Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Today I'm introducing the Australian Education Amendment (Direct Measure of Income) Bill 2020. It supports the broader Australian government commitment to provide every child with a quality education, regardless of where they live and what school they attend, by providing funding that is fairly and transparently distributed, and allocated according to need.

The funding of non-government schools in Australia is a shared responsibility between the parents and guardians of the students attending those schools, the Australian government and the state and territory governments.

Through this bill, the Australian government is introducing a more accurate methodology to calculate the capacity of a non-government school community to contribute to the cost of schooling.

This more targeted and accurate direct measure of income will support the Australian government needs based funding model for Australian schools.

Under the government's Quality Schools Package, there will be more Commonwealth government money for disadvantaged students through loading payments, including those from remote and regional areas, those with a disability and Indigenous students.

For the first time, real needs based funding will be provided and will grow from $17.5 billion dollars in 2017 to $32.5 billion dollars in 2029.

Through this bill, the new methodology will use the best available data to estimate the capacity of parents and guardians to contribute to the cost of schooling, which will ensure more funding flows to the schools that need it the most.

The bill proposes changes to the capacity to contribute methodology and schools' transition to the uniform Commonwealth share of the schooling resource standard. The financial impact of these changes is an estimated additional $1.3 billion in Commonwealth recurrent funding over the budget and forward estimates from 2019-20 and 2022-23, and an estimated $3.4 billion increase in recurrent funding over ten years from 2019-20 to 2028-29. This will see the Commonwealth's investment in education increase to a total of over $314 billion dollars from 2018 to 2029.

The bill also includes measures to support financial certainty by allowing schools time to plan as the new arrangements are implemented.

Separate to this bill, but as part of our broader reforms to education funding, the government has also established a $1.2 billion Choice and Affordability Fund that will assist schools during the transition to the new direct measure of income contained in this bill as well as support parental choice and affordability of schools, assist schools in regional and remote areas and in drought affected areas, enhance student wellbeing and support initiatives and lift outcomes in underperforming schools.

The Australian government contributes funding to government and non-government schools through the Australian Education Act 2013.

As the Australian Education Act currently stands, recurrent school funding is calculated by reference to a base amount of funding for every primary and secondary student, along with six loadings that provide extra funding for disadvantaged students and schools. This is commonly referred to as the 'schooling resource standard'. For most non-government schools the base component of the schooling resource standard is discounted by a 'capacity to contribute percentage'.

The current capacity to contribute discount is calculated using an area based measure. Under this methodology, a school community's capacity to contribute is calculated by averaging certain indicators of the socioeconomic status (SES) for each Australian Bureau of Statistic (ABS) Statistical Area Level 1 (SA1) in which the students at the school reside—that is, the SES score for a school is based on an averaging of characteristics of all people residing in a certain geographical area (SA1), not just families of students attending the school. This methodology uses data from the ABS 2011 Census of Population and Housing.

The new methodology included in this bill was the result of recommendations made by the National School Resourcing Board in its Review of the socio-economic status score methodology: final report June 2018.

As part of the review, the board consulted widely, it received 34 substantive responses to the issues paper, including a number of detailed proposals which informed the board's consideration and analysis. The board also received 261 submissions which were largely part of a coordinated standard response from individuals or school communities.

Board members undertook 38 face-to-face consultations in all states and territories with non-government education authorities, school leaders and communities, state and territory government agencies, researchers, policy analysts and other interested parties.

The Australian government agreed to all six recommendations made by the board and this bill gives effect to the relevant recommendations to implement the capacity to contribute function.

The review found that recent innovations mean that a better measure is now available to calculate a school community's capacity to contribute, based on a more robust and reliable set of data.

The new direct measure of income is a targeted, more accurate approach, ensuring funding flows to the schools that need it most. The bill gives effect to the changes required to the calculation of financial assistance for non-government schools and rates of transition to the nationally consistent Commonwealth share under the act. Over 2020 to 2022, schools will move to the new direct measure of income when it is most financially beneficial for them to do so. During 2020 and 2021, the capacity to contribute percentage of schools will be based on the best of one of three options including the current SES methodology, the SES methodology using more recent data and the new direct measure of income. This will allow schools time to plan and adjust to the new measure.

