Stealing from the poor

Public schools stand to miss out on billions in funding thanks to special clauses in the long-term deals struck between the commonwealth and the states.

Last year the commonwealth struck long-term education funding agreements with every state and territory except Victoria, locking in place the amount of money to be spent on public and private schools.

But a new analysis of the agreements claims a special clause could cost government schools as much as $19bn between 2018 and 2027 by allowing states and territories to include funding for things like building maintenance in their overall contribution to the public sector.

In 2017 the former education minister, Simon Birmingham, passed his Gonski 2.0 reforms, which required states to lift their overall funding to public schools to at least 75% of what’s known as the School Resourcing Standard by 2023.

The SRS is the Gonski review’s needs-based formula for measuring how much government funding each school is entitled to.

When the SRS was first developed it explicitly excluded items such as the cost of capital, depreciation, transport costs and umbrella services, such as each state’s board of studies.

But in September Guardian Australia revealedthat state and territory governments were planning to use the commonwealth’s deal with the private and independent school sectors to push back against the way its funding commitments for public schools were calculated.

And the long-term bilateral agreements struck between the commonwealth and every state and territory except Victoria late last year show the original definition of the SRS has been railroaded to allow states and territories to include “extra expenditure items” as up to 4% of their total SRS.

It means that every state and territory bar the ACT is able to partially count expenditure explicitly excluded from the original definition of the School Resourcing Standard as part of their overall education budget.

Each state’s agreement is different, meaning they’re able to claim different expenditure as part of the deal.

In New South Wales, for example, the state’s education standards authority and capital depreciation costs are able to be partially taken into account in its SRS calculation.

Rob Stokes, the state’s education minister, said it “does not impact on the $6.4bn in additional funding for NSW government schools”.

“Unlike some states, NSW will only include expenditure that directly relates to public education in this 4%, including NESA (the proportion that serves public schools) and capital depreciation,” he said. “This funding is real additional money and will be delivered in full.”

In Western Australia, direct school transport, capital depreciation, kindergarten expenditure and all regulatory funding associated with the state’s school curriculum authority can be included in the 4% SRS allowance.

The Australian Capital Territory is the only state or territory which does not include the 4% exemption in its bilateral agreement with the commonwealth.

According to a new analysis by Cobbold, the “additional” expenditure items could cost public schools $19bn in the decade after the agreement if the states and territories claim the full 4% exemption.

And the same expenditure cannot be used to count against the state’s contribution to private schools.

“Only public schools are being defrauded by this sleight of hand in the bilateral agreements,” Cobbold writes in his analysis.

“The allowance for state governments to substitute other expenditures for actual increases in recurrent funding as defined for the SRS does not apply to private schools. Yet, private schools benefit from capital funding by state governments, school transport funding and regulatory and standards authorities funded by the states.”

Published on Thursday, Cobbold’s analysis shows public schools could be short-changed to the tune of $60bn over the decade to 2027.

Cobbold estimates that if the deals remain in place until 2027, it could mean a “cumulative” loss of $41bn for the public sector.

“Public schools are being defrauded by school funding agreements finalised at the end of last year between the commonwealth and the state and territory governments,” Cobbold writes in the paper.

“Public schools in all states except the ACT will only ever be funded at 95% of their School Resourcing Standard at best, and likely less.

“In contrast, private schools in all states except the Northern Territory are guaranteed funding at 100% or more of their SRS by 2023.

“The agreements are heavily biased against public schools and in favour of private schools.”