NSW school funding cuts highlights state underspending on public schools

The announcement last week that the NSW government will cut spending on its own public schools by 1.25 per cent again highlights the failure of state governments to meet their share of the Gonski Student Resource Standard (SRS) as required by the Australian Education Act and subsequent agreements between the Commonwealth and the states and territories.

NSW like most, but not all states and territories, fails to meet its obligations concerning funding public schools while blaming the Commonwealth which has met its legislated agreements for both public and non-government schools.

Under the 2017 amended Australian Education Act the states were to increase their spending to meet 80 per cent of the SRS for public schools by 2023. The Commonwealth would increase its share to 20 per cent. 

Arguing the required increases were too onerous, NSW and other states had the SRS target reduced to 75 per cent. The states were also allowed to include in their funding items not previously counted as contributing to education. This has been estimated to have “saved” the states some $11 billion in funding over 2019-2023.

Despite this extension and reduced contribution requirements only three states in 2023 met the new reduced 75 per cent target – Western Australia, ACT and South Australia. Only the ACT achieved the full 80 per cent requirement.

NSW in 2023 was at 72.2 per cent of the SRS. The new Labor government agreed to    increase funding to get to 75 per cent by 2025 – two years earlier than previously planned. Tasmania will be there by 2027, Victoria by 2028 and Queensland, presently at just 69 per cent, not until 2032.

Now, the just announced 1.25 per cent cuts makes it difficult to see how or when NSW will reach 75 per cent of the SRS by 2025 as was agreed and promised.

All this means that NSW public schools, the largest school system in Australia, will not receive the funding that had been deemed necessary for all students to reach an acceptable education standard.

NSW’s sudden announcement of cuts highlights how state education expenditure is part of the budget process, can be changed at any time and is affected by short term political considerations. By contrast, Commonwealth school funding increases are legislated and must be implemented,

We should not forget that NSW and some of the other states reduced their school funding in real terms between 2013-17 thus negating the extra funding the Commonwealth government was providing as it introduced the new Gonski school funding model at that time. This was typical state cost shifting prevalent in our federal system under which as federal funding increases are accompanied by state funding cuts.

The other factor driving NSW cuts is declining enrolments of 25,000 since 2019 in public schools. This reflects a nation-wide trend. Across Australia between 2019 to 2023 public school enrolments increased by 0.7 per cent compared to 4.8 per cent for Catholic schools and 14.1 per cent for the independent sector.

At the same time increases in non-government school enrolment represents a cost saving for the states as the Commonwealth is a major public funder for that sector though at a lower level than states support for public schools.  

And to be clear, since 2014 Commonwealth funding for state public schools has been rising faster than state spending and at a faster rate than for the non-government sector.

So, with these cuts to NSW public schools who are the teacher unions going to blame now? Is it another protest bus to Canberra to ask for more federal funding for NSW to make up the slack? Or is it at last a vigil outside Premier Minns’ office demanding his government exercise its constitutional responsibilities, stick to its agreements and promises, and fund its own schools appropriately?

Only when the states are held to account for their underfunding of their own public schools are we going to have sensible discussion in this country about levels of school funding, and who should be held accountable for our declining education performance. 

Scott Prasser co-authored Evidence on Quality Schooling and worked for two federal education ministers.