Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

When Julia Gillard finally announces her new school funding policy in a few weeks time, it would be the first time in eight years that Labor have put forward an alternative funding plan. Their last plan, Latham's hit list in 2004, cut funding to dozens of schools and contributed to a huge election loss. Catholic and independent schools, including many in my electorate, are not holding their breaths for Gillard's new plan.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

The member will refer to people by their appropriate titles.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

The Prime Minister's new plan. School funding is something that I have followed and been involved with for many years. I was a senior adviser to education minister Brendan Nelson the last time that there was a considerable change to school funding policy, back in 2005. At that time, the Catholic school system joined the SES funding model, the model that has now been operating for independent schools since Howard introduced it in 2001. Reforming school funding may sound straightforward, but there are four certainties that the Prime Minister would do well to understand.

The first certainty is that any change in the school funding model inevitably involves winners and losers, unless there are considerably more funds injected to lift the entire base upwards. This is not an assertion but a statement of mathematical fact. The Gonski proposals seek to realign school funding but come with a $5 billion price tag, presumably to meet the requirement that no school go backwards.

It is plainly clear that the Gillard government and state governments cannot afford this. State governments have said so. But , even if they could, modeling by the Victorian Department of Education and Early Childhood Development finds that 3,254 schools—about a third of all schools—would be worse off. There are four schools in my electorate that will be hit, including Our Lady of Lourdes in Bayswater, Holy Trinity in Wantirna South, St Luke's in Wantirna and St Judes in Scoresby. All are low-fee Catholic schools serving medium and sometimes lower income families. These schools will lose up to $750 per student. Many families would struggle to afford these schools if the fees had to rise to make up for the funding shortfall. I will be fighting to ensure that this does not happen and have written to the education minister to get a guarantee that no school will lose funds.

The second certainty is that the winners and losers which inevitably come from a new funding model cannot be predicted with any accuracy in advance. There may be an intent to achieve a certain outcome—say, to give more money to lower fee schools in certain areas—but designing a formula to achieve this is difficult due to the huge range and types of schools which exist across the nation. Hence, the modeling on Gonski shows that low-fee Catholic primary schools will be particularly hit. On the other hand, I have been informed that many very high f ee independent schools will gain considerably, including one of the most elite private boys schools in the country, which is due to gain by a million dollars per year.

The third certainty which the government fails to understand is that the indexation method for annual increases is what really matters. The government might reform the model to give a little extra in year 1 to some schools, but if the indexation method is reduced, any gain is quickly lost. Again, this is simple mathematics.

Over the last 12 years, schools have had their funding indexed against the AGSRC index , which increases by about six per cent per annum. Gonski recommends a different indexation method which we believe will see increases of two to three per cent per annum. This has a dramatic impact over the medium term. For example, an average school receiving $5,000 per student in public funds might get an immediate $1,000 boost in year one, but if the indexation rate was reduced to two per cent, they would be worse off by year five than if they had simply received the existing indexation increases with no year one boost.

The indexation rate matters and the coalition firmly supports maintenance of the AGSRC index . For all the talk about school funding, it is not the main lever for school improvement. Of course it is important, but to think that a revolution will occur because of a change to the funding model is plainly wrong. A rigorous curriculum and quality teaching is what counts.

I am very concerned about the future funding of non-government schools in this country primarily because the government does not appear to understand the factors I have outlined. The developments of the Gonski review do not give me confidence. The modeling shows that schools across the nation will miss out, including low-fee schools in my electorate. The government today would not guarantee that schools will not be worse off under their proposals.

The current system of school funding is not perfect, but no system is perfect. However, it is predictable, based on objective data, weighted towards schools serving poorer communities and provides an average six per cent increase in funding each year. It should be extended.