As a result of the changes proposed in the bill there is also the need for future amendments to the Australian Education Regulation to give effect to the new direct measure of income. The Australian Education Regulation outlines the financial accountability and other conditions that are required to enable funding to be provided under the Australian Education Act.

I will provide a summary of our proposed changes to the Australian Education Regulation to state and territory governments and the non-government school sector as part of our consultation on the implementation of the new measure. It will also assist with the consideration of this bill.

The amendments to the regulation will cover how the direct measure of income capacity to contribute scores are calculated. The amendments will also include how non-government schools transition to the nationally consistent Australian government share of the Schooling Resource Standard.

The Australian government will continue to consult with schools on the new direct measure of income and how it affects them. We will continue to provide information as soon as possible to help schools plan financially for their future.

In addition, the bill will amend the Australian Education Act to clarify the authority and appropriation to continue to support the making of GST inclusive payments of non-government schools funding. This will preserve the longstanding arrangements for the payment of GST-inclusive amounts.

In summary, the bill will:

amend terminology from 'SES score' to capacity to contribute or 'CTC score';

enable the regulation to prescribe a new method for calculating a non-government school's CTC score by reference to a direct measure of income of a school community;

enable the regulation to alter the way in which the Commonwealth share for a non-government school is calculated, and alter the period over which that transition occurs, in order to manage any adverse financial impacts arising from the change in capacity to contribute score methodology;

broaden the definition of a 'majority Aboriginal and Torres Strait Islander' school and enable the minister to make a determination that a school is likely to be a majority Aboriginal and Torres Strait Islander school for the year to avoid any unintended application of the capacity to contribute methodology; and

amend the act to provide clear authority and appropriation to continue to make GST-inclusive payments, where necessary.

Government schools will continue to receive record levels of total Australian government funding, with an estimated $127.8 billion dollars of recurrent funding expected to flow to government schools from 2018 to 2029 providing strong growth in funding.

In fact, the government's spending is growing fastest for state schools at around 6.4 percent per student each year from 2018 to 2023, compared to per student growth of five percent for the non-government sector.

As a result of this bill, the school funding model will remain sector blind and Australian government funding for non-government schools will continue to transition to 80 per cent of the Schooling Resource Standard. The government will continue to refine the model over time.

The Australian government is delivering needs based funding arrangements that ensure students with the same need in the same sector attract the same level of support so that every Australian child, no matter where they live, can have access to a world-class education.

I commend the bill.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution to the short debate today about the Australian Education Amendment (Direct Measure of Income) Bill 2020. The changes proposed in this bill implement the recommendations of the independent National School Resourcing Board to move to a more accurate direct measure of income to calculate a school community's capacity to contribute to the funding of non-government schools. Labor believe that government funding for schools should always be guided first and foremost by need. When we were last in government we committed to hold a review of the SES funding model to find out if it was still the best measure for allocating funding. The move to a direct measure of parents' income should be a more accurate, robust and reliable way to determine parents' capacity to contribute to the cost of their child's education and it should allow funding to be targeted at more-needy non-government schools.

This bill, I'm sad to say, is another example of a missed opportunity for this government to deliver fair, genuine needs based funding to public schools. This legislation shows once again that the Liberal-National government has turned its back on every public school parent and child in Australia, by refusing to properly fund public schools. The government will spend $3.4 billion to deliver targeted needs based funding to private schools but it refuses to provide a single extra dollar for underfunded public schools. Some 2.5 million students go to public schools—two in three of all Australian students. The Prime Minister and his government continue to show that they think that the learning of those students who go to public schools—your sons and daughters, your children—somehow matters less than that of the daughters and sons of other Australians. Public schools educate 82 per cent of the poorest kids in Australia. They teach 84 per cent of Indigenous kids and 74 per cent of kids with disabilities too.

