Bills Digest no. 37 2014–15
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WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.
Marilyn Harrington
Social Policy Section
21 October 2014
Contents
Purpose of the Bill
Structure of the Bill
Background
Committee consideration
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Concluding comments
Date introduced: 25 September 2014
House: House of Representatives
Portfolio: Education
Commencement: The formal provisions will commence on Royal Assent. Schedule 1 will commence the day after Royal Assent. Schedule 2 will commence retrospectively from 1 January 2014.
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.
The purpose of the Australian Education Amendment Bill 2014 (the Bill) is to amend the Australian Education Act 2013 (the Act) to:
- insert a new clause in the Act that will authorise the Minister to determine financial assistance for ‘prescribed circumstances’ and provide for the establishment of school funding programs by regulation—this will enable funding for the Indigenous Boarding Schools (Additional Funding for Non-government Schools with Substantial Numbers of Remote or Very Remote Indigenous Boarding Students) initiative (Indigenous Boarding initiative)[1] and
- correct a number of drafting errors and omissions in the Act and the Australian Education (Consequential and Transitional Provisions) Act 2013, including ensuring that transitional funding arrangements for some independent special schools and special assistance schools are consistent with those for other schools.[2]
The Bill also proposes to amend the Australian Education (Consequential and Transitional Provisions) Act 2013 to defer the implementation of school improvement planning requirements.
The Bill has two Schedules:
- Schedule 1 contains provisions that will commence on the day after Royal Assent and
- Schedule 2 contains provisions that will commence retrospectively from 1 January 2014.
The new school funding system and education reform strategy
Following the report of the Review of Funding for Schooling (the Gonski Review) and in accord with the terms of the subsequent National Education Reform Agreement (the NERA) auspiced by the Council of Australian Governments (COAG), the Act provided for the introduction of a new system of Australian Government funding for schools and an accompanying education reform strategy for schools from 2014.
The NERA incorporated the Gonski Review’s core recommendation for a new needs-based Schooling Resource Standard (SRS) that would apply to all school students, irrespective of whether they attended a government or non-government school. The SRS, as recommended by the Gonski Review, consists of a per student SRS amount supplemented by loadings for various forms of disadvantage.
Central to both the Gonski Review’s recommendations and the NERA was the previous Labor Government’s commitment that no school would receive less funding under the new arrangements and that funding for all schools would increase in real terms.[3]
COAG, through the NERA, also agreed to an education reform strategy which includes, amongst other matters, annual school improvement plans.[4]
The Act and the Australian Education (Consequential and Transitional Provisions) Act 2013 also include transitional arrangements for the phasing in of the additional funding as a result of the school funding reforms and the new requirements of the education reform strategy.[5]
Most of the Bill’s provisions relate to drafting errors and omissions that impact on the intended operation of the new school funding system. Of these particular provisions, this Bills Digest discusses in detail the provision relating to independent special schools and special assistance schools. The reader is referred to the Explanatory Memorandum for an explanation of the other proposed amendments.
Funding for Indigenous students at non-government boarding schools
The 2014–15 Budget provided $6.8 million in 2014–15 to non-government schools for the Indigenous Boarding Schools (Additional Funding for Non-government Schools with Substantial Numbers of Remote or Very Remote Indigenous Boarding Students) initiative that will assist with ‘the additional costs associated with boarding and educating Indigenous students from remote communities’.[6] This assistance will be provided to non-government schools with more than 50 Indigenous boarding students from remote areas or where 50 per cent or more of their boarding students are Indigenous and from remote areas.[7]
The initiative is the result of a review that found there were significant additional costs, such as health care, associated with boarding and educating Indigenous students from remote areas. The review found that schools were using funding from other sources to meet these costs and there were concerns that that these expenses were threatening the viability of these boarding schools.[8]
Funding for other targeted programs to support the education objectives for Indigenous students is provided through the Indigenous Education (Targeted Assistance) Act 2000 (IETA).[9] IETA programs and other Indigenous education programs are administered by the Department of Prime Minister and Cabinet.[10] Rather than providing for the boarding schools initiative through the IETA, the initiative will be provided by a proposed new mechanism for establishing school programs under the Act. This mechanism is discussed in the ‘Key provisions’ section of this Bills Digest.
