Scott Morrison has insisted that negotiations with the Catholic and independent education sector about school funding reform remain ongoing, amid reports the Turnbull government struck a $4.4bn deal with the sector before the Liberal party leadership spill.

Melbourne’s Herald Sun has reported that the pre-spill deal would be contingent on the Catholic sector accepting a needs-based funding model based on individual parents’ capacity to pay fees, and would form the backbone of a deal under the Morrison government.

The release of the funding deal marked the second significant policy leak within the Morrison government in two days, after the Herald Sun also published details of a $7.6bn infrastructure package aimed at saving marginal seats on Monday.

But on Tuesday the prime minister said he was “not terribly concerned at all” about the leaks and denied that a deal had been done, saying it was still “unresolved business”.

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“I’ve made no secret of the fact that I am looking with Dan Tehan, the minister, and we have been working constructively with the sector, the independent schools sector, the Catholic schools sector,” Morrison said.



“For this simple reason: I believe parents should have the opportunity to have greater choice in education. That’s always been a fundamental belief of the Liberal and National parties. And we want to make sure that the system [as] we go forward continues to respect that choice and ensures that we can have quality education and education that parents can choose from right across the country.



“So, that’s unfinished business. And when we make decisions on those, and when we reach a conclusion on those, then I’ll announce it. And until then, the government’s policy remains as it is.”

Morrison tasked Tehan with solving the fractious funding fight with the Catholic sector when he moved him into the education portfolio to replace the former minister Simon Birmingham.

The government’s stoush with the private school sector over funding has played out with increased vitriol since Birmingham stared down opposition from the Catholic sector to pass his Gonski 2.0 funding deal through the Senate last year.

The deal introduced a needs-based model that calculated private school funding based on a school’s socioeconomic status and the capacity of parents at individual schools to pay fees.

The Catholic sector said the new deal disadvantaged it because of the period over which the sector’s fees would be recalculated compared with independent schools and the way parents’ ability to pay fees is calculated.

It warned that it could lead to higher fees and even the closure of some Catholic schools.

The sector sent a warning to the government by writing to parents on the eve of the Longman byelection claiming a $40m “disadvantage” to Brisbane Catholic schools under the new funding model.

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That placed pressure on Birmingham and the Turnbull government from MPs within the Liberal party room, worried about the affect of a campaign from the Catholic sector at the next federal election.

The government agreed to review the SES formula after lobbying from the Catholic sector. The review was handed down in June and recommended using data on parents’ income and family size to recalculate government payments.

While the full detail of any deal remain under-wraps, the $4.4bn agreement with the Catholic sector would reportedly mean schools that benefited from the recommendations of the SES review could move to the new funding model sooner, while those that ­suffered from it could keep their existing socio-economic status from 2011 until 2027.

Grattan Institute education expert Peter Goss said if that was correct it suggested the government was seeking to do a “special deal of the highest order”.

“Allowing Catholic schools, or any other school, to choose whichever SES score gives them the highest funding would be a type of heads you win, tails you win approach that puts even Labor’s ‘no school lose a dollar’ approach to shame,” he said.

“This would mean allowing Catholic primary schools to keep the benefit of the old system-weighted average, treating a Catholic school in Toorak or the North Shore as average rather than on its merits.”

Goss said he’d done analysis which showed that if schools keep their old SES score whenever the new score would reduce their funding the advantages would overwhelmingly flow to schools schools in metropolitan areas.

The Labor party has promised to give an extra $250m to the Catholic sector, but has criticised the government’s funding of public schools because it included less overall projected funding relative to the previous Labor government’s arrangements.

On Tuesday the shadow education minister, Tanya Plibersek, accused the government of neglecting the public sector.

“The idea that they would have a peace deal with just the Catholics and independents but not the public sector is completely unacceptable and absolutely would have reignited the school funding wars,” she said.

“Eighty-five per cent of the cuts come from public schools. Labor’s commitment is to restore every dollar of the $17bn cut from our schools and the neediest schools will get the most, and a lot of them are in the public sector.”