This Liberal-National government show that they actually believe that they should give the greatest resource to those who have the most and the least resource to those who have the least. The Liberal Party seem to think that it's fine to provide public schools with only 20 per cent of the schooling resource standard while it is committed to giving private schools 80 per cent. This government's model of school funding locks in disadvantage and it will stop the funding gap between public and private schools from ever closing. As the Australian Education Union stated in its submission to the Senate inquiry on this bill:

The government's 20% cap on commonwealth funding of public schools will ensure that a tiny minority will reach 100% of SRS by 2023, whereas … the Commonwealth Government's promise to deliver 80% of SRS to private schools by 2023 will mean that the vast majority of private schools in Australia will exceed 100% of SRS …

This is baking in difference and disadvantage in the most appalling way, which is coming to characterise this Liberal-National government.

The government's funding arrangements also include loopholes that allow states to underfund public schools by a further four per cent by artificially counting as part of recurrent expenditure the funding of items such as capital depreciation and school transport costs. For those who are listening or watching: that means that they count what it costs to send your child on a bus to school as part of the funding of your child's education. That is what this government has allowed to happen. The government's funding arrangements, despite their claims, are not needs based. The government have entrenched inequity between school systems, turning their backs on public school students and parents. This bill does nothing to address the underfunding of public schools. Instead, it commits an additional $3.4 billion to deliver targeted funding to private schools.

Australia is facing a long-term decline in our students' reading, mathematics and science skills. In 2018 Australia recorded its worst results in reading, maths and science since international testing began. In maths, 15-year-olds performed more than a year below those in 2000, a year lower in reading than those in 2000 and a year worse in science than those in 2006. By these measures, we are currently preparing a future workforce less equipped than it was 20 years ago.

This decline in school performance has worrying implications for long-term economic growth, with a one per cent change in literacy associated with a 2.5 per cent change in labour productivity. There are also major disparities within classrooms and schools, with the most advanced students in a year typically five to six years ahead of the least advanced students. Children who have not mastered the basics by the age of eight struggle to catch up for the rest of their schooling. But this Liberal-National government have no plan to reverse the shocking drop in student outcomes and they refuse to properly fund public schools.

I want to make a couple of short remarks to the context that we find our schools facing today. Teachers are incredible professionals. Making learning happen for every child in your classroom—every child who comes into your care—is not an easy thing to do. I stand here proudly as a teacher who was educated in this country and has taught in this country, and I speak to and for my colleagues in the teaching profession about the incredible anxiety and the sense of disrespect that they feel currently for their very important profession. Confusion reigns in the area of education because there is a failure of leadership.

In the coming months that lie ahead I want to give every encouragement to all of the teachers who have been doing their very best in the very complex situation in which they are very concerned about their own health and wellbeing and that of their families and students. I want the teachers of Australia to know that the parliament recognises your important contributions. For parents who are on the cusp of taking over the education of their own sons and daughters, I encourage you to continue your contact with the professionalism that's offered by teachers. They will do the very best they can to assist you while you make decisions about where it is best for your child to continue their education.

The government's decision in this bill to include amendments that provide authority to make the GST-inclusive payments to non-government schools that are prevented through scrutiny of this bill cut short the time that's available for the Senate inquiry and fast-tracked the legislation through the parliament. The reality is that, if the changes aren't passed promptly, thousands of schools doing the right thing stand to lose longstanding GST payments. Labor will not allow that to happen. However, attaching this time-sensitive amendment to a bill that proposes major changes to recurrent school funding, with such a limited opportunity for detailed scrutiny of the proposed changes, is an example of this government's failure to govern ethically, with care and with genuine leadership. This has compounded concerns, expressed by a number of submitters, that the government development of the direct-measure-of-income methodology has been rushed and has relied on far too limited a consultation.

