" The Commonwealth government has confirmed it will renege on its commitment to the final years of the Gonski agreement. This leaves Victorian students almost $1 billion worse off in 2018 and 2019 than was previously promised under Gonski. This disproportionately impacts our students who need it the most. This decision means that the Commonwealth cannot be counted on to pull its weight and share our ambitious agenda. In light of this, Victoria will need to rethink our approach to school funding."

James Merlino: Response to the Bracks Review into Government School Funding, September 2016

The passage of Gonski 2.0 poses a significant challenge for state and territory governments. It was formulated without consultation and places a significant financial burden upon the states who must now find the money to lift public schools much closer to the agreed resourcing standard. While the commonwealth has no constitutional authority over schools, federal funding of schools has been a feature of our educational landscape for the last four decades. As education funding has ramped up over the last 15 years, with most of the increase going to non government schools, the commonwealth has assumed the role of prime funder for non government schools. Under Gonski there was to be a pooling of funds and a pooling of effort to address need wherever it lay. There was also a discussion running through a 'reform of the federation' paper about the roles the commonwealth and states might play in terms of school policy and funding. That consultation was stopped short by the Abbott government and now the unilateral decision of the Turnbull government has sharply redefined federal-state relations and funding. Under Gonski 2.0 the commonwealth will fund 80% of the SRS in non government schools and just 20% of the SRS in public schools. The states will pick up the balance.

This is a particular problem for Victoria, which funds its public schools at a lower level than other states and territories and has enshrined in legislation a commitment to provide non government schools with 25% of the funding it gives to public schools. That 25% is not needs based and may not be sustainable in the light of the increased demand that is going to be placed on the state as a result of the commonwealth's Gonski 2.0 plan. There seems to be some sort of mechanism to require states to pay their share and if that is the case Minister Merlino has an awkward time on his hands. If, as the quote above suggests, he will rethink education funding then it may come down to a choice between denying public schools the funding the commonwealth is keeping from them or retaining the 25% and as a consequence overfunding non government schools. In a year when a new EBA has been negotiated that might not be an easy sell to treasury or the minister's colleagues.

The other slight area of concern for the minister will be maintaining the state's commitment to increased equity funding for schools which is over and above the SRS funding. Would this be under threat if the state has to find additional schools funding from somewhere to meet the commonwealth's demands?

Minister Birmingham's claim is that "The funding wars should now be over." That's doubtful but once the dust settles federal Labor will have to decide what course of action it will take if and when it assumes government. It'd be impossible for them to return to the original Gonski deals and funding arrangements. More likely they'd look at altering the 80/20 arrangement, possibly by seeking to meet more than 20% of the need in public schools. Whether they maintain their interest in the needs of Catholic schools will be an interesting question - they might do so for political reasons but probably not on the basis of logic or need. Once established the independent resourcing body would surely be providing advice to government about such matters.

 So the question for the Victorian education minister is what does this 'rethinking' of school funding look like?