School funding policy burst back onto the national agenda last Tuesday. Federal Education Minister Jason Clare announced a ‘statement of intent’ had been signed with Western Australia to fully fund the state’s public schools by 2026.

This language is important. A statement of intent is not  a signed, five-year, bilateral funding agreement. There is still much water to go under the bridge.

Yet, on face value, the announcement is good news. It signals the federal government’s intention to boost overall funding for public schools in WA by an extra $777.4 million over five years. In doing so, lifting its share of public school funding from 20 percent to 22.5 percent. Importantly, priority is also given to the state’s most disadvantaged public schools to ensure they are the first to receive the new funding.

As part of the deal, the WA government committed to providing at least an equivalent amount over this period, or 77.5% of the SRS, bringing total additional investment in public schools to $1.6 billion.

In theory at least, this will bring all WA schools regardless of sector up to 100% of the Student Resource Standard by 2026, in school funding policy terms, a quick turnaround.

So why was WA the first cab off the rank?

A review of the annual reporting of states and territories concerning their bilateral funding agreements shows that in 2018, WA actually funded schools at 104% of the SRS, with the WA state government providing 84.43% of the SRS in addition to the federal government’s 20% contribution. From 2019, each year, WA has incrementally dropped its funding to the plateau in 2021, 2022 and 2023 of 75%.

In short, for the federal government to achieve a much needed political and public victory concerning school funding, WA was low hanging fruit. It was sitting on 95% of the SRS in 2023, and only years before schools had been funded in excess of 100%.

WA is also in strong budgetary position vis a vis the other states and territories with a $3.7 billion net operating budget surplus now forecast for 2023‑24.

Perhaps in a sign of things to come, included in the signed statement of intent was a no-disadvantage clause. This means the WA will net hundreds of millions more for education if the Eastern states secure a higher share.

Judging from the initial reaction from some eastern seaboard states, who rejected outright the federal government’s 2.5% increase in funding, Minster Clare faces a rocky negotiation path ahead.

Don’t get too excited

There’s a lot we don’t know. And a lot to worry about if history repeats itself. Our school funding history in relation to equity and needs-based funding is not reassuring.

Minister Clare obviously hopes that the WA agreement will set the scene for other state and territory agreements. He wants all parties to negotiate in good faith and with noble purpose.

But the much-travelled path of federal/state school funding negotiations is littered with disagreements —protracted and fierce. Their results have seldom been fair let alone noble. 

At this stage Victoria and Queensland are not agreeing to 22.5. In equally good faith they are pushing for 25% funding from the federal government.

The Australian Education Union concurs. Its Every school. Every child campaign has long made this clear. It also asks for 40% for the NT where public schools are in dire straits.

Funding war?

Some observers are foreshadowing another ‘funding war’. The exact strategies and tactics of the combatants remain to be seen. Or not. Wider publics are seldom privy to manoeuvres behind-the-scenes. 

The usual funding wars also involve the private schools. Independents, Catholics, the federal government and the states/territories all go into battle for self-interest.

These current negotiations are focused on  the needs-based funding of public schools. Yet Private schools may still enter the funding fray. They always have. 

Currently, for all schools, the SRS is topped up with ‘equity loadings’. We don’t yet know how these will be built into these new funding arrangements. 

There is also the 4% depreciation and other costs loophole that allows the states and territories to reduce their funding in real times. Without its removal, WA Public schools will receive 96% of the SRS rather than the suggested 100%. 

Will disadvantaged schools, with time poor teachers, be given additional support to claim such loadings.  

This federal money is to be tied to various ‘practical reforms’. The Improving Outcomes for All review is the touchstone. These reforms will, in the Minister’s words, ‘help children to keep up, catch up and finish school’.  

But we don’t yet know how these reforms will be rolled out. We don’t know how they will be devised and evaluated, or the assessment and accountability mechanisms involved. 

It is not clear if the Commonwealth has any claw back mechanisms if the states/territories don’t measure up.

Commonwealth accountability mechanisms are notoriously complex, obscure and unhelpful. Danger lurks here.  

Matters to keep in mind

These recent WA developments are an important starting point for the National School Reform Agreement (NSRA) and the new bilateral funding agreements to be negotiated this year.

But, while the haggling over the percentage of government contributions toward the SRS continues, we urge all parties to keep in mind that the SRS represents the minimum standard of funding needed to meet the educational needs of students. 

The WA negotiations have also signalled the federal government’s capacity to move beyond the arbitrarily imposed 80/20% funding split that has shaped federal funding reform since 2017.

This is an important development. It demonstrates there is no constitutional or legislative reason why it can’t move beyond the 22.5% it agreed to on Tuesday, toward the 25% sought by other states.  

We also suggest that substantially strengthened transparency measures be built into the new NSRA and bilateral funding agreements.

Invisibility of funding data

At present, publicly available and easily comprehensible information on how money is spent by governments, and then allocated by schooling sectors is limited. Gaps exist in the visibility of funding data. This is especially problematic given that SRS funding from the federal government is not directly sent to all schools, but redistributed in line with state and sector-based funding models.

These gaps are even more worrisome when considered in relation to the additional government money allocated to priority equity groups (Aboriginal and Torres Strait Islander students, students with disability, students with socio-educational disadvantage, students with low English proficiency, small schools and schools in regional and remote locations).

On this, a 2023 Productivity Commission report established that there is ‘no publicly available data on school-level spending on students’ from these cohorts.

Bolster accountability

Enhanced transparency mechanisms would serve to curtail any potential ‘accounting loopholes’ or cost shifting that have historically beset funding agreements. They would also bolster accountability and enforceability in line with the needs-based principles of the SRS which should remain a central focus of any future funding reform.

There is much at stake for public schools and their students, teachers, and leaders around Australia in the coming months as the school funding negotiations ramp up.