Fact check: Has the Government cut $22 billion from schools?

Updated

The claim

Despite its wishful thinking, the Turnbull Government's May 2 announcement of "new record growing funding for Australian schools" has not brought "the school funding wars to an end".

On May 3, Labor's education spokeswoman Tanya Plibersek published a Facebook post stating: "The Liberals are cutting $22 billion from schools. That's like sacking 22,000 teachers."

The same day, Ms Plibersek told the media:

"Mr Turnbull revealed $22 billion worth of cuts to school funding over the next 10 years. That means cuts to funding for schools in the country and the city, big schools and little schools, schools from battling postcodes."

With a Government touting record levels of education spending, and an Opposition speaking of cuts, what is the reality?

RMIT ABC Fact Check takes a deep dive into the figures.

The verdict

Ms Plibersek's claim is misleading: the Government is not cutting $22 billion from schools.

Commonwealth budgets set out spending over a four year period.

According to the 2017-18 budget handed down on May 9, Commonwealth schools funding will continue to rise every year.

And a recent projection released by the Government predicts that funding will continue to increase over the next ten years.

Based on Labor's stated commitments and the Government's own document, Labor intends to spend more on schools in the future than the current Government.

But this does not change the fact that school funding continues to rise year on year.

The analogy to sacking teachers is also misleading.

Employing 22,000 teachers over 10 years may well cost around $22 billion, but given there is no reduction in existing funding, 22,000 teachers would not have to be "sacked".

School funding from Gonski to Quality Schools

The past five years has seen a back and forth debate over a complicated system of "needs based" school funding.

In April 2013, Labor prime minister Julia Gillard announced the "National Plan for School Improvement", often referred to as the "Gonski reforms".

Under the plan, the Commonwealth and the states and territories were to increase funding to public and private schools over time.

The funding was based on a new "Schooling Resource Standard" or SRS, which was a per student figure plus a loading to address student and school disadvantage.

Commonwealth funding was to increase by 4.7 per cent (for schools that received less per student than the SRS) and 3 per cent (for schools that were already beyond the SRS) a year, until the SRS target was met.

Parts of the plan were put into law in the Australian Education Act 2013, other parts are in regulations and in agreements with states and territories.

But as governments changed, so did future funding commitments:

Agreements with the states

In 2013, the Gillard government attempted to reach funding agreements with the states and territories.

It was intended that the states and territories would all sign on to the "National Education Reform Agreement" (NERA) and there would also be separate funding agreements.

Ultimately, only NSW, SA, Victoria and Tasmania signed onto the national agreement.

Clause 15 of that agreement allows any party to terminate their involvement at any time.

Separate bilateral agreements between the Commonwealth and NSW, SA and the ACT set out the additional funding that each were entitled to receive until 2019.

The NSW Government claims that the Turnbull Government arrangements fall $1.8 billion short of the funding the state was promised under the 2013 agreement for 2018 and 2019.

The NSW Education Department would not provide Fact Check with a copy of the 2013 funding agreement to back up its claim of a shortfall.

It does acknowledge that the May 9 budget provides an increase in school funding from the Commonwealth of $820 million over the four financial years to 2020-21.

Because they did not enter into bilateral funding agreements under the NERA, the rate of increase of Commonwealth funding for Victoria, Tasmania, Western Australia, the Northern Territory and Queensland is determined by the Federal Education Minister (as allowed by Part 4 of the Australian Education Act 2013).

What is Labor's alternative?

As part of its "Your Child. Our Future" education policy for the 2016 election, Labor promised that "the Gonski funding and reforms will be delivered on-time and in-full".

The Parliamentary Budget Office estimates that Labor's policy would have cost around $35.5 billion over 10 years, made up of:

$5.3 billion for the period between 2017-18 and 2019-20

$30.2 billion for the seven years between 2020-21 and 2026-27.

Have we heard this one before?

This is not the first time Labor has accused the Government of cutting education funding years into the future.

In his budget in reply speech on May 11, 2017, Opposition Leader Bill Shorten said:

"Three years ago – having promised no cuts to schools, the Liberals ripped away $30 billion. And last week they told the parents and students of Australia to be grateful they're now only cutting $22 billion."

The claim of $30 billion in cuts was primarily based on a chart in the Government's own 2014-15 budget overview, showing a slower rate of growth in spending between around 2018 and 2024-25.

The overview claimed that "sensible indexation arrangements for schools from 2018" combined with measures relating to hospitals, "will achieve cumulative savings of over $80 billion by 2024-25".

Back in 2014, Fact Check found that these claims of savings or cuts over 10 years involved rubbery figures, given the uncertainty involved in long-term estimates.

Where does the $22 billion come from?

In 2014, the Government helped the Opposition make its "$30 billion cuts" allegation by taking credit for large savings in the budget. The Government has done it again.

Ms Plibersek's spokesman tells Fact Check that "proof" of $22 billion of cuts comes from a Government document distributed to journalists.

The document came from the Government and was distributed to selected journalists "on background".

It somehow fell into the hands of the Opposition, who then published an excerpt on Facebook.

The document sets out figures that the Government sought to highlight, including the additional funding that the Government says it is providing schools, and the "savings" it is making compared to what it calls "Labor's arrangements".

4 years (2018-2021) 10 years (2018-2027) Additional funding compared to 2016-17 budget $2 billion $18.6 billion "Savings" compared to "Labor's arrangements" $6.3 billion $22.3 billion Total funding growth from 2017 26.1% 74.6%

Also included is an estimate of total Commonwealth recurrent education funding for the ten year period 2018-2027.

Labor separately provided Fact Check with an estimate of its policy over the same period, based on the PBO's costing of Your Child. Our Future.

A look at the figures does show a difference of approximately $22 billion over 10 years.

Calendar Year Government estimate Labor policy 2018 $18.5 billion $19.9 billion 2019 $19.6 billion $21.8 billion 2020 $20.9 billion $23.3 billion 2021 $22.1 billion $24.6 billion 2022 $23.4 billion $26 billion 2023 $24.7 billion $27.3 billion 2024 $26.1 billion $28.6 billion 2025 $27.5 billion $29.9 billion 2026 $29 billion $31.2 billion 2027 $30.6 billion $32.1 billion 10 year total $242.4 billion $264.5 billion

Is an increase a cut?

When Labor announced its schools policy in its last year of government, it spoke of an additional $9.8 billion spend over six years.

As is normal budget practice, Labor only budgeted for the first four years of the reforms.

Labor would be justified in claiming that if its 2013 schools plan (or 2016 election policy) is followed, there will be higher levels of schools funding from 2018 than under the Government's Quality Schools plan.

The Government concedes the point in its document distributed to journalists.

But even under the Government's plan, funding is projected to continue to increase over the next 10 years.

Until 2020, the per student amount on which the Schooling Resource Standard is based will increase by 3.56 per cent annually, and from 2021 it will be indexed to keep pace with cost and wages growth in the broader economy, with a minimum annual increase of 3 per cent.

And sacking teachers?

Labor's reference to sacking teachers is also misleading.

It has made an reasonable rough estimate that $22 billion could be used to employ 22,000 teachers a year over 10 years (based on a cost of hiring a teacher of around $100,000 per year).

But "sacking" teachers implies money is being taken away from existing budgets.

A more apt analogy would be that 22,000 extra teachers cannot be hired.

Sources

Topics: health-policy, budget, alp

First posted