Funding for independent non-government special schools and special assistance schools
Non-government special schools cater for students with disability, and non-government special assistance schools mainly cater for students with social, emotional or behavioural difficulties. The Bill corrects drafting errors in relation to the transitional recurrent funding arrangements for some of these schools and consequently provides an additional $2.4 million to be paid to these schools in 2015.
Section 62 of the Act provides for the transitional recurrent funding arrangements for an independent school approved authority that is approved only in relation to one or more special schools or special assistance schools (that is, it has no mainstream schools under its authority) and where those schools are already funded at or above their full SRS amount (per student amounts plus loadings).[11] However, the funding formula in section 62 applies only for 2014; it does not provide ongoing transitional funding arrangements from 2015.
The funding formula in section 62 also omits indexation arrangements. Under the Act, all schools that are already funded at their full SRS amount or above maintain their current level of funding with a smaller indexation rate than the general 3.6 per cent indexation rate for the SRS. These maintenance arrangements will continue until the relevant schools’ SRS amounts catch up with their actual funding levels. The Australian Government’s indexation rate for these schools is 3.0 per cent.[12] This ensures that the previous government’s commitment is met—that is, no school would receive less funding under the new system of funding and that funding for all schools would increase in real terms.[13]
Items 31 to 34 of Schedule 2 correct these omissions. By doing so, the transitional funding arrangements for these schools will be consistent with those for other schools.
The additional $2.4 million is, in effect, for indexation for 2015. The Explanatory Memorandum advises that this expense will appear in the Mid-year Economic and Fiscal Outlook for 2014–15.[14] The indexation amounts for 2016 and 2017 have not been identified because, given the nature of the transitional funding arrangements, these amounts are not yet known.[15] Indexation arrangements from 2018 will change as a result of a 2014–15 budget measure.[16]
School improvement frameworks and school improvement plans
The Act is not only concerned with the school funding system. It also contains a Preamble which is a statement of aspirations for schooling and its Objects define the specific goals for schooling (section 3). The Act (paragraph 3(1)(d) and subsection 3(2)) also committed the Commonwealth to implementing a National Plan for School Improvement (NPSI), as set out in the NERA, to achieve these goals. The NPSI has now disappeared from government education parlance—the Coalition Government refers to its school education reform strategy under the banner of ‘Students First’.[17]
Section 77 of the Act sets out the ongoing policy requirements for approved authorities.[18] To assist with achieving the goals for schooling, these requirements include a school improvement framework and that each school ‘develops, implements, publishes and reviews a school improvement plan’ (paragraph 77(2)(d)), in accordance with the Regulations (Subdivision D of Division 3 of Part 5 of the Regulations).[19]
Part 7 of the Act also requires approved authorities with more than one school to have an implementation plan for the education reforms that it has agreed to. The Act sets the requirements for these plans and authorises the Minister to give written directions in relation to the implementation plan with which authorities must comply (section 105).
