Minister for Education Disowns Budget Figures

At the Budget Estimates hearings last week on education, the Minister for Education, Andrew Barr, effectively disowned the Chief Minister’s budget figures. The Minister resorted to producing ‘rubbery’ figures not reported in the Budget Papers in order to give the appearance of a real increase in government school funding for 2008-09.

Budget Paper No. 4 [p. 360] shows that funding for government schools will increase from $371.7 million in 2007-08 to $388.9 million in 2008-09. This is an increase of 4.6%.

The Consumer Price Index increase in Canberra for the year ending March 2008 was 4.6% and could well increase by more over the next financial year. Such a cost increase would offset the current dollar increase of 4.6%. It would mean that there is no net addition to the real resources, such as the number of teachers and classroom resources, available to government schools as a result of the Budget.

When questioned on this by the Estimates Committee, the Minister claimed that there is a real increase in government school funding of 6% in aggregate terms and 8% on a per capita basis [p.491, Estimates Transcript].

In making this claim, the Minister made two fudges.

First, he ignored the standard definition and use of the term “real” increase by ignoring the effects of cost increases on the availability of actual resources in schools. The new figures produced by the Minister are not adjusted for inflation, yet he continually refers to them as “real” increases in funding.

Second, the Minister has adjusted the estimated funding outcome for 2007-08 to exaggerate the difference in the re-current funding figures for 2007-08 and 2008-09. The December 2007 appropriation of $3.2 million was subtracted from the 2007-08 figures for government schools despite the fact that it is funding that was available in 2007-08.

This fudge is confirmed in the Estimates Transcript by a Department of Education official who stated:

“…the figures the Minister is quoting remove the second appropriation numbers from the 2007-08 base in order to make the calculation given to six per cent.” [p.492]

To make matters worse, the Minister included the full year impact of the 2nd appropriation initiatives in the 2008-09 estimates. This has the effect of exaggerating the difference between the funding estimates for 2007-08 and 2008-09.

Budget Paper No. 4 clearly shows the correct approach. It includes funding for the 2nd appropriation initiatives in both the 2007-08 and 2008-09 estimates [p.370].

In other words, the Minister has performed a classic fudge so as to deny the reality of the standard Budget estimates and the previous criticisms of the Budget by SOS. He has effectively disowned the official Budget figures and made up his own so as to claim a larger increase in funding than shown in the Budget papers.

The discussion of the Budget outcome for government schools is further confused by the Minister’s reference to school expenditure figures as distinct from the funding figures.

Budget Paper No. 4 [p.360] shows that government school expenditure is projected to increase from $432 million in 2007-08 to $462.5 million in 2008-09. This is an increase of 7.1%. The difference between this increase and the 4.6% increase for current dollar funding is due to an increase in depreciation costs of $13 million.

Depreciation is a book entry and does not involve additional actual expenditure in schools. When the depreciation increase is subtracted from the expenditure estimates the current dollar increase in government school expenditure is only 4% which is less than the recent CPI increase.

So, what we are left with is another financial ‘fiddle’ by the Minister for Education to obscure the fact that there will be no record increase in re-current funding for government schools in 2008-09. At best, there is no actual increase in “real” funding for government schools.

There may even be a decline in real funding if school costs increase faster than CPI as has generally occurred in the past. The Minister has contradicted his own criticisms of SOS on this point. He conceded in the Estimates hearing that wage increases were 11½ per cent in the first 2½ years of the Enterprise Bargaining Agreement with teachers [p.519]. This was substantially above the rate of CPI increase for that period.

It is contrary to all standards of public probity and good governance for a Minister to disown official Budget estimates and produce his own set of estimates to deflect public criticism. The Estimates Committee should hold the Minister for Education to account for what appears to be a deliberate ploy to mislead the public on government school funding.

Trevor Cobbold

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