The claims by the Prime Minister, the NSW Premier and their education ministers that NSW public schools will be fully funded by 2034 are a blatant falsehood. The new school funding agreement between the Commonwealth and the NSW Government will not set public schools are not on the path to full funding as government media releases say.
Despite a substantial and very welcome boost in funding, NSW public schools will remain underfunded in 2034, 23 years after the Gonski Report recommended full funding. Public schools will remain massively underfunded in every year until 2034. It is a shameful neglect of the challenges facing public schools and the learning needs of disadvantaged students, the large majority of whom attend public schools.
In 2034, NSW public schools will be funded at 96.2% of their Schooling Resource Standard (SRS) instead of 100%. Public schools will be underfunded by $888 million in 2034. Underfunding will be over $1.8 billion a year up to 2028 and remain well over $1 billion each year until 2034. The cumulative underfunding over the ten years is estimated at $20 billion. Public schools also suffered massive losses also under the previous Morrison era agreement.
There are several reasons for the continuing underfunding.
First, the Commonwealth increase in its share of funding NSW public schools from 20% to 25% by 2034 is only gradually phased in and is heavily backloaded to the last five years. It will have increased by only 1.3 percentage point in the first five years to 2029. The funding increase over the ten years is estimated at $2.53 billion but only at $0.87 billion of that will occur in the first five years.
Second, the agreement requires the NSW Government to remove the special allowance to claim capital depreciation up to 4% of the SRS as part of its share of funding public schools by 2034. This allowance was included in the previous Morrison era agreement and defrauds public schools of funding because it is excluded from how the SRS is calculated. However, its scheduled removal is largely left to the last five years. It will be reduced by only one percentage point by 2029. The cumulative funding loss from this accounting trick will amount to $4.7 billion over the ten years.
Third, the NSW Government is allowed to claim other non-SRS expenditure as part of its share of funding public schools. It can continue to claim expenditure on the Education Standards Authority and up to 1.8% of the SRS on non-SRS expenditure allowed in bilateral agreements with other governments, most of which are for direct school transport for public school students.
The funding loss for public schools from all these non-SRS allowances will increase from $667 million in 2024 to $953 million in 2025 and to over $1 billion in 2027 to 2029. Thereafter, it will gradually reduce to $888 million in 2034, which is still much higher than in 2024. The cumulative loss of funding over the ten years is estimated at $9.8 billion.
The NSW agreement discriminates against public schools by allowing the NSW Government to claim non-SRS expenditures as part of its share of funding public schools but not for its share of funding private schools. Private schools are also subject to regulation and private school students are eligible for school transport subsidies. Discriminatory defrauding of public schools provides another resource advantage for private schools.
The agreement must be revised to give public schools a better and fairer deal. The Commonwealth should accelerate the increase in its funding share of the SRS public schools to achieve 25% by 2029. The NSW Government should remove the 4% allowance by 2029 and immediately remove the new non-SRS expenditure claims as part of public school funding.