School improvement plans for Australian schools are not a new concept. Most schools already produce plans and the Government had anticipated that there would therefore be no need for schools to produce a separate improvement plan for the purposes of the Act.[20] To assist with the school planning process, education ministers endorsed the National School Improvement Tool in December 2012—it has now been available to schools and school systems since 2013.[21]
The Shadow Minister for Education, Kate Ellis, has explained that school improvement plans are also about accountability:
… school improvement plans, at their very heart, are about making sure that the money invested in schools by the federal government actually reaches classrooms—that it actually improves students' results. This is a vital part of the school reforms and our school system.[22]
The Coalition went into the 2013 election with the commitment that it would remove the ‘command and control’ features of the Act that ‘dictate’ what state and territory governments (and non-government schools) do in their schools.[23] The 2014–15 Education Portfolio budget statement signalled that consultation with school authorities would occur in 2014 to amend the Act to reduce its ‘regulatory burden’.[24] As the Minister advises in his second reading speech, these consultations are continuing, which accounts for the Bill’s provision (item 44 of Schedule 1) to extend the implementation date for the school improvement frameworks and school improvement plans.[25]
The Shadow Minister has indicated that the Opposition would consider changes that ‘might make the process easier for schools’ and that this could be a ‘good thing’, with the proviso that these changes should not be ‘at the expense of the accountability of billions of dollars of federal investment’.[26]
It is not apparent yet whether any other regulatory features of the Act will be affected as a result of the Government’s consultations.
The Senate Standing Committee for the Scrutiny of Bills (the Committee) has sought the Minister’s advice on two matters.[27]
The Committee is seeking confirmation from the Minister that retrospective provisions in Schedule 1 of the Bill do not ‘produce unfair outcomes for approved authorities or participating schools, who may have reasonably relied on the existing provisions of the legislation’.[28]
The second matter relates to the proposed new mechanism for creating and funding school programs as provided in item 19 of Schedule 1 of the Bill. The Committee is seeking information about why details are to be provided in Regulations, rather than the primary legislation, as this is not explained in the Explanatory Memorandum. The new mechanism is discussed in the ‘Key provisions’ section of this Bills Digest.[29]
The Bill’s measures will have a total financial impact of about $7.2 million in 2014–15:
- $6.8 million will be provided in 2014 for the Indigenous Boarding Schools (Additional Funding for Non‑government Schools with Substantial Numbers of Remote or Very Remote Indigenous Boarding Students) initiative, as identified in the 2014–15 Budget[30] and
- an additional $2.4 million will be paid to certain independent special schools and special assistance schools in 2015—the Explanatory Memorandum advises that this expense will appear in the Mid-year Economic and Fiscal Outlook for 2014–15.[31]
The Statement of Compatibility with Human Rights can be found at page four of the Explanatory Memorandum to the Bill. As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.
The Parliamentary Joint Committee on Human Rights considers that the Bill promotes the right to education.[32]
Following is information about three of the Bill’s provisions. The reader is referred to the Explanatory Memorandum for an explanation of the Bill’s other measures, which mostly relate to the correction of drafting errors and omissions in the Act which impact on school funding arrangements.
School programs by regulation and ministerial authority for the funding of those programs
There are a number of ways that the Australian Government establishes and funds school programs.
The majority of Australian Government recurrent funding for schools is provided as a specific purpose payment (SPP) to the states and territories under the Act. The funding for this SPP, known as ‘Students First’ funding from 2014, is appropriated from the Consolidated Revenue Fund by the Act.[33]
Australian Government funding for other school programs is provided by annual appropriations. Funding under some of these programs is provided as a tied grant to the states and territories. These grants are called national partnerships; for example, the National Partnership on the Independent Public Schools initiative.[34]
As mentioned previously, programs that target Indigenous students are also established under the Indigenous Education (Targeted Assistance) Act 2000.[35]
The Bill proposes to introduce a new mechanism for the establishment of school programs. Item 19 of Schedule 1 will insert new section 69A in the Act that will provide for the establishment of school programs by regulation. The new section will also stipulate the program details to be set out in the regulations to ‘ensure appropriate Parliamentary oversight of schools funding programs’.[36]
Item 19 of Schedule 1 also authorises the Minister to determine the amount of funding for these programs. These determinations will not be a legislative instrument and therefore will not be subject to disallowance.
