The Turnbull government has an “unprecedented opportunity” to end Australia’s 50-year debate about how to fund its schools, according to the Grattan Institute.
The report, Circuit Breaker: A New Compact for School Funding, proposes a new deal for the needs-based funding system all main political parties say they want.
It says the model recommended by the 2011 Gonski review was widely supported but not delivered in practice. The trajectories in the 2013 Education Act are too slow, it says, because many under-funded schools will not be properly funded for decades, while other schools will still be over-funded at the end of the century.
The report says needs-based funding could be achieved without the spending increases required by the 2013 act. Reducing indexation rates to match wages growth would save $2.8bn over four years, it says.
Part of that money could then be reallocated to schools that needed it most, it says.
“With ongoing low inflation, school indexation rates are billions of dollars more generous than they need to be,” the report says.
“The new compact seizes this historic opportunity. It opens up large savings by reducing indexation rates to line up with wages growth. It would then reallocate these funds to achieve needs-based funding by 2023.”
The report also recommends broader reforms to improve teaching and learning.
The new compact should redirect a big part of the savings relative to the 2013 Act to create two new teaching roles, it says.
These two roles would be: Master Teachers, and Instructional Leaders.
“Master Teachers and Instructional Leaders will work in and across schools to drive improvements in teaching effectiveness in their subject areas,” the report says.
To achieve better need-based funding by 2023, the report recommends:
- Reducing indexation on school funding to be in line with education wages growth, and then re-allocating the savings to help every school reach at least 95% of its Schooling Resource Standard (SRS) target by 2023.
- Indexing the SRS target in line with education wages growth, currently 2.5%.
- Indexing annual funding at different rates so all schools are brought into line with their SRS target more quickly. That means: indexing funding for under-funded schools at 3.6% to help them catch up to their SRS target; indexing funding for moderately over-funded schools at 0% so that over time their funding falls to their SRS target; once schools are at or near their SRS target, indexation would then match education wages growth, currently 2.5%, to maintain purchasing power.
“School funding for 2018 and beyond is up for grabs,” the report says.
“The Commonwealth is negotiating with every state and territory government to agree on future resource allocations. A new model must be determined by early 2017.
Peter Goss, the Grattan Institute’s school education program director, said this proposal would provide the circuit breaker Australia desperately needed.
“It shows how we can reallocate funds to get all schools to their needs-based funding target by 2023, without spending any more money over the next four years than the Turnbull Government proposed in its 2016 Budget,” he said.
