Chapter 1 - Background to the Legislation
Progress and referral of the bill
1.1
On 29 June 2000 the Senate referred to this
Committee, for report, by leave, the provisions of the States Grants (Primary
and Secondary Assistance) Bill 2000, contingent upon the bill’s introduction
into the House of Representatives on that day. The bill was introduced in the
House of Representatives by the Minister for Education, Training and Youth
Affairs, the Hon David Kemp MP.
1.2
In pursuance of its inquiry the Committee
received 30 submissions, mainly from school organisations and associations
representing government and non-government schools, teachers and parents. The
Committee conducted public hearings in Canberra on 22 and 23 August 2000.
Provisions and objectives of the bill
1.3
The purpose of the Bill is to implement the
Government’s commitment to maintain stability in Commonwealth funding for
primary and secondary education in Australia for the 2001 to 2004 quadrennium.
1.4
The bill implements a number of decisions made
in the 1999-2000 Budget:
- introduction of the new socio economic status (SES)-based funding
arrangements for non-government schools;
- additional funding and consequent changes to funding arrangements
for the Short Term Emergency Assistance program now renamed the School Transitional
Emergency Assistance program;
- introduction of a revised structure for Commonwealth programs for
targeted assistance for schools; and
- improved accountability arrangements for Commonwealth schools
programs.
1.5
The bill includes provision for the new socio
economic status or SES based funding arrangements. Under the new arrangements,
general recurrent funding will be distributed according to need and schools
serving the neediest communities will receive the greatest financial support.
The bill allows for the increased funding to schools to be phased in over the
quadrennium.
1.6
The bill guarantees financial security for all
non-government schools. No non-government school will be financially
disadvantaged by the move to the new SES funding system. Schools that would
otherwise have their funding reduced under the new arrangements will have their
year 2000 per capita entitlements maintained, with the year 2000 dollar rates
adjusted annually in line with the latest Average Government School Recurrent Cost
(AGSRC) figures. Catholic school systems will be funded on a basis that
essentially preserves in real terms the per capita equivalent of their current
funding categories in the year 2000.
1.7
The bill also provides additional funding for
schools experiencing severe financial hardship or facing problems of viability
during the transition to the new SES arrangements. Establishment grants will
be available to assist new non-government schools with costs incurred in their
formative years and enable them to be competitive with existing schools. The
bill also provides recurrent funding for distance education students receiving
that education from non-government schools.
1.8
The bill gives legislative effect to a new
accountability framework aimed at strengthening the link between the funding
provided under Commonwealth schools programs and improved outcomes for all
Australian students. Grantees will be required to commit to achieving
performance measures or performance targets against the National Goals for
Schooling and to report progress.
1.9
The bill provides for the introduction of a
revised structure for some Commonwealth Programs of targeted assistance for
schools which is the outcome of the review foreshadowed in the 1999-2000
Budget. The revised structure combines the literacy and numeracy – grants to
schools program and the special education school support fixed grants and per
capita grants into the Strategic assistance for improving student outcomes
program.
1.10
The bill changes arrangements and simplifies
distribution of funding for the special education per capita program that has
been subsumed within the Strategic assistance for improving student outcomes
program. The bill provides for an average special education per capita
funding amount per student for every eligible non-government student. The bill
also provides for additional funding through the Strategic assistance for
improving student outcomes program to ensure that funding for independent
schools disadvantaged by the introduction of the average per capita rate will
be maintained in terms of the per capita rate for the quadrennium. The bill
also combines the priority and community languages programs into the Languages
other than English program and simplifies distribution arrangements for
this funding.
1.11
The bill provides for government school General
Recurrent Grants to be funded at a specified proportion of the dollar value of
the AGSRC figure used for funding non-government schools to avoid possible
inconsistent supplementation arrangements between the two sectors.
1.12
The bill streamlines the legislative
requirements for the Capital Grants Program. This change reflects the outcomes
of a recent evaluation of the Capital Grants Program and will be accompanied by
broader reporting by States on the state of their school infrastructure and
improvements year on year. The change does not limit the ability of the
Commonwealth to require approval on a project basis. As before, the
legislative base for the schools programs will be under-pinned by agreements
with the States and Territories as well as non-government school authorities.
1.13
The bill continues school funding, under the new
provisions described above, in succession to the current States Grants
(Primary and Secondary Education Assistance) Act 1996. The current act was
the subject of an inquiry by this Committee which reported in November 1996.
The current bill before the Committee indicates an evolution of government
policy characterised by an increased financial commitment to the school sector
and the adoption of funding processes which provide for greater equity in the
distribution of grants. The provisions in this bill reinforce the emphasis in
the current Act of the theme of choice.