Neither the Explanatory Memorandum nor the Minister’s second reading speech provide a justification for the creation of the new mechanism. The Senate Standing Committee for the Scrutiny of Bills is therefore seeking an explanation from the Minister.[37]
The first program to be established under the new mechanism will be the Indigenous Boarding Schools (Additional Funding for Non-government Schools with Substantial Numbers of Remote or Very Remote Indigenous Boarding Students) initiative. The initiative is discussed in the ‘Background’ section of this Bills Digest.
Funding for independent non-government special schools and special assistance schools
Items 11 and 31 to 34 of Schedule 2 proposes to correct drafting errors and omissions in the Act that affect transitional funding arrangements for those independent school approved authorities that are approved only in relation to one or more special schools or special assistance schools and where those schools are already funded at or above their full SRS amount.
The ‘Background’ section of this Bills Digest provides further information about this measure and the funding formula involved.
School improvement frameworks and school improvement plans
Item 44 of Schedule 1 proposes to amend subitem 9(2) of Schedule 2 of the Australian Education (Consequential and Transitional Provisions) Act 2013 to defer the implementation of school improvement frameworks and school improvement plans.[38] The current implementation date is 1 January 2015. The Bill proposes a new implementation date of 1 January 2016 or a later date as specified by a legislative instrument that is made before 1 January 2016.
The ‘Background’ section of this Bills Digest provides further information about the Act’s requirements for school improvement frameworks and school improvement plans.
There has been little commentary about the substantive content of the Bill, which reflects that its provisions are generally not contentious.
However, further amendments to the Act are likely in the near future. There is the review of the Act’s regulatory requirements, which have been flagged as a result of the Bill’s provision to defer the implementation date for the school improvement planning process.
Other developments that may affect the Act’s provisions include the review of the loading for students from low socio-economic backgrounds, which has attracted some criticism because of the way it has been conducted.[39] Some uncertainty about the future of the loading for students with disability has also been expressed following the Government’s response to the report of the Senate Select Committee on School funding.[40]
Longer term, the Government’s response to the National Commission of Audit report and the forthcoming Reform of Federation White Paper may also affect the school funding system.[41] In any event, changes to the school funding system will definitely occur as a result of new indexation arrangements which are scheduled to be introduced from 2018.[42]
Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.
[5]. For further information, see: M Harrington, Australian Education Bill 2012, Bills digest, 73, 2012–13, Parliamentary Library, Canberra, 2013, accessed 10 October 2014; and M Harrington, Funding the National Plan for School Improvement: an explanation, Background note, Parliamentary Library, Canberra, 26 June 2013, accessed 10 October 2014.
[12]. M Harrington, Funding the National Plan for School Improvement: an explanation, op. cit., p. 7.
[13]. M Harrington, Australian Government funding for schools explained: 2013 update, op. cit.
[14]. Explanatory Memorandum, op. cit., p. 3.
[15]. Personal communication, Department of Education, 15 October 2014.
[16]. Australian Government, ‘Part 2: expense measures: education’, op. cit.
[18]. An approved authority is the body to which recurrent funding under the Act is paid. For government schools, the approved authority is their relevant state or territory. For each non-government school, the approved authority is the body corporate approved by the Minister for that school. For further information, see the Glossary in Guide to the Australian Education Act 2013, accessed 20 October 2014.
[31]. Explanatory Memorandum, op. cit., p. 3.
[36]. Explanatory Memorandum, op. cit., p. 8.
[37]. Senate Standing Committee for the Scrutiny of Bills, op. cit., pp. 3–4.
[39]. Department of Education (DoE), ‘Review into low SES loading’, DoE website, accessed 16 October 2014; T Dodd, ‘Pyne’s review undermined by secrecy’, The Australian Financial Review, 6 October 2014, p. 14, accessed 16 October 2014; and J Ferrari, ‘Student funding review “rigged”’, The Australian, 9 September 2014, p. 5, accessed 16 October 2014.
[42]. Australian Government, ‘Part 2: expense measures: education’, op. cit.
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