According to media reports, state governments are up in arms about ‘cuts’ in funding to hospitals and schools. One of the most frequently repeated assertions about the federal budget is that it creates an $80 billion shortfall in health and education funding over the next 10 years. According to the budget papers themselves, however, federal funding for schools is set to increase substantially in the next four years. The alleged funding ‘cuts’ beyond that period are simply the gap between fantasy and reality.
The first problem with the claims of funding shortfalls over 10 years is that the budget covers only four years of forward estimates; the current budget commits funding for schools until the 2017-18 financial year.
Any talk of funding for schools beyond 2017-18 is speculation and needs to be considered in the context of three facts: nobody can be entirely sure how economic circumstances might change between now and then; the schools funding agreement between the federal and state governments is due to be renegotiated by 2017; and there will be at least one federal election in that period. Even the statement in the budget that school funding will be indexed to CPI from 2018 has to be viewed in this context.
What about the four years outlined in the budget? Are there cuts to school funding?
In a word, no. Analysis of the figures by The Centre for Independent Studies shows that, overall, the federal budget for schools is set to grow by 15 per cent in real terms in the next four years – three times higher than the expected rate of growth in student numbers. This not the whole story, though. The overall budget includes a number of fixed-term programs that expire in this period. The major component (97 per cent) is recurrent and capital grants to schools (called ‘Students First’ funding), and they will increase substantially in the next four years.
These are the figures (all are in real terms, that is, adjusted for inflation):
These funding increases reflect the government’s commitment to deliver the first four years of the Labor government’s Better Schools package (also known as the Gonski funding model). The Better Schools package was a six year funding deal, in which the bulk of additional funding was to be provided in the last two years. The last (and most expensive) two years of the funding deal never appeared in any budget papers and the Labor government never explained how they intended to fund them. Likewise, the current Coalition government never committed to delivering the final two years of the deal. In fact, they expressly ruled it out well before their budget was revealed.
This means that the so-called ‘cuts’ or ‘savings’ in the federal budget for schools are cuts and savings to budgets that never actually existed. Schools will not be getting less money than they have now, they will just be getting less than they were led to believe they might.
It is difficult to know who to blame for the confused and sometimes plain wrong messages about school funding in the wake of the federal budget. The Abbott Government seems to have made no effort to dispel claims that school funding has been cut. Perhaps this was to help perpetuate the ‘tough budget‘ for tough times perception.
For their part, state and territory premiers and ministers have also been banging the funding cuts drum, supposedly shocked and dismayed that the budget did not contain funding they were told months ago, in no uncertain terms, would not be forthcoming.
The Queensland premier seems to have conveniently forgotten that his government didn’t even sign up for the funding deal; the additional funding was extended to them by the Federal Government in an act of post-election largesse. Media reports have played into this political game as well. A cursory look at the budget papers would have shown journalists that the rhetoric of cuts does not fit with figures that clearly show growth in school funding, at least in the foreseeable future.
There is a lot to be critical of in this budget, both in the schools area and the budget more broadly. One thing it cannot be legitimately criticised for, though, is ‘cuts’ to schools funding.
Dr Jennifer Buckingham is a research fellow at The Centre for Independent Studies.
Home > Commentary > Opinion > Education funding hasn’t been cut – fantasy has
Education funding hasn’t been cut – fantasy has
According to media reports, state governments are up in arms about ‘cuts’ in funding to hospitals and schools. One of the most frequently repeated assertions about the federal budget is that it creates an $80 billion shortfall in health and education funding over the next 10 years. According to the budget papers themselves, however, federal funding for schools is set to increase substantially in the next four years. The alleged funding ‘cuts’ beyond that period are simply the gap between fantasy and reality.
The first problem with the claims of funding shortfalls over 10 years is that the budget covers only four years of forward estimates; the current budget commits funding for schools until the 2017-18 financial year.
Any talk of funding for schools beyond 2017-18 is speculation and needs to be considered in the context of three facts: nobody can be entirely sure how economic circumstances might change between now and then; the schools funding agreement between the federal and state governments is due to be renegotiated by 2017; and there will be at least one federal election in that period. Even the statement in the budget that school funding will be indexed to CPI from 2018 has to be viewed in this context.
What about the four years outlined in the budget? Are there cuts to school funding?
In a word, no. Analysis of the figures by The Centre for Independent Studies shows that, overall, the federal budget for schools is set to grow by 15 per cent in real terms in the next four years – three times higher than the expected rate of growth in student numbers. This not the whole story, though. The overall budget includes a number of fixed-term programs that expire in this period. The major component (97 per cent) is recurrent and capital grants to schools (called ‘Students First’ funding), and they will increase substantially in the next four years.
These are the figures (all are in real terms, that is, adjusted for inflation):
These funding increases reflect the government’s commitment to deliver the first four years of the Labor government’s Better Schools package (also known as the Gonski funding model). The Better Schools package was a six year funding deal, in which the bulk of additional funding was to be provided in the last two years. The last (and most expensive) two years of the funding deal never appeared in any budget papers and the Labor government never explained how they intended to fund them. Likewise, the current Coalition government never committed to delivering the final two years of the deal. In fact, they expressly ruled it out well before their budget was revealed.
This means that the so-called ‘cuts’ or ‘savings’ in the federal budget for schools are cuts and savings to budgets that never actually existed. Schools will not be getting less money than they have now, they will just be getting less than they were led to believe they might.
It is difficult to know who to blame for the confused and sometimes plain wrong messages about school funding in the wake of the federal budget. The Abbott Government seems to have made no effort to dispel claims that school funding has been cut. Perhaps this was to help perpetuate the ‘tough budget‘ for tough times perception.
For their part, state and territory premiers and ministers have also been banging the funding cuts drum, supposedly shocked and dismayed that the budget did not contain funding they were told months ago, in no uncertain terms, would not be forthcoming.
The Queensland premier seems to have conveniently forgotten that his government didn’t even sign up for the funding deal; the additional funding was extended to them by the Federal Government in an act of post-election largesse. Media reports have played into this political game as well. A cursory look at the budget papers would have shown journalists that the rhetoric of cuts does not fit with figures that clearly show growth in school funding, at least in the foreseeable future.
There is a lot to be critical of in this budget, both in the schools area and the budget more broadly. One thing it cannot be legitimately criticised for, though, is ‘cuts’ to schools funding.
Dr Jennifer Buckingham is a research fellow at The Centre for Independent Studies.
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