On 2 May, the Turnbull government announced an extra $18.6 billion in recurrent schools funding on top of already record and growing funding for Australian schools over the next 10 calendar years. This will bring our total 10-year investment to a record $242.3 billion from 2018 to 2027.
The government is committed to ensuring that this additional school funding is allocated fairly between states, sectors and schools and is based on the needs of students. Quality Schools p ackage We will truly implement the Gonski needs-based approach, delivering the Schooling Resource Standard that provides a base amount plus six loadings for disadvantage.
We will move to a truly needs-based approach that means that the same student with the same need attracts the same amount of Commonwealth funding in each state, territory and school sector.
By 2027, all schools will be funded on the same basis by the Commonwealth and attract consistent shares of the Schooling Resource Standard. The share funded by the Commonwealth will increase across Australia bringing it to 20 per cent of the Schooling Resource Standard for the government sector and 80 per cent of the Schooling Resource Standard for each non-government-sector approved authority. This reflects our historic role as the minority public funder of the government sector and the primary funder of the non-government sector. To support our increased investment, we have established a Review to Achieve Educational Excellence in Australian Schools,which will be led by Mr David Gonski AC, to provide advice on how the extra Commonwealth funding should be invested to improve Australian schools' performance, and grow student achievement.
The review will contribute to the evidence base needed to ensure funding on the ground is used in ways that make a difference to student outcomes. The review will not rehash funding calculations and distribution, but focus on practical measures that work, from Australia and around the world, to improve results for Australia's children.
Current arrangements As the Australian Education Act 2013 currently stands, Commonwealth recurrent funding varies considerably depending on negotiated arrangements by the former Labor government with state and territory governments. This means students with the same need in the same sector are treated differently because of the state in which they live. The Australian Education Act 2013 commenced on 1 January 2014.
It is the principal legislation by which the Australian government provides financial assistance to approved authorities for government and non-government schools. If the current legislation continued without amendment, the transition to any form of more consistent needs-based funding is not guaranteed, not even within decades, or even within 150 years in some instances. Detail of the bill The amendments contained in this bill are necessary and important. This bill realigns our legislative framework to support a funding model that is fair, transparent and needs based. It ties funding to reforms that will improve student outcomes and provides strengthened accountability mechanisms.
By aligning our legislative framework with our national policy objectives, this bill provides a strong foundation for achieving our long-term vision for Australia's schools. An updated and streamlined legislative framework will also help guide a new national, collaborative approach to schools reforms, based on clear objectives and targets for performance. To this end, a number of changes are required to the act.
The bill is presented in a single schedule divided into three parts.
Part 1. Improvements to the calculation of Commonwealth funding for schools The amendments are intended to commence on 1 January 2018 in line with the school year. The bill delivers a robust, needs-based system addressing the unfairness in the current funding model by removing the special deals made by the former government that have resulted in students with the same need within the same sector being treated differently just because of the state in which they live. The amendments will enshrine a faster and fairer 10-year transition period to ensure that by 2027, all government schools and all non-government schools will be funded on the same basis by the Commonwealth and attract a consistent share of the Schooling Resource Standard. From 2017, the Commonwealth share of the Schooling Resource Standard will grow for government schools from an average of 17 per cent to 20 per cent in 2027 and for the non-government sector grow from an average of 77 per cent in 2017 to 80 per cent in 2027.
Only 353 non-government schools are estimated to be over the entitlement of 80 per cent of the Schooling Resource Standard in 2017. However, most of these will still experience positive growth in funding, just at a slower rate than indexation. Less than one per cent of schools will have negative growth over the next four years and the transition adjustment fund will provide support to assist vulnerable schools.
The bill updates the per-student base funding amounts for 2018 with more recent data. An indexation rate of 3.56 per cent will be set in regulation for the first three years to honour our 2016 budget commitment and give education authorities certainty. From 2021, indexation of the Schooling Resource Standard will be based on whichever is the higher of three per cent or a floating indexation rate based on economy-wide measures to provide a minimum base and certainty for schools while ensuring that funding reflects real changes in wages and inflation costs.
As the Commonwealth will be increasing its share of the standard over the next 10 years, overall funding will grow over and above enrolment growth and indexation. This means that the Commonwealth will be providing $4.4 billion more over 2018 to 2021 than if funding just grew in line with movements in CPI.
2. Key policy amendments relating to reform and accountability The bill also introduces a requirement for states and territories to maintain their real per student funding levels as a condition of Commonwealth funding. This will prevent cost-shifting to the Commonwealth. The Commonwealth does not own or operate a single school, so it should not be the case that state and territory contributions to school funding decline while Commonwealth funding grows. In addition to changes to the school funding model, the Commonwealth is seeking to strengthen the link between Commonwealth financial assistance and the implementation of evidence-based reforms to improve student outcomes. We have been clear that the delivery of reforms will be a condition of funding for states.
The bill stipulates that states and territories will be required to be party to a new national agreement to receive Commonwealth funding. This is to avoid a situation like we have now with this notion of 'participating' and 'non-participating' states with differences in entitlements and expectations for achieving national goals. A new agreement will set out a shared vision for the development and learning of young Australians and reinforce the importance of progressing evidence-based reforms that improve student outcomes. The Commonwealth will work cooperatively with state and territory governments to set out a relevant and ambitious long-term vision for our schools.
3. Miscellaneous and technical amendments There are also a number of consequential and technical changes required to the act. These changes will reduce the level of Commonwealth control over the way schools are operated and the way funding is used by education authorities with the removal of requirements for implementation and school improvement plans. Implementing and administering the act since 2014 has also shown some aspects to be ambiguous, unnecessary or otherwise administratively cumbersome, so minor amendments are being made to address this.
Regulation Changes Amendments will also be required to the Australian Education Regulation 2013to give effect to the new funding and reform arrangements. We will be providing a summary of our proposed approach to these changes to stakeholders as part of our consultations on the implementation of the Quality Schools package and to assist with the consideration of this amendment bill.
The amendments to the regulation will cover how the new students with disability loading should be implemented to support students with the highest needs and proposed eligibility criteria for our transition adjustment fund. We will also consult on the best way to deal with some unintended consequences in current arrangements, for instance the treatment of year 7 students in South Australian schools, where because the government sector classifies year 7 students as primary school students, students who are in year 7 at non-government secondary schools are still being funded as primary school students. We will fix this and a range of other issues through our regulatory amendments once this bill is passed.
Closing This bill supports all Australian schools by taking action to strengthen the legislative framework that underpins the Australian government's significant investment in education and by updating the act to ensure effective and efficient administration. I commend this bill. Debate adjourned