The policy and politics of education cuts

State governments are looking at changing the way they deliver education. AAP Image/Mick Tsikas

At a time when the Commonwealth sponsored Gonski Review of School Funding is recommending an increase of $5 billion a year plus for schools around Australia, it may seem odd that some state governments are announcing education spending cuts.

The NSW government announced $1.7 billion in cuts that would include $200 million to public schools and $67 million to the non-government school sector for recurrent funding. Some 1,800 education department in head and regional offices will lose their jobs over several years, although the government has promised no teachers will lose their jobs.

In Victoria some 950 jobs are expected to go in the education department and resistance to further reductions to class sizes. The TAFE sector is also undergoing funding cuts and being opened to increased private service provider competition.

In Queensland, the just elected Newman government has this week brought down its budget. Redundancies mainly at head office, are about 400, but overall the budget has flatlined rather than been cut. For the Independent school sector, capital grants have been maintained with a minimal increase of 0.4%. In real dollar terms, given the rate of education costs growth, this amounts to a cut.

All of these non-Labor states are looking for not just balanced budgets and smaller governments, but for a different type of public service that is less involved in direct service delivery.

Why cut?

Behind these cuts, lies the resurgence of the idea of the “contract” state – of more outsourcing, more purchaser-provider splits in the buying and delivery of policies.

These are ideas that have long been part of public service reform since the early 1990s. They have never been out of fashion, just been given an extra boost by the precarious state budget positions that each of these governments of NSW, Victoria and Queensland have inherited from their Labor predecessors.

Significantly, each of these three non-Labor states have appointed external, “independent” audit commissions to advise on their respective financial positions and to suggest areas for cuts. Ironically the NSW commission was chaired by the same David Gonski who headed the Review of School Funding which recommended a substantial funding increase.

Evidence-based policy

There are several aspects about these state cuts in education spending. First, contrary to media portrayal and popular opinion, it is the states who provide most of the funds to schools. In 2009-10 the states spent nearly $32 billion (76%) on schools compared to the Commonwealth’s $10 billion (24%). Most state funding goes to public schools with about $2.3 billion going to the non-government sector - 27% of total government funding to this sector. State schools represent about 64% of the school population.

By contrast, most Commonwealth school funding, some $6.5 billion goes to the non-government sector which represents 73% of all government funds to this sector. The Commonwealth only provides $3.5 billion to public schools – 11% of their total funding.

So the important issue is that if states start cutting funding to schools it is going to have a major impact given their dominant funding role. Moreover, cuts in state funding would, initially appear to have a greater impact on public schools given the dominance of state spending for this sector.

Second, there has been considerable debate about the Commonwealth established Gonski Review of School Funding that reported to the Gillard Government in February. The concerns have been whether this proposed increased is desirable or needed, who is going to fund it and its impact on the non-government school sector.

As with the Commonwealth’s National Disability Insurance Scheme, the Gillard government wants the states, to make major contributions to its proposed increased funding in this area. The states are to provide some of the extra Gonski proposed extra $5 billion in education funding.

Given the states already spend heavily in this area, their constitutional responsibilities, the need to subordinate their spending priorities to those of the Commonwealth and their limited tax base, state resistance has been strong and not unexpected.

Political will

Amid all this is the debate about how the Australian education system is performing. However, sadly, most of this discussion is about disadvantage rather than quality. The weak correlation between extra funding and improvements in education outcomes are too often ignored. There are other more important, but harder policy things to do.

The Gillard government never gets it. Policy development is as much about negotiating what is possible as it is about demanding what is wanted.

The Gillard government’s desire to tick the political box about its achievements has meant that the Gonski Review has not been properly analysed and the current policy debate in this area has been hijacked by vested interests, whose arguments reflect ancient prejudices rather than genuine discussion based on up to date evidence.

As for the states and their cuts – the issue is how they are to be managed and whether the States have the fortitude and the awareness to make the more long term fundamental changes to how the education system actually works. But, that as they say, is another story.