View from The Hill

Battle over schools money heats up

Barry O'Farrell is the only premier to sign on for Gonski so far. AAP/Paul Miller

Barry O'Farrell must be Tony Abbott’s least favourite Liberal just now.

O'Farrell has not just lived up to that old cliché “don’t stand between a premier and a bucket of money” by doing a deal with Julia Gillard for the Gonski schools funding but he is out there vehemently declaring the present system broken and arguing the need for change.

“I think any incoming government is doing to understand that the existing funding formula is broken. It’s unfair,” he said at the weekend.

That’s the opposite of the position of Abbott, who in his budget reply hardened his opposition to the Gonski model.

O'Farrell also played into Labor’s hands when he told Sky that all options in relation to the GST should be on the table – the base, the rate and the carve up between the states.

Abbott’s promise of a review of the tax system – with proposals for change put to the people at the election due in 2016 – inevitably opened the issue of the GST. But it is not helpful to have his own side contributing to a full-blooded debate about the GST in the run up to this election.

The opposition leader’s rejection of the Gonski funding, his plan to delay by two years the superannuation rise to 12%, and the GST spectre are giving Labor useful campaigning points. The PM and her ministers have jumped on them with gusto.

But, as the Liberals run advertisements on commercial TV to sell their positives, the impact of Labor attacks is diminished by what is now generally assumed to be the government’s terminal position.

Labor will be heartened by the post-budget Nielsen poll, which shows its two-party vote improving by 3 points since last month to 46%, and the Coalition falling by 3 points to 54%. Labor’s primary vote is up 3 points to 32%, while the Coalition is down 5 points to 44%. Gillard has risen as preferred PM, while Abbott has fallen - they are now level.

Despite its increase, Labor’s primary vote remains at a disastrous low.

In the battle over Gonski, the federal Liberals have been leaning on the conservative states not to sign. O'Farrell recounted how Abbott had gone to see him when the state cabinet was looking at the issue.

“He made clear his view that the system wasn’t broken, that the agreement shouldn’t be entered into”. But O'Farrell had told Abbott the NSW cabinet would decide whether the offer was in the state’s interests and whether it could be afforded.

While NSW defied Abbott’s wishes, the conservative states of Victoria and Queensland have been holding out against the government (as well as Western Australia, which was always a lost cause).

Gillard is happy to have a fight over Gonski, calling a news conference to tell voters to look up what they would lose under Abbott.

She said that if the present funding system introduced by the Howard government continued, federal school funding would go backwards by $16.2 billion over six years.

This was because of falling indexation and the opposition’s refusal to guarantee that the extra investment for schools in last week’s budget would be delivered.

If the national schools plan did not proceed, NSW government schools would lose an average of $1.7 million per school; non-government schools would on average lose $800,000.

For Victoria the figures are $1.9 million on average for a government school, and $1.7 million on average per non-government school. The Queensland figures are $2.4 million on average per government school and $2.5 million on average per non-government school.

Victoria and Queensland find themselves in awkward positions, caught between offers that look to benefit their states substantially and Abbott’s pressure to say no. If they refuse to sign on, their opponents will claim they have been just playing politics.

But while the schools issue is one Gillard should be able to turn to her advantage, she faces the danger of being marked down if she can’t clinch deals with the states. The fact she is seen as a lame duck PM means that such a failure would feed into the negative story about her; it also limits her ability to punch home her message.

The same goes for Labor’s scare campaign on the GST. It holds dangers for Abbott, but on the other hand voters may accept as quite reasonable his argument that the tax system needs looking at and that he would take proposed changes to the people before bringing them in.

A government that said before the 2010 election that it would not have a carbon tax and then introduced one is not in the best position to call into doubt the credibility of Abbott’s undertaking on tax.