Prime Minister Kevin Rudd has threatened to withdraw more than $42 billion from state and territory governments unless they lift schools' performance and begin publishing educational ''league tables''.
Mr Rudd outlined a new hardline approach to education standards yesterday, suggesting the Commonwealth would intervene to sack principals or merge schools if it felt state and territory governments weren't doing enough to improve results.
He also wants to give the poorest schools immediate $500,000 cash injections, although how much of that would come from Commonwealth coffers and how much from the states and territories has yet to be negotiated under the National Policy Partnerships program.
Addressing the National Press Club, Mr Rudd said he would not back away from a probable stoush with Labor premiers and chief ministers over his plan.
Mr Rudd's speech drew an irate response from the Australian Education Union, which condemned the Prime Minister for following what it called the extreme policies and threats of the former Coalition government.
State and territory governments reacted with more caution, warning that the devil would be in the detail once negotiations got under way.
Labor has pledged a minimum of $42 billion for the next quadrennial round of funding for all Australian schools, but Mr Rudd announced yesterday, ''We will be making agreement on individual school performance reporting a condition of the new national education agreement to come into effect from January 1, 2009.''
Former Liberal education ministers Brendan Nelson and Julie Bishop also threatened to withhold funding if states did not produce league tables, introduce performance pay for teachers and give principals the power to hire and fire.
Opposition education spokesman Tony Smith noted yesterday that in the past ''the Labor state governments and teachers' unions blocked many of these crucial reforms at every turn''.
Mr Rudd said the ''three pillars'' of the continuing education revolution included improving the quality of teaching, making school reporting transparent and improving achievement in disadvantaged schools. Their details would be negotiated at Council of Australian Governments meetings scheduled for October and December.
Mr Rudd said at the press club, ''The argy-bargy on this is going to be significant with the states, we accept that, but we intend to prosecute this.''
In a ramping up of his rhetoric on the education revolution, Mr Rudd threatened Commonwealth intervention in the management of individual schools if the states and territories failed to lift their performance.
''Where, despite best efforts, these schools are not lifting their performance, the Commonwealth expects education authorities to take serious action such as replacing the school principal, replacing senior staff, reorganising the school or even merging it with other, more effective, schools.''
Mr Rudd said he made no apologies if parents were to take their children out of underperforming schools.
Asked whether league tables and the spectre of school mergers would unduly panic parents, Mr Rudd replied, ''No one wants to merge a school with another school if you can possibly avoid it.
''But you know if you're a bunch of mums and dads and you see, through the transparency measures, that your local school is performing really badly and has done so for many years and there hasn't been any real turnaround, we've got to look at some practical hard disciplines at the end of the day about what you're going to do about it.
''You can either say, 'Well, let's hope that something ultimately turns up or, furthermore, that you get new management into the school', or if that doesn't work then you've got to actually, for the sake of the kids, look at a different arrangement.''
Mr Rudd said he believed league tables would assist Australia's more transient population. ''When people move interstate one of the things they want best and quickest is readily available comparative information on the schools within that geographic region.''
He could not understand why public institutions such as schools should not be accountable to the community that funded their salaries and running costs.
He said any comparison of schools would compare like with like, taking account of their particular characteristics and socio-economic make-up. It was ridiculous to think of comparing a government school in the outer suburbs with Geelong Grammar.
''We should not tolerate underperformance. It damages students irreversibly.
''It fails their families. And therefore it must change.''
Mr Rudd also pledged to establish new standards to reward school principals and the best-performing teachers, and to pay for teacher recruitment, development and excellence.
''The package will also include measures to recruit the nation's most talented graduates into teaching and place them where they can make the greatest difference.
''Currently, most teachers reach a salary ceiling at around $75,000. If they aspire to earn more, they must leave the classroom.''
Mr Rudd favoured American and British programs that provide incentives to top university students to move into teaching careers.