[Greens-Media] O'Farrell-Gillard education funding deal made more expensive by private school windfall

[John Kaye]

O'Farrell-Gillard education funding deal made more expensive by private
school windfall

Media release: 18 June 2013

Non-government schools in NSW are set to receive unjustified increases in
their public funding from the deal signed off between Premier Barry
O'Farrell and Prime Minister Julia Gillard, according to an analysis of the
publicly available data released by Greens NSW MP John Kaye.

('Gonski delivers windfall to private schools, say Greens,' Sydney Morning
Herald, 18 June 2013, page 2, http://j.mp/smh130618)

Dr Kaye said: "The additional funds for public education are essential.
Gonski offers a lifeline to public schools that have been ignored for
decades by both levels of government.

"However the deal signed by Premier Barry O'Farrell and Prime Minister
Julia Gillard delivered a hidden windfall to private schools.

"TAFE students are being forced to pay for more money for Sydney Grammar
school. Universities are being sacrificed to prop up the wealth of schools
like Ascham and Kings.

"Public and private schools have been guaranteed to receive their year 2013
state funding, indexed at 3 percent and their federal funding indexed at
4.7 percent. The very wealthiest private schools will received indexation
at a lower rate of 3 percent.

"This not only locks in the unfairness of years of state and federal
funding increases biased to the private sector.

"It also makes the implementation of the Gonski principles in NSW much more
expensive. The burden is to be dumped onto TAFE students who will pay
higher fees, university students and staff who will experience appalling
budget cuts and communities that rely on NSW public services.

"Our analysis shows that the public schools could receive their funding
increases without making universities and TAFE students pay. All it takes
would be abandon the promised windfall to private schools.

"Excessively generous indexation and a $3.4 billion gift to the state's 110
wealthiest non-government schools are needlessly inflating the budget
impacts of delivering a fair deal to public education.

"Ending these unjustified levels of private sector subsidies would allow
both governments to deliver Gonski funding outcomes to public schools,
without pushing up TAFE fees or cutting university funding and state public
services.

"Today's NSW budget will reveal a few more details but on the available
information, the excessively generous private school indexation is costing
$1.3 billion more than inflation. The very wealthiest NSW private schools
will see their funding grow to an extraordinary $3.4 billion over the next
six years.

"The indexation arrangements contain a hidden but massive gift for private
education. Because the Commonwealth provides about 80 percent of private
school funding but only 26 percent for public education, the higher rate of
Commonwealth base funding growth will deliver a $855 million windfall to
non-government schools.

"Without these extravagances, achieving Gonski for public schools would be
relatively easy without robbing other levels of education and public
services," Dr Kaye said.

Background

While attention has largely focused on the money to be given to schools to
raise their expenditure to the school resource standard (SRS), the real
windfall for the non-government sector is the indexation of existing
funding.

Each school will receive funding from the state and Commonwealth
governments as two notional amounts:

Indexation: Their base funding which is their current amount will be
increased (indexed) each year by 3% on state funding and 4.7% on
Commonwealth funding, except for those schools that can spend above their
SRS. These will receive 3% indexation.

Additionality: Schools that are currently unable to spend at or above the
SRS amount (plus loadings) will receive additional amounts to boost their
spending to be closer to SRS.

Based on the available data, analysed by the Greens, NSW non-government
schools will receive the following amounts over the six years from 2014 to
2019 as increases in their funding above 2013 levels:

Indexation: $3.4 billion ($650 million from NSW government plus $2,790
million from the Commonwealth)

Additionality: $840 million ($290 million state and $540 million
Commonwealth).

The state's 110 wealthiest private schools will receive $341 million in
indexation.

The O'Farrell government has indicated that it will pay for its portion of
the total costs by increasing TAFE fees and public sector efficiency
dividends.

The Greens analysis shows that a range of fairer revenue measures could pay
for Gonski-lite funding for public education, without increasing TAFE fees
or other damaging imposts on public services.

By cutting all of the funding to the 110 wealthiest private schools ($3.4
billion) and indexing private schools at 2.5% (current and expected
inflation level - saving $1.3 billion), the total cost of private school
funding would be reduced by $4.77 billion over the next six years. That is
very close to the $4.92 billion cost of Gonski-lite funding for public
schools.

The effective rate of indexation for public schools is about 3.2%. This is
because the overwhelming majority of public school funding (about 82%)
comes from the state, which will only be indexed at 3%. Only the remaining
18% which comes from the Commonwealth is indexed at 4.7%. Thus the majority
of public school funding only grows at the relatively low 3%, with a small
amount growing at the higher rate.

In comparison, 74% of private schools funding comes from the Commonwealth
which is indexed at 4.7%.

If the Commonwealth indexation of private schools were held at the
effective public school rate of 3.2%, then the total six year indexation
would be $2,240 million, a saving of $855 million over the six year period.

For more information:   John Kaye 0407 195 455

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John Kaye
Greens NSW MP
phone: 0407 195 455
web: www.john.nsw.greens.org.au
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