Do-Labor Malcolm pivots on education spending

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By Leith van Onselen

Suddenly the Turnbull Government looks like it has gotten its instruction manual on how to govern from Labor.

In the past week, we’ve witnessed it abandon its long-held phobia over federal debt and announce a borrowing binge to fund much-needed infrastructure, including Kevin Rudd-like declarations that the government can build things better than the private sector.

We’ve witnessed it effectively copy Labor’s First Home Saver accounts – a policy that it dumped in 2015 – and it has adopted Labor’s gas reservation policies.

And now the Turnbull Government has announced a revival of Labor’s Gonski school funding reforms (labelled “Gonski 2.0”) after announcing fundamental changes last year that included a reduction of cash on offer and a range of new conditions to how the money could be spent. Fairfax’s Mark Kenny explains the Coalition’s back-flip:

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Unquestionably, this is a moment. Labor had visited a withering, four-year blitzkrieg on the Coalition, pounding its dumb refusal to adopt David Gonski’s model for needs-based schools funding.

The values difference was crucial in last year’s knife-edge election and it was shaping as a first-order issue again in 2018.

…the Turnbull government’s new Gonski 2.0 funding model… claims to fully honour the spirit of the reform plan by elevating low socio-economic status schools, protecting others, and cutting unsustainable subsidies to the most privileged.

…in dumping the Coalition’s past antipathy for Gonski, Turnbull has pulled off a surprising policy pirouette, wrong-footing his Labor/union critics, and charting a course to middle-Australian households…

If Gonski’s formula was so brilliant under Labor, then its faithful adoption – according to no less a figure than Gonski himself – is equally important under Turnbull. Perhaps more so, for the extra robustness that Coalition support provides.

Under the Coalition’s plan, David Gonski will lead another review into education funding, which will examine how federal government funding should be invested to improve school and student performance, by examining how best to use the additional money to maximise student results. The review will report no later than December this year and will inform a new education funding agreement between the federal government and the states.

Importantly, Education Minister, Simon Birmingham, announced that 24 wealthy private schools would receive negative funding growth (overcoming community concerns that they are receiving far too much funding), whereas federal funding for schools would rise some 75% over the next decade – increasing from $17.5 billion to $30.6 billion by 2027.

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While Labor’s Gonski reforms were well intentioned, there were clear problems with the implementation of the needs-based model.

The initial Gonski report recommended introducing a “base rate” level of funding per student, known as the Schooling Resource Standard (SRS), along with extra loadings on top based upon several equity categories.

However, the model was bastardised by Labor. In order to convince states and territories to sign up, different deals were done with the various jurisdictions, and Labor promised that no school would lose a dollar under the deal. Thus, Gonski morphed from a nationally consistent needs-based approach to an inconsistent patchwork of deals that protected the privileged position of some wealthy private schools.

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If the Turnbull Government can re-jig Gonski to better target “need” and treat states “equitably”, then well done. The fact that it is proposing to cut funding to 24 elite private schools is a good start, especially given it would involve directly attacking the Coalition’s own base.

But ultimately, the proof of the pudding will be in the eating. And whether the Coalition can do a better job of implementing the spirit of Gonski than Labor did remains to be seen.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.