason Clare (L) says Labor plans to fully fund schools, but teachers say that's 'misleading'. Photo: AAP

Teachers are revolting against the Albanese government’s school funding plan as new analysis shows a decades-long failure to fully-fund public education is costing the economy billions.

The Australian Education Union on Wednesday declared a “ban” on enacting Education Minister Jason Clare’s new schools agreement, accusing governments of trying to sell students short.

The so-called Better and Fairer Schools deal is the cornerstone of an Albanese government’s election promise to fully-fund public education, but the union says those claims are misleading.

That criticism has been backed by new analysis from the Australia Institute’s Centre for Future Work, which warned that between $3.5 and $5 billion in economic returns are being “squandered” by the plan.

“We cannot stand by while another generation of students miss out on the resources that they need for their education,” AEU federal president Correna Haythorpe declared on Wednesday.

The Commonwealth will spend more than $29 billion on schools in 2024, but according to official departmental data more than half of that ($17.8 billion) will be spent subsidising private schools.

Stand-off over school funding

Nationwide backlash from teachers is just the latest headache for Clare, who is embroiled in a stand-off with New South Wales, Victoria, Queensland and South Australia over the funding deal.

Clare wants funding lifted to 100 per cent of School Resourcing Standards (SRS), which were devised by the 2011 Gonski report as an estimate of what schools need to meet student needs.

Gonski envisaged a 75 per cent (states) to 25 per cent (federal) funding split for education, but the federal government has previously only agreed to fund 20 per cent.

The new deal lifts the Commonwealth commitment to 22.5 per cent in exchange for a like-for-like 2.5 per cent rise (to 77.5 per cent) from states and territories.

But negotiations have hit an impasse, with the biggest states missing a key federal deadline late last month to sign on.

While Western Australia, Tasmania and the Northern Territory have agreed to the new agreement, education ministers in larger states hope they will get a better deal from Clare later this year.

That’s because the current funding arrangement – which leaves 98 per cent of Australia’s public schools underfunded – will expire on December 31.

But the federal government has warned the existing deal will simply roll over in states that don’t sign up to the new plan, locking in more under funding for most public schools.

Centre for Future Work director Jim Stanford said the federal government could close the current $6.6 billion funding gap at a much lower cost than the estimated $9.9 billion economic dividend flowing from better education.

“Gonski was crystal clear that the federal government has to play a bigger role,” Stanford said.

“Neither the states or federal governments have fully lived up to their responsibilities.”

Students fall behind as deal falls short

As governments remained deadlocked over school funding, OECD data last month showed that while Australia has the highest level of spending on private schools among developed nations, it is behind New Zealand, the UK and South Korea on public school funding.

In the meantime, high school completion rates have fallen post-COVID and standardised test results show Australian students are falling behind global peers in both maths and literacy.

“The Commonwealth has the best fiscal capacity to do something,” Stanford explained.

“They just declared a very large second [budget] surplus, and the amount of money required to go to the full 25 per cent is not that much.”

Clare has claimed that the Albanese government is keeping its promise to lift education standards by fully funding public schools in states and territories which have signed onto the new deal.

But claims the deal will fully fund public schools is misleading because while it outlines a lift to the SRS, it does not close what the AEU calls a “loophole” allowing states to reduce their bills.

Stanford explained that states are able to deduct up to four per cent of the SRS standard as depreciation on school buildings and related infrastructure, which cuts into money for students.

He said that when depreciation allowances are included in the analysis, states and territories account for 60 per cent of current school funding shortfalls, compared to 40 per cent federally.

In other words, even if states and the federal government agree to the proposed 77.5/22.5 per cent funding split, there will still be a shortfall of up to 4 percentage points for school funding.

The AEU estimates that the “accounting trick” will cost public schools $1062 a year per student by 2029, which is when the new Albanese government plan is due to be implemented in full.

“It certainly doesn’t help students when they have buildings deteriorating around them and their state governments hold up their hands and say, well, ‘I gave you some money for letting it deteriorate’,” Stanford said.

Topics: Education
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