The landmark review into Australian schools funding - the most rigorous into the sector since 1973, released today - recommended a $5 billion investment in Australia's government and non-government schools.

But the figure was based on 2009 estimates, meaning the cost in real terms would be significantly higher today.

GONSKI REPORT AT A GLANCE

It comes on the back of warnings that Australian students are falling behind their counterparts in Asia, and there is "significant gap" growing between high- and low-performing students.

"There is also an unacceptable link between low levels of achievement and educational disadvantage, particularly among students from low socioeconomic and indigenous backgrounds," the report found.

It showed the effect of disadvantage on students' opportunities, with 60 per cent of children who are not proficient in English, and about 30 per cent of indigenous children and those living in "very remote" areas considered "developmentally vulnerable".

In 2009, 56 per cent of children from low socio-economic backgrounds completed year 12, compared with 75 per cent of children from high socio-economic backgrounds.

The panel found that the funding between government and non-government schools should be better balanced, recommending a new "schools resources standard" (SRS), which would allocate a base funding rate for each student, with additional loadings for areas of disadvantage. Under this model, schools with a high proportion of indigenous, low-income or disabled students would be funded at a higher rate.

Governments would contribute the entire SRS funding for government schools; the level of funding directed to private and independent schools would be based on the schools' anticipated capacity to pay, but with a minimum 20-25 per cent government contribution per student.

"On the basis of the determinations made by the panel for the purposes of the modelling, the results indicated that if these arrangements had been implemented in full during 2009, the additional cost to governments would have been about $5 billion or around 15 per cent of all governments' recurrent funding for school that year."

And Mr Gonski's report highlighted the low proportion of funding the federal government now contributes.

"Based on its current proportion of total funding, the Australian government would bear around 30 per cent of the increase. How the additional cost is actually borne will need to be discussed and negotiated between all governments."

Rather than commit to any of the recommendations or findings in the review, the government will instead embark on another round of consultation. This is in addition to the more than 7000 submissions received, 39 schools visited and 71 education groups visited as part of the 18-month review process to date.

Businessman David Gonski was commissioned two years ago by the federal government to lead the wide-ranging review of funding for schooling.

Prime Minister Julia Gillard said it was impossible to achieve "the economy we will need tomorrow if we lose the education race today". However, she refused to commit to specific budgetary measures to make that happen.

"On the committing of specific dollars we will work this through exactly as Minister Garrett has outlined," Ms Gillard said. "We do not go around nmaking promises about the government's budget until we are in a position to deal in a very concrete way about what it might mean. And we're going to do that here."

Her comments followed those from School Education Minister Peter Garrett who said this morning that there would "absolutely not" be a multibillion-dollar cash injection to Australia's education sector as a result of the report.

"We've always said that we're going to bring the budget back in to surplus [and] I think that's the most important thing that we can do at this point in time," he said.

In the absence of a firm funding commitment, the government has instead indicated its willingness to investigate alternative funding streams, announcing the Parliamentary Secretary for School Education, Jacinta Collins, had been given the task of working with the philanthropic sector in an attempt to secure funding.

The government, which was handed the report in December, provided a four-page "initial" response to the lengthy review today. One page of this response was a summary of the government's education initiatives since 2007.

The federal government has committed to ongoing indexation of Commonwealth schools funding.

But it refused to guarantee that it would contribute the recommended 30 per cent of the $5 billion in additional funding.

"The model proposed would impact on all existing arrangements and school funding providers and has significant policy and financial implications for governments," the government response observed.

"For those reasons it is important that we take the next steps in this reform process thoroughly and with care ... The Australian government is committed to returning the budget to surplus in 2012-13 and to ongoing fiscal responsibility. State and territory governments also face fiscal challenges, as do parents who do not want to see school fees rise beyond their reach."

In another blow to the panel's findings, the government appeared to reject calls for greater capital funding of state and non-government schools, which the Gonski review said should take the form of grants for specific major works and infrastructure projects.

"There is a need for an expanded stream of Australian government capital funding for both the government and non-government sectors," the review found.

The government poured cold water on this finding.

"In some areas, the Australian government believes that the scope of proposed new funding contributions may be too large," the government response states.

"For example, on capital spending, the Australian government has recently completed the largest ever program of capital investment in Australian schools. While we are open to continued discussion about the most effective way to provide capital funding for schools, we do not envisage the significant expansion of the Commonwealths capital funding role."

The federal government's Building the Education Revolution capital works budget was $16.2 billion.

– with Judith Ireland

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