Under previous arrangements, some schools would have remained overfunded for more than 150 years
If previous arrangements had continued, by 2019 it is estimated that there would have been:
- only 116 schools that had managed to reach 100 per cent of the Schooling Resource Standard (SRS), with 9018 schools still being funded below
- 5524 schools still left below the funding target of 95 per cent of the SRS by 2019, underfunded by an average of almost $458,000 for every school
- around 256 schools receiving more than the full SRS by an average of $1.2 million
By 2027, 6966 schools would still have been below the full SRS by an average of approximately $690,000.
Under previous arrangements, even the most overfunded of schools were guaranteed to receive three per cent growth in funding each and every year, regardless of need.
Many of these schools would have remained overfunded for decades – more than 150 years in the worst case.
The transition to the new model is faster
Over the next decade, all schools will move to being funded at consistent Commonwealth shares of the SRS.
In line with states having full constitutional responsibility for schools, the Commonwealth will fund:
- 20 per cent of the total SRS for government schools, reflecting the Commonwealth's role as the minority public funder of government schools
- 80 per cent of the total SRS for non-government schools, reflecting the Commonwealth's role as the majority public funder of non-government schools.
A majority of schools currently attract less than the new Commonwealth shares – to ensure they receive their new share of Commonwealth funding sooner, these schools will transition to the new shares in six years (by 2023).
Schools that are currently funded above the new Commonwealth shares will transition to them over 10 years (by 2027).
This is a much faster than the more than 150 year transition under previous arrangements and it allows time for schools to adjust and plan for the future.
A small number of schools will have their recurrent funding reduced
Over the 10 year transition to the new needs-based funding arrangements, more than 99 per cent of schools will receive increases in their Commonwealth per student funding.
A very small number of non-government schools are expected to have their recurrent funding reduced as they transition to the SRS. This is because these non-government schools have historically received more funding than similar schools with students with the same level of need.
The funding reduction will occur in a manageable way, with most affected schools set to have a reduction in Commonwealth funding of less than two per cent a year over the next four years.
Additional Commonwealth funding will ease the transition
Some schools expected to have a reduction may find it hard to adjust to the change of funding. This could be, for example, a school with a higher operating cost due to their proportion of students from non-English speaking backgrounds. For schools needing assistance, the Government is providing targeted additional financial support over 10 years through adjustment assistance.
Adjustment assistance will be temporary, targeted, and provided on a case by case basis according to strict criteria. The Australian Government Department of Education and Training is consulting with the sector and will seek independent advice to finalise clear and reasonable criteria for adjustment assistance. More detailed arrangements will be announced following this consultation with the sector.
The Australian Government will also provide additional funding and support over the next 10 years to ensure a smooth transition to the new arrangements. This includes $78.5 million (over 10 years) to improve educational outcomes for Northern Territory Government school students and $20 million (over 10 years) to support literacy programs in Tasmania.