1.14
Legislative arrangements for grants to
non-government schools since 1973 have seen a gradual move from a limited
acknowledgment of the rights of parents to financial assistance to educate
their children in schools of their choice, through to more deliberate and
considered acceptance of the importance of private initiative in school
education. The 1996 legislation ended restrictions hitherto ignored on the
establishment of new non-government schools with Commonwealth assistance. The
bill before the Senate confirms the Commonwealth’s commitment to the
non-government school sector. The Committee reiterates a point it made in its
1996 report on the current Act in relation to a policy which is reinforced in
the legislation being dealt with here.[1]
Australia is unique in providing public funding support to a
blended schools sector which embraces government schools, systemic
non-government schools (e.g. the Catholic system) as well as independent
non-government schools which may or may not affiliate into statewide or
national groupings. At both Commonwealth and state levels, such a heterogeneous
mix of schools is regarded as not just an accident of history, but as a
legitimate and appropriate way of education to be delivered in modern,
pluralist communities. To date, over the period of this blended system, there
has been a parity of educational performance between the public and private
sectors.
1.15
The Committee, along with the supporters of both
government and non-government schools sectors, acknowledges the important
contribution each sector makes to the education of young Australians. The
circumstances of policy development in the funding of non-government schools
over the past thirty years has given the Commonwealth the initiative in the
funding of this sector. Statements by the Minister, Hon David Kemp MP, that
the Commonwealth has the principal role in the funding of this sector should be
seen in this historical context. The Committee rejects the notion, stated in a
number of submissions to this inquiry, that the measures contained in this bill
are intended to effect a transfer of students from government to non-government
schools. Such an intention is not within the scope of governments to effect.
It can only be a matter for parental choice.
Funding and related issues
1.16
The bill appropriates some $22 billion for
schools for the 2001-2004 quadrennium. The following table shows the estimated
allocations by programs and calendar years in the bill.
Estimated allocations under the
States Grants Programs (outturn prices)
|
|
2000
$ |
2001
$ |
2002
$ |
2003
$ |
2004
$ |
|
Government
Recurrent
Capital
Targeted
Total:
|
1,185,524,000
224,959,000
297,667,000
1,708,150,000 |
1,248,572,000
229,683,000
306,809,000
1,785,064,000 |
1,321,828,000
235,655,000
317,138,000
1,874,621,000 |
1,398,908,000
241,782,000
293,902,000
1,934,592,000 |
1,481,098,000
248,068,000
296,748,000
2,025,914,000 |
|
Non-government
Recurrent
Capital
Targeted
Total:
|
2,648,228,000
88,438,000
153,274,000
2,889,940,000 |
2,873,160,000
90,295,000
159,618,000
3,123,073,000 |
3,118,037,000
92,643,000
165,491,000
3,376,171,000 |
3,383,557,000
95,051,000
157,610,000
3,636,218,000 |
3,667,232,000
85,851,000
165,616,000
3,918,699,000 |
|
GRAND TOTAL:
|
4,598,090,000 |
4,908,137,000 |
5,250,792,000 |
5,570,810,000 |
5,944,613,000 |
1.17
In addition to direct Commonwealth assistance,
states apply other Commonwealth-sourced funding to government and
non-government schools. Commonwealth and state financial arrangements have
changed with the introduction of the New Tax System and it is unclear at this
stage how much funding from GST revenues will be applied by States to school
education. Consequently, it is not possible to provide estimates of total
public funding to government and non-government schools for the quadrennium.[2]
1.18
Under the current Act, schools are funded at a
level calculated according to the Education Resources Index (ERI). There are
twelve funding levels, the highest being the most needy schools. Schools rated
as being most highly resourced and not capable of raising their own funds were
at the bottom end of the Commonwealth funding level.
1.19
The new bill will abolish the Education
Resources Index and create three different types of funding levels, all of
which are expressed as a percentage of Average Government School Recurrent
Costs (AGSRC)[3].
The three funding types are: an SES funding level; a year 2000 funding level;
or the agreed level for Catholic systemic schools.
SES Funding
1.20
The Education Resources Index (ERI), the
mechanism that allocates non-government schools and systems to one of twelve
needs-based funding categories, was reviewed in 1998. Following the release of
a consultation report several alternative funding models were investigated
further. In response to strong interest expressed in a socio-economic status
(SES) model, DETYA conducted a feasibility study in which over 90 per cent of
non-government schools participated. The result was a report in 1999 which
concluded that an SES approach provided a more equitable way of distributing
recurrent funding.[4]
1.21
A consultations report of 1997 proposed a set of
principles which should be seen as essential characteristics of any future
funding system. There were: equity, transparency, predictability, simplicity,
flexibility and cost. The Committee is satisfied that the SES model meets
these criteria.[5]
1.22
The SES Simulation Project Report explained the
need for change in the following terms:
One of the recurring criticisms of the ERI is that schools
servicing the same community, drawing from the same socio-economic base, are
not always funded in the same way. The ERI does not reflect the socio-economic
composition or economic circumstances of a school’s population ... There is now a
widespread view that changes, accretions and overlays introduced over time to
the ERI, as a response to particular problems, and reflecting changing
government policy, have distorted the original intention of ERI as a school
resource measure so that it no longer accurately reflects the relative needs of
schools.[6]
1.23
An SES (for Socio Economic Status) funding level
assesses the funding need of a school on the socio-economic level of the school
community. All schools will be given an SES assessment or score. An SES score
is calculated by linking student addresses to ABS Census Collections districts
in order to rank schools relative to each other, based on the SES of each
school’s community.
