National Report on Schooling in Australia 2010

Funding Australia’s schools

8.1 Funding developments in 2010

In 2009 the Australian Government restructured its funding to schools when the Council of Australian Governments (COAG) agreed to a new framework for federal financial relations. 

Under this framework, the Australian Government provided a significant increase to school funding through the Intergovernmental Agreement (IGA) on Federal Financial Relations, National Partnerships, including Building the Education Revolution, Digital Education Revolution, Trade Training Centres in Schools program and the Schools Assistance Act 2008. This funding approach continues in 2010.
States and Territories continue to fund specific school education initiatives for their jurisdictions.
Prior to 2009, program-based financial assistance was provided to State and Territory governments for expenditure on government schools. However, with the restructuring of Australian Government funding for schools, specific purpose education program funding is now provided as one National Schools Specific Purpose Payment (National Schools SPP) through the IGA.
Prior to 2009, funding for government and non-government schools was provided under the same legislation; now government schools are provided for under the Federal Financial Relations Act 2009 and non-government schools under the Schools Assistance Act 2008.
Due to the changes to Australian Government funding arrangements for government schools from 2009, cross-sectoral funding comparisons are no longer possible.
The major element of Australian Government funding is now provided through the National Schools Specific Purpose Payment under the IGA on Federal Financial Relations. The non-government schools funding component of the National Schools SPP is determined by the Schools Assistance Act 2008

8.1 Funding developments in 2010

Other separate components of funding are provided through National Partnerships and other school education programs funded by annual appropriations (Commonwealth Own-Purpose Expenses (COPEs)).
National Schools Specific Purpose Payment – government schools component
The National Schools SPP for government schools is provided through the Intergovernmental Agreement on Federal Financial Relations.
Associated with this funding is a National Education Agreement which sets out the objectives and outcomes for government schooling, the roles and responsibilities of each level of government, performance indicators and benchmarks, reporting mechanisms and ‘policy and reform directions’.
State and Territory governments have discretion as to how to apply the National Schools SPP to achieve the agreed outcomes.
Under the National Schools SPP the previous recurrent, targeted and capital funding has been combined into an agreed base amount. This base amount is indexed each year according to a formula based on increases in Average Government School Recurrent Costs (AGSRC) and growth in full‐time equivalent primary and secondary school enrolments.
Additional funding for government primary school students was incorporated into the SPP in 2009. This funding was due to a per capita funding increase from 8.9 per cent to 10 per cent of AGSRC. Primary and secondary students are now funded at the same percentage of AGSRC.
Funding for Indigenous students in government schools, previously provided under the Indigenous Education (Targeted Assistance) Act 2000, was also incorporated into the base amount.
The government school component of the National Schools SPP becomes part of the total State or Territory government funding pool (which includes Australian and State and Territory government funds). Each State and Territory government then allocates funds from this total pool (or distributes resources) to schools based on its particular allocative mechanism (which is different for each State and Territory).
Average Government School Recurrent Costs (AGSRC) are the benchmark for general recurrent funding levels and relate to the cost of educating a student in a government school. AGSRC are the basis of Australian Government recurrent funding for government and non-government school students. All school students are funded at a percentage of AGSRC.
The AGSRC amounts for primary and secondary school students are calculated based on State and Territory government expense data. These AGSRC amounts are changed annually after consideration of movements in the data reported to ACARA. Capital related items, such as the user cost of capital and depreciation, are excluded from the calculation of AGSRC.
National Schools Specific Purpose Payment – non-government schools component
Australian Government funding for the non‐government schools component of the National Schools SPP (for the years 2009 to 2012) is determined by the Schools Assistance Act 2008 (the Act). Funding under the Act continues to provide for general recurrent and capital purposes as well as targeted programs. Funding for the Indigenous Supplementary Assistance (ISA) is also provided under the Act.
The distribution arrangements for the non‐government schools component of the National Schools SPP vary between systemic and non-systemic non-government schools. (See Glossary for explanations of systemic and non-systemic non-government schools.)
State and Territory Treasuries distribute Australian Government general recurrent grants directly to non-systemic independent schools.
Systemic non‐government schools are paid through their system authorities. Similar to government education systems, they have the flexibility to distribute the general recurrent grants according to their own needs‐based allocative mechanisms.
Australian Government funding for targeted programs for non‐government schools is distributed through Catholic systemic school authorities and independent school associations in each State and Territory. Funding for capital grants is made through Block Grant Authorities (BGAs).
The Schools Assistance Act also provides additional recurrent funding for Indigenous students in non‐government schools. Non‐government schools in remote areas receive a higher rate of funding for Indigenous students.
Funding for Indigenous students in non‐government schools was previously provided through a number of different programs under the Indigenous Education (Targeted Assistance) Act 2000. This funding was replaced by a single per student payment – Indigenous Supplementary Assistance. The Indigenous Funding Guarantee provides transitional funding to ensure that schools do not receive less funding in dollar terms than under the previous arrangements, taking into account enrolment changes.
A remoteness loading for non-government schools is provided in recognition of the higher cost of delivering education services in regional and remote areas of Australia. Non‐government schools that have campuses located in defined remote areas receive a per student remoteness loading at 5 per cent, 10 per cent or 20 per cent of a school’s socio-economic status (SES) funding rate for general recurrent grants, depending on the degree of remoteness of the school campus.
Non‐government schools also receive funding for distance education students, at the base rate of 13.7 per cent of AGSRC on a full‐time equivalent basis.
National Partnerships
Additional funding for both government and non‐government schools is provided by a number of special purpose National Partnerships. Most of the National Partnerships have been formulated through COAG and have as their basis an agreed national goal. The structure and conditions of the National Partnerships vary, and include, in some cases, co‐payments with State and Territory government and non‐government education authorities, facilitation payments, performance rewards based on negotiated outcomes and targets, reform measures and the creation of pilot programs.
National Partnerships include:
  • Digital Education Revolution

  • Nation Building and Jobs Plan

    • Building the Education Revolution

      • National School Pride Program

      • Primary Schools for the 21st Century

      • Science and Language Centres for 21st Century Secondary Schools

  • Smarter Schools

    • Low Socio-economic Status School Communities

    • Literacy and Numeracy

    • Improving Teacher Quality

  • Youth Attainment and Transitions

  • Trade Training Centres in Schools.¹ 

Information on the content of National Partnerships is provided in the National initiatives and achievements section of this report.
Other funding
There are other Australian Government payments, made to both the government and non-government sectors, which are termed Commonwealth Own‐Purpose Expenses (COPEs). These are mostly administered by the Department of Education, Employment and Workplace Relations (DEEWR) and are funded through annual appropriations. Major school education programs in this category include:
  • National Asian Languages and Studies in Schools Program

  • National School Chaplaincy Program

  • Quality Outcomes Program.

Payments to States and Territories
National Schools Specific Purpose Payments, for both government and non‐government school sectors, are paid by the Commonwealth Treasury to State and Territory Treasuries. State and Territory Treasuries then distribute these funds to State and Territory government education departments, non‐government school education authorities and independent schools.
National Partnership payments are paid by the Commonwealth Treasury primarily to State and Territory Treasuries according to the terms of the individual partnership agreements. 

¹ While Trade Training Centres in Schools does not operate under National Partnerships, payments made to the government sector have been made using the National Partnership framework.