Public school advocates warn Albanese government billions at stake if it breaks funding promise

<span>A loophole introduced in 2018 allows states and territories to claim up to 4% of the total Schooling Resource Standard on non-school expenditures.</span><span>Photograph: Dean Lewins/AAP</span>
A loophole introduced in 2018 allows states and territories to claim up to 4% of the total Schooling Resource Standard on non-school expenditures.Photograph: Dean Lewins/AAP

Public schools stand to lose billions of dollars if the federal government breaks an election promise to remove a Coalition-era loophole from funding agreements between the commonwealth and the states, advocates have argued.

The provision, introduced by the former Morrison government in 2018, allows states and territories to spend up to 4% of the total funding in the agreements on areas not directly related to schools, such as public transport, capital depreciation, regulatory bodies and preschool.

Related: To assert Western Australian public schools will be fully funded by 2026 is simply not true | Trevor Cobbold

Data from the advocacy group Save our Schools (SOS) shows public schools have lost about $13bn in the six years since the clause was introduced. If it continued over the life of the next funding agreement, they would be short more than $26bn to 2029, the group said.

In opposition, the then shadow education minister, Tanya Plibersek, vowed to “deal with” the “accounting tricks” that allowed states to artificially boost what they claimed was their share of the funding.

But pressed on whether the federal government would renounce the policy in future funding agreements in Senate estimates last week, the assistant minister for education, Anthony Chisholm, refused to answer.

“Obviously the current agreement is one that was put in place by the previous government,” he said. “We’re … in the process of negotiating new agreements over the course of this year.”

Asked to clarify the position on the 4% clause, the education minister, Jason Clare, said the federal government was “committed to working with states and territories to get all schools on a path to full and fair funding”.

Since 2019 public schools have lost more than $3bn each in New South Wales, Victoria and Queensland to the 4% allowance, the data shows, while schools in WA lost $1.5bn and those in South Australia nearly $1bn.

The economist Trevor Cobbold, the national convenor of Save our Schools, said it was “outrageous” that state Labor governments were prepared to prolong the arrangement.

“Public schools will lose billions,” he said.

Education ministers are due to meet on Friday to continue negotiations over the next joint agreement, with states pushing for the commonwealth to raise its contribution to public schools by 5%.

The Turnbull government’s Gonski 2.0 education reforms required states to fund public schools at 75% of the Schooling Resource Standard – the benchmark for required funding based on student needs – on top of the federal contribution of 20%, leaving a funding gap.

No public school in Australia, except in the ACT, is now funded at the SRS level. In contrast, private schools in all jurisdictions except the Northern Territory are funded at more than 100%.

Last month the commonwealth reached a deal with Western Australia to lift its contribution to 22.5% by 2026, with the state government to make up the remaining 77.5%.

Related: ‘Deliberate lie’: education lobby group says ‘landmark’ school agreement falls short of 100% funding

But it was criticised by education advocates for retaining the 4% provision.

WA’s minister for education, Tony Buti, told reporters the 4% clause was “all part of public funding of our education system”.

“Every other state does it,” he said.

Cobbold said the future of public education was at stake if agreements with the other states reflected WA’s.

“The new agreement with WA has set a precedent … that will defraud public schools of billions in funding over the next five years,” he said.

“All the current agreements, apart from the ACT … are compromised by these accounting tricks that condemn public schools to ongoing underfunding.

“These provisions don’t apply to state funding of private schools. Yet state governments provide school transport for private school students and their curriculum and standards regulations apply to private schools as well.”

The Greens’ education spokeswoman, Penny Allman-Payne, said Labor had promised to bring transparency to the funding system.

“Yet here they are, doing deals to lock in public school underfunding for the foreseeable future and calling it ‘full funding’ … that directly contradicts what they said in opposition.”