1.24
A minimum entitlement for schools funded on
their SES score is set at 13.7 per cent of AGSRC, payable to schools with SES
scores of 130 and above. The maximum entitlement for schools funded on their
SES score is set at 70 per cent of AGSRC, payable to schools with an SES score
of 85 and below. Between these SES scores, funding is payable on a continuum,
with a difference of about $55 for primary students and $75 for secondary
students.
1.25
For schools whose entitlements are based on SES
scores, the increased funding will be phased in at a rate of 25 per cent of the
increase each year, so that by 2004 schools will be funded at their new level.
Examples of funding over four years for secondary school students at different
SES levels is shown below.
|
SES Score
|
Funding Level
% of AGSRC
|
Funding dollars per enrolment
|
|
2001
|
2002
|
2003
|
2004
|
|
130
124
118
112
100
85 or less |
13.7
21.2
28.7
36.2
51.2
70.0 |
863
1335
1807
2279
3223
4406 |
863
1335
1807
2279
3223
4406 |
863
1335
1807
2279
3223
4406 |
863
1335
1807
2279
3223
4406 |
1.2
The Committee received a great deal of evidence
on the advantages of SES-based funding arrangements. Even critics of the
system conceded its advantages over the Education Resources Index method used
under the current Act. This evidence will be discussed in Chapter 2.
Year 2000 funding level
1.3
The government has undertaken to ensure that no
school will be financially disadvantaged under the new Act. Schools that would
otherwise have their funding reduced under new SES arrangements will have their
year 2000 per capita entitlements maintained, with the year 2000 dollar rates
adjusted annually in line with the most recently agreed AGSRC figures.
Arrangements for Catholic systemic
schools
1.4
In 1998 the independent Non-Government Schools
Funding Review Committee recognised the widening gap between the funds
allocated to Catholic school systems, and the relative needs of those systems,
compared with those available to government schools. The Committee determined
that Level 11 (under the ERI classification) was an appropriate and just
reflection of Catholic systemic funding requirements. New arrangements which
will prevail under this bill provides for all Catholic school systems, except
in the ACT to be funded at 56.2 per cent of AGSRC. ACT Catholic schools will
be funded 51.2 per cent of AGSRC. This agreement will expire in 2004.
Regardless of this arrangement, Catholic systemic schools may be regarded as
being subject to the SES model. The ERI classification Level 11 corresponds to
scores of 96 and 100 on the SES scale, at which levels (ACT schools at 96)
systems will be funded.[7]
1.5
Clause 74 of the bill allows the minister to
determine a grant of transitional emergency assistance to a state for a
non-government school if the minister is satisfied that exceptional
circumstances warrant it. This assistance may be short-term assistance, or may
extend over a period of years during a transitional period leading to new SES
funding arrangements.
Reporting and accountability provisions
1.6
A commitment to better reporting and improved
accountability processes has been continuing policy for governments over the
past decade. Schools, in common with all educational institutions, have been
as affected by this concern as all other public and private sector service
delivery agencies. Australian educators have become accustomed to measuring
and comparing performance in order to improve teaching and learning processes.
There are now agreed national performance standards and national reporting.
The application of improved reporting standards presents particular challenges
to federal systems of government. Public monies appropriated by Commonwealth,
state and territory legislation have to be accounted for to those legislatures,
even when shared costs obscure the expenditure trail. This issue has been
addressed by MCEETYA.
1.7
This bill provides for new requirements for
reporting and accountability linked to the National Goals for Schooling in the
21st Century. These provisions have been approved with the
commitment made by MCEETYA to nationally comparable reporting of educational
outcomes in six key learning areas covered by the national goals: literacy,
numeracy, student participation, vocational education and learning in schools,
science and information technology. A MCEETYA taskforce continues to work on
methods of reporting outcomes.
