The Morrison government has rejected Victoria’s offer of a one-year school funding deal as independent schools prepare for the possibility of no federal funding next month.
As the standoff over school funding continues, Independent Schools Victoria has advised some of its members to speak to their bank about taking out extra loans to meet the potential shortfall.
The current school funding agreement expires on December 31 and Victoria is refusing to sign the five-year Gonski 2.0 deal put forward by the Morrison.
Victorian Education Minister James Merlino met with his federal counterpart Dan Tehan in Melbourne on Tuesday but the pair failed to resolve the impasse over school funding, setting the scene for a fiery Education Council meeting on Friday.
Mr Merlino said Victoria wouldn’t be bullied into signing a "dud" multi-year deal which “unfairly funds public school students
"Scott Morrison has already recklessly rejected this proposal. This proves he is willing to hold kids to ransom to force through his unfair education deal," Mr Merlino said.
“If Scott Morrison decides to withhold funding, then the responsibility for any impacts on schools rests solely and utterly with him."
Mr Tehan said Victoria was the only state that had no signed up to his deal for record school funding.
"Victoria is asking for a special deal that puts in jeopardy everything we have negotiated in good faith with every other state and territory," Mr Tehan told The Age.
"Rather than continuing to leak to the media my hope is that Daniel Andrews will come to his senses and reach an agreement that provides schools in his state with record funding and guarantees important reforms to lift outcomes."
Victorian independent and Catholic schools are concerned funding could stop flowing to them next year unless a new deal is struck this month.
While state schools receive the bulk of their public funding from the state government, independent and Catholic schools receive the bulk of their public funding from the federal government.
Independent Schools Victoria chief executive Michelle Green has written to Victorian Premier Daniel Andrews urging him to resolve the uncertainty, saying the situation was creating "growing and well-founded anxiety" among schools.
"Some schools, with insufficient cashflow to meet their January expenses without this payment, might now need to speak to a financial institution about creating or extending an overdraft and/or bridging finance," she said.
She said if an immediate resolution wasn't reached, the Andrews government should provide 100 per cent of their 2019 grant payments to independent schools in January, instead of the 25 per cent they were due to receive.
"This would go some way towards easing the immediate pressure many will face," she explained.
Mr Merlino will write to the independent and Catholic sectors to inform them there's nothing stopping them from receiving federal funding, regardless of whether an agreement is in place.
But the Morrison government has received legal advice that contradicts this. Its advice states that federal payments to Victorian schools can’t continue unless an agreement is in place.
The Labor party is already considering how it might campaign on the funding debacle in marginal seats in the lead-up to the federal election.
If the federal government withholds money from Victorian schools, the ALP will roll out ads highlighting the issue.