The Turnbull government is willing to ditch its controversial plan to link school funding increases to inflation - slammed by Labor as a $30 billion cut to school funding - according to leaked government talking points.
Schools funding year's first political feud
Labor has committed an extra $37 billion in schools funding over ten years and demands the government match it in the first question time of 2016.
In the 2014 budget, the Coalition announced plans to peg school funding to the Consumer Price Index (CPI) and enrolments from 2018, a change estimated to save around $30 billion over the next decade. The shift, coupled with similar changes to hospital funding, infuriated state premiers and helped spark a national debate on lifting the GST to help pay for rising health and education costs.
Watering down the plan by leaving current indexation arrangements in place or moving to a new measure linked to school costs would further hamper the government's bid to return the budget to surplus.
Education Minister Simon Birmingham defended the policy as recently as January, arguing in letters to the general public that it would ensure school funding remains sustainable in the future.
But government talking points, leaked to the media on the first parliamentary sitting day of the year, suggest the government is willing to give ground on the issue in negotiations with the states and territories. The talking points say the government will "decide [an] indexation rate that better reflects the increasing cost of schooling".
This stance has been welcomed by the public, Catholic and private school sectors, all of which have strongly protested the indexation changes since the 2014 budget. Catholic and independent schools have warned that fees could rise and schools could close if funding does not keep pace with school costs.
The Coalition went to the 2013 election on a "unity ticket" with Labor on school funding and promised no cuts to education.
Opposition Leader Bill Shorten announced last week that Labor would leave the current indexation arrangements in place, accounting for most of the $37 billion in spending over a decade in its schools funding policy.
Senator Birmingham said: "The Government has been clear that the current estimates for funding from 2018 are indicative only and provide the basis for formal negotiations with all state and territory governments and the non‑government sector."
The government will negotiate with the states on funding prior to 2018, he said.
Australian Education Union president Correna Haythorpe said the government was "abandoning" its own indexation plan.
"These leaked talking points confirm the Turnbull Government is planning to scrap needs-based Gonski funding but does not support its own plan for indexation of funding beyond 2017," she said.
Ross Fox, executive director of the National Catholic Education Commission, said: "For some time, school costs – which are mostly devoted to employing teachers and other school staff – have risen at twice the rate of the consumer price index.
"Efficiencies need to be examined, but school funding should keep up with actual costs, rather than the consumer price index – which can move up and down with petrol prices and the cost of fruit and vegetables.
Colette Colman, executive director of the Independent Schools Council of Australia, said appropriate indexation was "critical" for independent schools.
"To avoid any decrease in the quality of education offered by schools it is important that public funding for students keeps pace with increased costs through annual indexation of grants based on a specific schools index," she said.
Altering school indexation levels would require Senate support given they mandated in legislation.