A number of submissions suggest that a significant proportion of the related Choice and Affordability Fund will go towards assisting schools to transition as a result of the introduction of the DMI CTC methodology. Labor notes that transition funding should support schools to transition to their accurate funding level, not top up or sustain their existing funding in perpetuity. Labor calls on the government to clarify whether funding under the Choice and Affordability Fund will be allocated across all five priorities identified in the relevant guidelines. A number of schools in regional Australia have raised concerns that this bill unfairly disadvantages families at their particular schools. Their concerns have, thus far, fallen on deaf ears. Labor supports the Australian Bureau of Statistics, a department undertaking further investigation of ways to improve the quality of data and appropriateness of the methodology in these cases.

The bill, as currently drafted, allows the minister discretion to change a school's capacity-to-contribute score and, therefore, the amount of funding they receive, either by his or her own initiative or on application by the school. Where there are genuine issues with a school's capacity-to-contribute score matching the demographics of its community, this is appropriate. However, ministerial discretion should not provide a blank cheque to top up the funding of any school just because they request it—and, given this government's record on personal favours attached to funding, we should watch this very, very carefully.

The shadow minister for education has negotiated an agreement with the government to amend the regulation enabled by this bill to strengthen transparency around the appeal process and ministerial determinations on the CTC scores. The minister has agreed to amend the regulation to require that information on the outcome of appeals and own-initiative ministerial determinations is published on the Department of Education, Skills and Employment website within 30 days of a determination being made. The government will publish details of the school, the change to their CTC score, the year and period of determination, and the grounds for change. We thank the minister for his cooperation on this important improvement.

Notwithstanding concerns regarding the scrutiny and transparency of this bill, Labor accepts that the proposed arrangements will deliver a more robust, direct and accurate measure of a school community's capacity to contribute to the financial operation of the school. This will lead to the delivery of more targeted funding within the non-government school sector. Labor will, therefore, support this bill.

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

I rise to speak to the Australian Education Amendment (Direct Measure of Income) Bill 2020. I want to be clear up-front: the Greens will be opposing this bill. Crises have a way of revealing the priorities of those in power, and what could be more revealing of the Morrison Liberal-National government's priorities than their decision to rush this $3.4 billion handout of public money to private schools through parliament during a limited sitting week? When we are here to debate measures to support people through a public health crisis, what do they want to do? They still want to sneak through this cash bonanza for private schools.

We face an unprecedented international public health crisis that demands absolute focus. Yet the government has found time to enshrine another decade of educational inequality into legislation while they think that no-one is looking. Surely the government has heard about the struggles of public schools to keep their staff and students safe from the coronavirus. Alarm bells are being rung around the country about inadequate facilities, shortages of soaps and cleaning supplies, and lack of support. The schools crying out for help are the public schools that have been systemically underfunded while this callous government is prepared to once again lavish private schools with public funds.

Today, we are witness to another ridiculous instance of the Liberal and Labor parties working together to please the private school lobby at the expense of the students and teachers in our public schools. This bill fails to take into account the actual needs of Australian students, schools and their communities. It will increase Commonwealth recurrent funding for non-government schools from $13.1 billion in 2020 to $19.1 billion in 2029, without a single cent for public education. It's nothing more than another shameful display of the bipartisan commitment to entrenching inequality between private and public schools in Australia. I want to be crystal clear that the Australian Greens support, unequivocally, the universal right of every child to access education, and that means that, with public money, the 2.5 million children in public schools have to come first.

Public schools teach the majority of Australian children, including the majority of those who come from the most disadvantaged backgrounds. More than 90 per cent of their dedicated teachers are forced to dip into their own pockets to supply basic classroom resources because successive governments have opted to give handouts to private schools instead of doing the right thing and funding public schools. It's certainly not public schools building orchestra pits, Olympic swimming pools or boathouses, like some of Australia's wealthiest private schools are. Even as the myth that private schools save public money has been dispelled, we still see them being favoured. Just last week, we saw research released that found that governments would have been in a better financial position had every new enrolment in 2011 gone to public schools. Those handouts, like this bill, should be scrapped. Every single special deal should be thrown on the scrap heap and every single public school should be funded to 100 per cent of the Schooling Resource Standard.

