Monday, April 15, 2013

Unis to Pay For School Reforms

by Phillip Coorey and Joanna Mather, Australian Financial Review:

Australian Education Union
Australian Education Union (Photo credit: Wikipedia)
The commonwealth and the states will be asked to contribute an extra $14.5 billion towards schools over the next six years under the Gonski education reforms to be unveiled in Canberra on Sunday by the federal government.

The reforms, to be controversially funded in part by $2.3 billion in cuts to universities and another $520 million gained by capping education-related tax deductions, will depend on whether Prime Minister Julia Gillard can secure the support of the states and territories at a meeting in Canberra on Friday.

Under the changes, the average school student will be $4000 better off over the next six years, an average of $1.5 million extra for each school.

Of the total $14.5 billion, $4 billion would go to Victoria, $5 billion to NSW, $3.8 billion to Queensland $600 million to South Australia, and $300 million to Western Australia.

No school will be worse off but needier public schools will do better, receiving $12.1 billion. Independent schools will receive $1 billion and Catholic schools $1.4 billion. The extra money means spending on schools would rise to $49.5 billion to 2019.

States will have to commit to growing their school funding by 3 per cent while the federal government will increase funding by 4.7 per cent.

Schools Minister Peter Garrett on Sunday defended the cuts to universities, saying the record level of investment in the sector by Labor meant they would still be better off. “I believe universities will be able to accommodate these efficiencies,’’ Mr Garrett said.

Mr Garrett said schools would be funded on the basis of achieving a national consistency in standards, meaning more money would go to underperforming or struggling schools. “It is a function of school and state characteristics,’’ he said.

“This is not a model that has been derived on the basis of marginal seats. It is a model based on need.’’

The Australian Education Union said it was only right that state schools received the most money.
“Public schools are the only ones that can ensure that every child receives a high quality education,” AEU federal president Angelo Gavrielatos said.

“Public schools are the only ones that can ensure that every child receives a high quality education.’’

‘Substantial savings’ found in higher education

The decision follows Tertiary Education Minister Craig Emerson’s surprise announcement on Saturday that the government had found three areas of “substantial savings” within the higher education portfolio.

He said universities would be asked to make $900 million in “efficiency dividends” over three years, while the 10 per cent discount given to students who pay their university fees up front would be scrapped, saving $230 million.

A further $1.2 billion will be saved by requiring students to pay back start-up scholarships once they enter the workforce and an earnings threshold is reached. The savings measures were vital to pay for the government’s national school improvement plan, which Dr Emerson said was a Labor priority.

The measures would also ensure that fiscal position of the federal budget was sustainable over the long term, he said. “In an ideal world where there were no fiscal constraints, maybe these sorts of policies have been sustainable,” Dr Emerson said.

“But they are not sustainable where we are implementing a once in a generation opportunity to make sure that every young child in Australia gets a high quality education.”

$2000 cap on education-related expenses

His announcement came shortly after Treasurer Wayne Swan announced a further $520 million saving measure targeting tax deductions for self-education expenses. The amount that can be claimed for study will be capped at $2000 a year.

The government has been searching for savings to fund the Gonski school reforms, which require an extra $6.5 billion a year.

Ms Gillard has said she wants a deal with state and territory governments on a funding split by Friday’s Coalition of Australian Governments (COAG) meeting.

While the most populous states of NSW and Victoria have been largely positive that agreement can be reached, the Queensland government last week stepped up criticism of the federal government’s funding model, details of which have not been released publicly.

Queensland last week released a list of 102 schools it claims will be financially worse off in 10 years if the model is adopted. Federal Education Minister Peter Garrett rejected the claim.

Emerson defends cuts

Dr Emerson defended the cuts to universities by saying the Labor government had made record investment in higher education.

Even with the $2.3 billion in savings, commonwealth funding for higher education would continue to “rise sharply”, according to a statement from the minister’s office.

The government will place a 2 per cent efficiency dividend on university funding in 2014 and 1.25 per cent the next year, saving about $900 million.

Dr Emerson would not be drawn on whether the government was considering further cost cuts. “I won’t detail or foreshadow all of the savings exercises that the government is going through,” he said.

Cap to help pay for national plan for school improvement

Mr Swan said the $2000 cap on education-related expenses would help pay for the national plan for school improvement, which is the government’s blueprint flowing from the Gonski recommendations. The measure comes into effect from July next year.

He said the government valued the investments people made in their own skills and recognised the benefits of a tax deduction for work-related self-education expenses.

But he said under current arrangements, the deductions were unlimited and provided an opportunity for people to enjoy significant private benefits at taxpayers’ expense.

Education expenses include formal qualifications and tuition fees, textbooks, stationery and travel expenses.

The government argues that without a cap on the amount that can be claimed, students may make large claims for expenses such as first-class air fares, five-star accommodation and expensive courses.

Universities Australia slams funding cuts

Universities Australia said it was the biggest reduction to funding to the system and student support since 1996 and would allow Australia’s investment in higher education as a percentage of GDP to slip even further behind other advanced economies.

“The cuts come on top of the $1 billion stripped out of the system less than six months ago through the mid-year economic and fiscal outlook process,” UA chairman Glyn Davis said in a statement.

“Today’s announcement will be condemned by those who understand that Australia’s university sector is crucial to national productivity growth, industrial diversification and long-term economic transformation.

“For students, the loss of a range of income support measures will be compounded by the inevitable withdrawal of existing academic and professional support services provided by universities.”

Australian Technology Network chief executive Vicki Thomson said it was shortsighted to rob one sector to pay for the other. “The Government says the cuts in university funding will enable our school children to have a flying start in life,” she said.

“These very same students risk a crash landing when they arrive at underfunded universities where some tough choices will have to be made".

Cutting one area of education to fund another wrong: Greens

Greens leader Christine Milne said cutting one area of education to fund another was wrong. “If you undermine education outcomes you undermine the future,” she said in a statement.

Senator Milne said the cuts were a “direct result of the government’s failure to fix the mining tax”, which had only raised $126 million in its first six months of operation.

She accused the government of taking Australia’s education system closer to a US-style user-pays system and “doing Opposition Leader Tony Abbott’s work for him even before he becomes prime minister”.

“Universities and students will be rightly angry they are being forced to pay for the government’s unwillingness to stand up to the mining industry,” she said.
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