The federal government's refusal to yield on schools funding has forced a partial retreat from the biggest state with NSW Premier Mike Baird proceeding with a new compromise deal which would spread out the final two years of Gonski funding over four years, saving Canberra $610 million in payments over the forward estimates, and more than twice that nationally.
Confidential internal working papers obtained by Fairfax Media ahead of next week's Council of Australian Governments meeting, reveal the elements of the NSW plan in which the Commonwealth liability would drop from $4.5 billion to $3.2 billion assuming the four-year option were applied nationally.
The proposed fiscal slow-down to make the money last twice as long, means the goal of achieving 95 per cent of the intended student resource standard (SRS) – the core tenet of the Gonski model – would not be achieved until 2021 rather than 2019.
"This proposal seeks to reintroduce the final two years of needs-based schools funding spread over four years," the document, which is marked "Sensitive: COAG discussion" states.
"This will result in NSW reaching 95 per cent of the SRS two years later than the NERA (national education reform agreement)."
The private compromise looks to be at odds with the public statements by NSW Education Minister Adrian Piccoli who as recently as Tuesday this week, used a televised interview to press Canberra to honour the full six-year funding commitment NSW had signed with the previous federal Labor government.
"We've signed a six-year deal with the Commonwealth, not with Labor, not with the Coalition, with the Commonwealth government and ... I continue to lobby the Commonwealth, the Coalition, to fund it and commit to that six years," Mr Piccoli told Lateline's Emma Alberici.
"We haven't really had a commitment from the Commonwealth. Labor's made its commitment. I'm still arguing and part of this interview is part of that lobbying effort, to really show them the benefits ... it's those individual impacts."
According to a well-placed source, the Baird proposal would result in an average cut per NSW school over the four-year forward estimates budget period of $198,116 with the Catholic school sector down by $117.2 million; other independent schools down by $66.6 million; and the public school sector down on the full Gonski formula by $426.1 million.
A spokesman for Mr Baird said: "We have made it very clear that the NSW government wants the full Gonski Agreement funded. Whilst various proposals have been discussed on how to achieve this – including payment over a longer period – it is ultimately the responsibility of the Commonwealth. We look forward to constructive discussions at COAG
Labor's commitment is to spend $4.5 billion to fund the final two years of Gonski, compared to the Coalition which wants to negotiate new funding arrangements to apply after 2018.
In public comments recently, Mr Baird has flagged the four-year spread of payments but this document reveals it is the state's official position in the face of federal intransigence, and what it would mean in terms of income foregone by schools.