Australia’s public schools will miss out on $13bn in the next five years if accounting tricks are maintained in upcoming funding agreements, a major report has found.
The National School Resourcing Board’s annual review, tabled in parliament last week, showed government schools lost more than $2bn in 2022 because of a Morrison-era loophole that allows states and territories to claim up to 4% of public school funding on non-school expenditures.
The federal education minister, Jason Clare, has indicated the 4% will not be reviewed until the next round of funding agreements – scheduled for 2030.
Modelling provided to Guardian Australia by the Save our Schools convener, Trevor Cobbold, suggests that if Clare’s position remains, public schools will miss out on about $13bn in funding to the end of the decade.
Under the agreement, all jurisdictions except the Australian Capital Territory can claim expenditures specifically excluded from how the Schooling Resource Standard is measured, including school transport, capital depreciation, childcare and ongoing funding to regulatory bodies.
The report found $2.2bn was claimed by states on non-school spending in 2022 that would otherwise have been used on meeting the need of public schools.
The biggest loss was in New South Wales ($613m) followed by Victoria and Queensland – ($564m and $534m respectively).
New in-principle agreements reached to “fully” fund public schools in Western Australia and Northern Territory have retained the 4%, causing backlash from the Australian Education Union and the Greens.
The former shadow education minister Tanya Plibersek had promised Labor would end the “accounting tricks” if elected.
Cobbold said the report was “official confirmation” funding agreements were “heavily biased” against public schools.
“The new in-principle agreements show the Albanese government is prepared to … play a greater role in the funding of public schools,” he said.
“However, this cannot be achieved while accounting tricks are retained in the agreements.”
All states excluding the ACT funded public schools below 80% of the SRS in 2022, the report showed, to a shortfall of about $5.3bn. At the same time, states over-funded private schools by $480m.
The Northern Territory fell exceedingly short – contributing just 56.5% of required funding to its public schools – making it non-compliant for the third year in a row.
The board pointed to mitigating factors, including acute teacher shortages, but expressed concern the territory “may not have the appropriate infrastructure and adequate system oversight” to achieve full funding within “desired timeframes”.
The Australian Education Union federal president, Correna Haythorpe, said the situation in the NT was “shameful”. “There is effectively no funding for one in four public school students now.”
But she pointed to other jurisdictions that appeared to be downplaying their ability to provide greater funding to schools, despite pushing to maintain the 4% clause.
The report showed WA and NSW were already funding public schools at 78% in 2022, which is significantly higher than was required under their agreements with the federal government.
Despite this, the NSW government, as well as Victoria, South Australia, Queensland, have argued they need the commonwealth to increase its contribution to public school – from 20% to 25%.
The NSW education minister, Prue Car, told parliament in November governments were facing “unprecedented pressure”. “Our government has committed to reach 75% of the SRS by 2025 – that’s two years earlier than the previous government’s target,” she said at the time.
But Haythorpe noted that NSW surpassed that 75% target in 2022. She said this meant WA and NSW didn’t need to “rely on loopholes” to reach 100% of the SRS.
A spokesperson for the WA government said all jurisdictions bilateral agreements allowed them to include the 4% of the SRS, which included delivering kindergarten in school settings in WA and “direct transport costs” to and from school.
Car was approached for comment.