The $3.4 billion contained in this bill is additional to the egregious $1.2 billion choice-and-affordability slush fund for private schools, which formed part of the coalition government's $4.6 billion special deal concocted to hush private schools ahead of the 2019 federal election. With the recent release of the guidelines for the slush fund, we now know for certain that private schools will have enormous freedom to spend the public's money on practically whatever they want, including investing it or stockpiling it to stave off their return to a fair funding rate. This bill locks in private schools' structural disadvantage in school funding all the way to 2029, with enough caveats to allow the government to go even further to cushion the landing for the few private schools that may see their funds reduced.

As the Australian Education Union wrote in their submission to the inquiry into this bill, 'The current situation with regard to the funding of school education is untenable. For decades it has been widely recognised that Australia’s school funding is among the most inequitable in the world.' It went on to say:

Recent years have seen the coalition government continually prioritise the appeasement of the independent and Catholic school lobbies over the maintenance of the provisions of the Australian Education Act 2013.

Last year, an ABC analysis highlighted the gross inequities in Australia's education funding system. It showed 85 per cent of private schools received more public funding than any similar public school, up from 58 per cent in 2009. The same analysis showed that the median funding gap has grown to a shocking $970 per student.

The Australian Council of State School Organisations noted in their submission to the inquiry that much of this bill is a special deal, and we feel it undermines the principle of fairness that we expect. Likewise, in their submission, Save Our Schools called the bill a special deal for private schools and one for which the Commonwealth has provided no justification, saying:

The additional $3.4 billion in funding for the switch to the direct income measure has all the hallmarks of another special deal for private schools ...

With this legislation, the government has once again passed up the opportunity to prevent 99 per cent of public schools from being underfunded by 2023. In addition to overfunding private schools at the expense of public schools, the Liberal government has restricted federal funding for public schools to 20 per cent of the Schooling Resource Standard. This is an untenable situation for public school students, staff and families because this leaves them with no avenue for reaching 100 per cent of the SRS. While the bill does go some way to improving the accuracy of the capacity to contribute score through a direct measure of income, its failure to account for the income, the wealth and the assets of private schools in assessing a school's socioeconomic status leaves it fundamentally flawed.

The Australian Education Amendment (Direct Measure of Income) Bill 2020 will leave Australia with decades more of unfairness, because of special-deal politics rather than genuine needs based funding. Instead of focusing on lifting under-funded public schools to the national standard and on the infrastructure and the curriculum reform that can ensure accessible, quality education for all our children, the government is firmly in the business of placating the private schools lobby.

I want it known that the government and Labor did their level best to take out this trash bill, under cover of a crisis. The inquiry into this terrible legislation was rushed from the get-go, but the reporting date of the inquiry was then brought forward twice. I want to acknowledge the submitters to the inquiry, whose expertise and fierce advocacy for public schools wasn't given due consideration by government. Your efforts to deal with the extremely short submission period are extremely appreciated. Both the duration of this inquiry and the ridiculous submission period hampered the committee's ability, and this chamber's ability, to consider this important issue in detail—an unnecessarily restricted public scrutiny of this $3.4 billion handout of public money to private schools. I am proud that my Greens colleagues and I will vote in solidarity with public schools against this special deal for private schools.

Simon Birmingham (SA, Liberal Party, Minister for Trade) Share this | Link to this | Hansard source

I thank senators who have spoken in relation to the Australian Education Amendment (Direct Measure of Income) Bill 2020. This bill introduces a new, more accurate methodology to calculate a non-government school community's capacity to financially contribute to the costs of schooling. The methodology encompassed in this bill resulted from recommendations made by the National School Resourcing Board in its review of the socioeconomic status score methodology. The final report was published in June 2018. I, as education minister at the time, was pleased to receive, release, and provide in-principle support for the adoption of the recommendations. I'm pleased to see that, with this legislation coming forward, those recommendations are now being adopted. The new methodology uses a more robust and reliable set of data to estimate the capacity of parents and guardians to contribute to the cost of schooling, which will ensure more funding flows to those schools that need it most and that funding for non-government schools is directed and shared in a way that better reflects the capacity of those families to contribute to the education of their children.

