April 15 (Bloomberg) -- Australian Prime Minister Julia Gillard yesterday unveiled a plan to boost education spending by A$14.5 billion ($15.2 billion) over six years in what she called the biggest overhaul of school funding in 40 years.
School grants will be allocated to individual students who can choose to attend public, private or religious institutions, Gillard said at a news conference in Canberra, broadcast on Sky Television. The plan depends on state governments -- who will be required to contribute a third of the cost -- signing up to it by June 30.
The move, announced ahead of a federal election to be held in September, is a response to a review last year by a panel headed by Australian Future Fund Chairman David Gonski. It found that spending may need to rise by about A$5 billion a year to improve education at government-funded schools, particularly in disadvantaged and rural areas.
“We cannot have the strong economy that we want tomorrow, unless we have the best of education in our schools today,” Gillard said. The reforms seek to “ensure that our schools are in the world’s top five by 2025.”
The extra funds will equate to A$9,271 for each primary school student and A$12,193 for secondary school students in 2014, with additional funding for indigenous students as well as those with special needs and limited English proficiency, Gillard said. The government will also commit to annual spending growth of 4.7 percent, if states increase their own education spending by 3 percent a year, she said.
The plan’s requirements of Australia’s eight states and territories put them “in a very difficult position,” Martin Dixon, minister of education in Victoria’s ruling Liberal-National coalition, said at a news conference broadcast on Sky News.
“Education is a state responsibility,” Dixon said. “We shouldn’t be held to ransom on how that money should be spent.”
The Australian Education Union urged states and territories to stop making “excuses,” saying additional resources are the only way to ensure a high-quality education for all children.
“The cost of inaction will be far higher than the cost of investment,” Angelo Gavrielatos, president of the union, said in an e-mailed release.
In the past decade, Australian children have gone from being tied for second in reading to seventh, and from tied for fifth to 13th in mathematics among nations in the Organization for Economic Cooperation and Development, according to the Gonski report.
“The gap between the best-performing and the lowest-performing students is higher in Australia than in other OECD countries,” Treasurer Wayne Swan said in his weekly economic note yesterday. “This model has been developed by looking at what our best schools achieve, how they do it, and how much it costs them to achieve those results.”
The government must guarantee that the proposal will go to Parliament and be passed before the election, the Australian Greens party said.
“We’re willing to work with the government to get on with it and to get this passed before the next election,” Senator Penny Wright, the Greens spokeswoman for schools, said in an e-mailed release. The government must also “rethink the drastic cuts to higher education,” she said.
Reductions in support for university students and savings from changes to the nation’s pension system will help pay for the increases, Gillard said yesterday.
Australia will make more than A$2 billion of cuts to university support, Tertiary Education Minister Craig Emerson and Swan said on April 13. The cuts will come from ending a 10 percent discount students and parents receive for paying university fees upfront, requiring students to repay scholarship funds, and limiting education tax deductions.
Swan last week announced plans to curb tax concessions for wealthy Australians saving for retirement, seeking savings of about A$900 million over four years.
The prime minister has pledged to restrain spending ahead of the May 14 release of the annual budget. The budget deficit rose to A$23.6 billion for the first eight months of the financial year, A$5.7 billion wider than earlier projected, primarily due to lower tax revenue and higher personal benefit payments, according to Treasury figures released on April 12.
Gillard is campaigning to reverse a 10 percentage-point gap in opinion polls behind a political opposition led by Tony Abbott in the run-up to national elections on Sept. 14.
Win or lose in September, the prime minister said last week that her legacy is secure after introducing a carbon price, which took effect on July 1. Improvements in education, from early childhood to apprenticeships, to universities are also “closest to my heart,” she said.
These achievements are about giving children the best possible start in life and also “about the long-term future of this country,” Gillard told Bloomberg in an interview. “When I’m an older person and sitting back in the retirement home watching our nation, I will be seeing a stronger nation because we have done those things.”
Spending on education will be boosted by A$5 billion in New South Wales over the next six years, A$4 billion in Victoria and A$3.8 billion in Queensland, according to details on the betterschools.gov.au website. The additional spending in South Australia will be A$600 million, A$400 million in Tasmania, A$300 million in Western Australia and the Northern Territory while it rises by A$100 million in the Australian Capital Territory.
States and territories will be required to maintain current spending and stop further cuts, according to the website.
“The New South Wales government has constructively supported Gonski because we see it as a win for students,” Adrian Piccoli, minister for education in the state’s Liberal-National coalition government, said in an e-mailed release. “We will continue to work constructively with the Commonwealth to turn this review into an opportunity for all of our students.”
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