Prime Minister Julia Gillard will take her plan for a new school funding model that would cost about $6.5 billion to the states and territories, but says she "won't be held to ransom" by those who aren't genuinely committed to education reform.
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Ms Gillard said she would introduce legislation by the end of the year for a national overhaul of school funding designed to raise the performance of Australian students to the top five countries for maths, science and reading by 2025.
In a speech to the National Press Club to unveil Labor's long-awaited response to the Gonski review into school funding, Ms Gillard described the challenge as "a national crusade".
Ms Gillard said she would ask the states and territories to sign up for a National Plan for School Improvement that would involve a six-year transition and a 13-year goal of raising student standards to the top five in the world.
But the Prime Minister refused to say how much the government would ask the states and territories to contribute.
"It is a model that I will now take to the states and territories, to Catholic and independent schools, in order to win their support," she said.
"Currently, the federal government provides about 30 per cent of the public funding to schools and the states and territories fund about 70.
"So, it is a model that challenges all of us, the federal government and state and territory governments to change and to find more resources for education.
"Specifically the independent panel challenged all governments to provide an extra $6.5 billion annually in today's money. Should this be done?
"I believe as a nation we should aim to make new money of this order available to our nation's schools, provided we can ensure that every dollar of the money makes a difference by having an appropriate transition to the new system and tying the money to improving schools."
She said there should be "no blank cheques", and state governments should pay their fair share, which would involve tough budget choices for all levels of government.
But Ms Gillard would not say whether she believed 70 per cent remained a fair share for the states and territories to pay, insisting her plan was about investing in the nation's future and the details would be negotiated in coming months.
The government will ask the states and territories, and government, private and Catholic schools to lift teacher quality, give principals more power - including over budgets and staff selection, and offer parents more information through the My School website.
"Changes of this scale take time," she said. "Our schools are already funded for next year so the beginning of change will be in 2014."
She said Labor supported the principles underpinning the Gonski review - namely, that the current funding model was failing the nation's students and that every school should receive a base funding amount with extra funding on top of that.
The Gonski review of school funding recommended the government pour an additional $5 billion a year (in 2009 dollars) into the education sector.
The panel, led by businessman and academic David Gonski, was instructed to report in line with the government's commitment that no school would lose a dollar of funding under the new arrangement.
But independent schools groups and the opposition had claimed that, if the Gonski recommendations were introduced in full, the private sector would lose money in real terms, by forfeiting an average 6 per cent indexation.
Ms Gillard said she would, in discussions with the states and territories, negotiate the new level of indexation schools would receive.
She said the government would not accept the Gonski recommendations in full, vowing that, "we want to ensure that funding for all schools will continue to rise. But we agree with that broad standard plus loadings structure and that is the new model we will adopt for funding all schools."
Under the new funding model, government schools – which educate most disadvantaged, disabled and Aboriginal students – will receive higher rates of funding.
The new "dollars follow the child" scheme would introduce a base funding rate for all students, with additional loadings to address key areas of disadvantage.
The opposition and Greens wasted little time criticising the plan this morning.
Opposition education spokesman Christopher Pyne likened the government's proposed education reforms to planning a household budget around winning Powerball.
"This is all in the Never Never," he told Sky News. "Where is the money coming from?"
Mr Pyne said the current model for school's funding was not broken, and was instead based on objective data.
"What we're going to hear today is an election policy, not an education policy," Mr Pyne said of Ms Gillard's address.
Opposition Leader Tony Abbott also said he could not trust any promises of increased schools funding.
"(Ms Gillard) can't say where the money is coming from and Labor has form when it comes to school hit lists,'' Mr Abbott told reporters in Geelong.
''This is a government that is all promise and no delivery.''
Greens leader Christine Milne said: "Labor has had since 2007 to address Howard [government] inequality in school funding. Reform is better late than never but cannot be delayed until 2020."
But Ms Gillard said that nothing short of a comprehensive national plan would lift the performance of Australia's disadvantaged children, who were falling behind.
"By year 3, 89 per cent of children from the poorest quarter of Australian homes are reading below average," Ms Gillard said.
"These are not children raised in extremes of violence, neglect or disadvantage. Just kids whose parents pack their lunch, take them to school on the way to work and expect they're being taught to read and write while they're at school. And they're not."
Government schools educate a higher proportion of Australia's disadvantaged, disabled and Aboriginal children than private and Catholic schools.
In 2010, 36 per cent of all government school students were from the lowest quarter of socio-economic advantage compared with 21 per cent of Catholic school students and 13 per cent of independent school students.
In the same year, 78 per cent of children with a disability attended government schools.
Ms Gillard said Australia must lift the performance of poor and indigenous children.
"By year 9, the average child from the same battling family is three years behind classmates from the most well-off quarter of Australian homes,'' she said.
"There are about 32,600 indigenous schoolchildren in remote Australia. By year 9, the average indigenous child in very remote Australia is reading below the level of a year 3 child in the city.''
Independent Rob Oakeshott welcomed the reforms as a regional MP in an area with high numbers of poorer and Aboriginal students.
"The disadvantage is real, and Australia's current funding formula entrenches this disadvantage," Mr Oakeshott said in a statement.
"I urge Tony Abbott and Christopher Pyne to rethink their love affair with the current unfair funding formula. The Coalition must make decisions based on the data which shows a 30 per cent gap in outcomes."
Independent Schools Council executive director Bill Daniels said his organisation had concerns about the lack of detail in the proposed new arrangements but said Ms Gillard's speech today was a positive start.
He also said that the long timeframe for implementation was understandable.
"You can't just switch funding off and on," Mr Daniels told Sky News.
with Judith Ireland, AAP
