A new schools agreement

The Better and Fairer Schools Agreement 2025–2034 (BFSA) represents billions of dollars in funding according to proposed new recurrent funding arrangements. It also attempts to fulfil the Australian Labor Party’s long-held commitment to fully-fund Australian schools to 100% of the Schooling Resource Standard (SRS).

Released on 31 July 2024, the agreement is set to replace the National School Reform Agreement (NSRA). Originally due to expire in December 2023, the NSRA received a one year extension to allow for a Productivity Commission review and the Expert Panel’s Review to Inform a Better and Fairer Education System.

As at 23 August, only the Northern Territory has signed on to the BFSA through a bilateral agreement. There are suggestions that the agreement of other states, alongside the ACT, will be difficult to secure. Minister for Education, Jason Clare, has given those jurisdictions until September to sign on or forgo the additional $16 billion investment it represents – an ‘ultimatum’ criticised by stakeholders.

This FlagPost explains the BFSA’s priorities, as well as what remains unchanged from the NSRA. It also explores the attitudes of the states and territories, which indicate that the Government may face tough negotiations before its September deadline.

The path to the agreement

The Productivity Commission’s review of the NSRA found that the agreement had done little to improve student outcomes. Minister Clare commented on the ‘damning’ findings and stated that ‘the Albanese Government is committed to working with State and Territory Governments to get all schools to 100 per cent of their fair funding level’.

The next inquiry, the Review to Inform a Better and Fairer Education System included discussion of the SRS with reference to the objectives of the NSRA. It noted that:

...underfunding of schools, and government schools in particular, is undermining other reform efforts, with real implications for student educational and wellbeing outcomes, teacher attraction and retention, and ultimately confidence in the public education system. (p. 35)

The life of the next agreement was also discussed, with some stakeholders calling for a longer agreement (10 years, rather than 5) to ensure funding was not caught up in election cycles (p. 177). The review also called for 5-year bilateral agreements to ensure mid-point reviews informed any required reforms (p. 178).

The BFSA is for the next decade and the Northern Territory’s Bilateral Agreement suggests that as these arrangements are finalised, they will, as recommended, last for 5 years.

What’s in the agreement?

The purpose of the BFSA is to uphold the principles in the Alice Springs (Mparntwe) Education Declaration, which sets out the vision for Australia’s education system. This objective underpins the agreement’s national priorities, reform direction and enabling initiatives.

Clauses 62 and 65 of the new agreement outline 3 national priority areas which form the basis of the BFSA: equity and excellence, wellbeing for learning and engagement, and a strong and sustainable workforce. Each of these has an improvement measure which outlines corresponding targets, such as increasing Year 12 completion and general attendance rates (pp. 15–17).

The agreement also sets out national reform directions (pp. 19–21) including the implementation of a Year 1 phonics check (already available in most states and territories) and an early years of schooling numeracy check (to be developed).

Finally, it sets out national enabling initiatives (pp. 21–22) which will require collaboration across jurisdictions. One of these is to undertake a review of the SRS base and loadings calculation methodology. A review of this methodology was not within scope for either the Productivity Commission or Expert Panel review.

Implementation of national enabling initiatives is a condition of funding under section 22 and subsection 77(2A) of the Australian Education Act 2013.

What remains controversial?

The primary area of contention centres around the Australian Government’s share of the SRS. Introduced following recommendations made in the Gonski Report, the SRS is the backbone of school funding, determining the minimum amount required to educate each student (for detail see Funding for schools in Australia: a quick guide). This mechanism is provided for by the Australian Education Act 2013 – amendments to which have been foreshadowed by the Government.

Since amendments introduced in 2017, the Commonwealth has provided (except for in the Northern Territory) no more than 20% of the SRS for government schools (80% for non‑government schools). For all jurisdictions except the Northern Territory, the BFSA promises an additional 2.5% by no later than 2029, taking the overall Commonwealth contribution to 22.5%. With this 2.5% in additional funding required to be matched by the states, this is expected to take government schools to 100% of the SRS. Some jurisdictions, however, argue that 2.5% is inadequate and the Commonwealth’s share should be increased to 25%.

These calls have been echoed by the Australian Education Union (AEU). The AEU appears to have the support of most Australian education ministers who endorsed a media statement the day before the May Budget calling for the Commonwealth to raise its share by 5%. On 21 August, 5 state and territory education ministers (all but Western Australia, Tasmania and the Northern Territory) joined a protest outside Parliament House, calling for the 2.5% increase to be raised to 5%.

If the Bilateral Agreement with the Northern Territory is indicative of others to come, there is another area of potential disappointment to some stakeholders. Under current arrangements (p. 24) and the new Northern Territory Bilateral Agreement (p. 12), states may claim up to 4% of SRS funding for government schools on items including capital depreciation and school transport costs. This, it is argued, means schools are underfunded by a further 4% – amounting to almost $2 billion in 2022 (pp. 32–35).

In 2019, then Opposition Education spokesperson, Tanya Plibersek, said that under a Labor government there would be ‘no excuses, no accounting tricks’ allowed by the states. Although Minister Clare stated in February that the issue was likely to ‘be part of the negotiations’ around the new national agreement, under the Northern Territory agreement this allowance remains.