1.8
The following provisions in the bill require
recipients of grants to meet certain commitments. These are:
- commitment to National Goals for Schooling and to achieving any
performance measures, including targets, incorporated in the legislation;
- a commitment to report on progress towards achieving performance
targets;
- meeting the obligation to both report and to achieve targets, the
former commitment to be reinforced by financial sanctions in the event of
non-reporting, and the latter to be reinforced by administrative action aimed
at assisting authorities to meet their commitment.
1.9
Performance measures and targets may be
determined by the Commonwealth minister in delegated legislation following agreement
by MCEETYA. There is provision, however, for the Commonwealth minister to make
regulations to determine performance measures unilaterally should the minister
believe that there is unreasonable delay in MCEETYA reaching agreement on these
measures. All schools are equally accountable for the expenditure of public
funds and non-government schools will be treated in the same way as government
schools.
1.10
The vehicle for reporting is to be the National
Report on Schooling in all likelihood to record state and territory data on
Year 3, Year 5 and Year 7 literacy and numeracy benchmarks. The reporting will
make it possible to make comparisons of performance by gender and key equity
groups, including Indigenous students, those from non-English speaking backgrounds
and geographically isolated students. Significantly, the reporting will make
it possible, for the time, to compare the performances of states and education
authorities.
1.11
In addition to performance reporting, the bill
provides for states and approved authorities to provide reports of a kind
required by the minister in relation to financial assistance and to participate
in evaluating the outcomes of programs of financial assistance. As a condition
of funding, the minister may require a state or authority to take specific
action in relation to performance which does not meet its target. This might
include deploying advisory teachers, submitting to an independent review of
standards or supplying information to the Commonwealth about schools having problems.
1.12
These new reporting and accountability
requirements apply to programs worth around $4 billion each year (80% of
Commonwealth grants to schools). Not all the six priority areas identified by
MCEETYA are suitable for the setting of targets. The government has advised
that it may be more appropriate in some learning areas to gather national data
through surveys.
1.13
The new reporting requirements provided for in
this legislation may be seen as an indication of the government’s determination
to impose national standards in school education and establish benchmarks for
assessment of school performance in the key learning areas identified by
MCEETYA. It is significant that the reasons provided for will include
mechanisms for comparing performance across states and territories and across
the different education provider sectors. This is an important change in
accountability measures because it focuses on outputs and outcomes rather than
inputs.
New Schools
1.14
The bill also provides, in clauses 45 and 75,
grants for establishment assistance for new schools. While this provision has
not attracted any significant attention during the course of the inquiry, the
Committee wishes to make two points in this chapter about this issue. First,
it notes the complaint of the Independent Teacher Union that the Commonwealth
has not provided for itself any regulatory or planning role in relation to the
establishment of new schools[8].
The Committee is aware of one obvious reason for this: the lack of any
constitutional basis for doing so. Second, the Committee notes comment from
the Queensland Government which suggests that non-registered independent
schools may be eligible for Commonwealth assistance as a result of changes to
state laws[9].
It reminds the Queensland Government that such matters are entirely in their
hands. They alone are responsible for the proper drafting of their
legislation.
Targeted programs
1.15
Parts 7-14 of the bill provide for grants of
strategic assistance to improve outcomes for disadvantaged students in schools
and school communities. Disabled, Indigenous and low SES-level students are
targeted for this assistance, together with students from non-English speaking
backgrounds and those living in isolated areas. The bill further reduces the
complexity of Commonwealth targeted programs, following the trend evident in
changes brought about under the current act passed in 1996. The bill increases
the focus on improving student learning outcomes and strengthens accountability
processes, as described above. Following a 1999 DETYA review of targeted
programs, and a report on literacy and numeracy programs carried out by the
Australian Council for Education Research (ACER), a new targeted program
structure is provided for in this bill, covering literacy and numeracy;
special education; special education non-government centre support; priority
languages and community languages. There is also a new program aimed at
fostering the learning of Asian languages and studies of Asia.
1.16
The new characteristics of Commonwealth
financial assistance in targeted programs are increased flexibility of schools
to meet the needs of their students; and, equitable distribution of funding
through more simple processes. The need for the government to change general
recurrent grants arrangements provides an opportunity to streamline these
measures.
Conclusion
1.17
Commonwealth funding for all schools is assured
policy across party divides. There is also broad agreement across the
Parliament to the direction this legislation takes in providing for the
assurance of national standards and benchmarks. Commonwealth direction
is needed in initiating administrative processes in the states and territories
that will ensure more energetic commitment to national goals. The record of the
Government has already shown considerable progress in this regard, with
Commonwealth leadership evident in the National Literacy and Numeracy Plan, in
vocational education and training in schools, and in the Indigenous Education
Strategic Initiative Program, all approved by MCEETYA. Most members of the
Committee agree that increased Commonwealth intervention by means provided for
in this proposed legislation is necessary to ensure that MCEETYA works more
effectively in the national educational interest.
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