The bill also introduces changes to non-government schools' rate of transition to the nationally consistent Commonwealth share of the Schooling Resource Standard for non-government schools. This change will allow schools time to plan and adjust to the new measure. The bill also includes measures to support financial certainty by allowing schools time to plan as new arrangements are implemented.

The Australian government is committed to providing every child with a quality education, regardless of where they live or what school they attend. Contrary to some of the implications in contributions in the debate thus far, I remind the Senate that government schools will continue to receive record levels of total Australian government funding, with an estimated $127.8 billion of recurrent funding expected to flow to government schools from 2018 to 2029, providing very strong rates of growth in funding for those sectors. I can also say that, contrary to suggestions that somehow this legislation is being rushed through under cover of the crisis that we face, this bill was introduced into the House of Representatives way back on 26 February. At no time on 26 February did anybody foresee that we would be facing the circumstances that we face in this chamber at this time. Nonetheless, failure to pass this bill would create circumstances where the current forward methodologies in relation to capacity to contribute would continue for longer. So, in terms of equity, it is important that this bill does pass.

I note the recommendation from the Senate Education and Employment Legislation Committee that the Senate pass the bill, and their recognition that the measures in this bill will enable Commonwealth school funding to be distributed more accurately. I thank those who contributed to that inquiry.

As a result of the changes proposed in the bill, as have been referenced in debate, there are also amendments to the Australian Education Regulation. The government has provided a summary of the proposed changes to the regulation to state and territory governments and the non-government school sector as part of our consultation on the implementation of the new measure. The amendments to the regulation cover how the direct measure of income capacity-to-contribute scores are calculated and include how non-government schools will transition to the nationally consistent Australian government's share of the schooling resource standard. We acknowledge the constructive engagement with the opposition on maintaining transparency of decision-making under the regulation. I therefore table, for the Senate, two letters from the Minister for Education to his shadow ministerial counterpart in the opposition, where it has been agreed that, at the earliest practical opportunity following the passage of this bill, the government will include a clause in the regulation that requires the publication of minister-determined capacity-to-contribute scores.

The Australian government will continue to consult with schools on the new direct income measure and how it affects them. We'll continue to provide information as soon as possible to help schools plan financially for the future. It's with pleasure that I commend this bill to the Senate.

Scott Ryan (President) Share this | Link to this | Hansard source

The question is that the bill be read a second time. Those of that opinion say aye, to the contrary, no. The ayes have it.

Honourable senators: The noes have it.

Before I call a division, I'm going to offer senators an opportunity, if they would like to avoid a division, to have the votes of certain senators recorded in the Journals and Hansard on a particular position. Given the circumstances and the general wish to avoid many people gathering, I'm happy to do that. If not, I'll call a division. Division required? Senator Siewert?

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

You will record the position that the Greens oppose it?

Scott Ryan (President) Share this | Link to this | Hansard source

I'm happy to have that recorded in Hansard and the Journals, pursuant to standing orders.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

Apparently we do need to call a division.

A division having been called and the bells being rung

Honourable senators interjecting—

Scott Ryan (President) Share this | Link to this | Hansard source

We'll stop the division at the moment, with the consent of the chamber. The option is that, under the standing orders, senators in lieu of a division can have the position of themselves—and, in this case, I would allow parties—to be recognised in the Hansard and the Journals of the Senate as adopting a particular position on the bill. It's a facility that allows one senator to have a vote recorded without there being a division if there's not a second voice. It will allow you, Senator Faruqi, on behalf of your party—you've got the deputy leader and the whip here—to record the position of yourself and your Greens Senate colleagues without there being a division recorded. As I understand it, other views have been expressed by parties around the chamber.

Senator Faruqi interjecting—

Thank you, Senator Faruqi. That is appreciated by all senators, particularly myself, the clerks and the tellers. So, if the Journals and Hansard could record Senator Faruqi and the Greens senators opposing the second reading of that bill, the ayes have it.

Question agreed to.

Bill read a second time.