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Abbott Government's Budget Cuts - 16/10/2014

DEVEREAUX, Ms Jennifer, Federal Research Officer, Australian Education Union

GAVRIELATOS, Mr Angelo, Federal President, Australian Education Union

[11:31]

CHAIR: Welcome. Information on parliamentary privilege and the protection of witnesses in giving evidence to Senate committees has been provided to you. I will invite you to make a short opening statement, and then we will go on to questions.

Mr Gavrielatos : Thank you. It always presents a good opportunity for us to convey to the Senate some of our concerns and also recognise the challenges ahead. There is no doubt in our mind, and based on all of our analysis, that the 2014-15 budget and what it contains in terms of the immediate budget and also the forward projections confirms the extent to which we are experiencing broken promises, lies and cuts to education, courtesy of the Abbott government. I say that against the backdrop of the following statements—and there could be many more, but I am conscious of your time and everyone else's time. On 1 September 2013 Tony Abbott said:

I want to give people this absolute assurance, no cuts to education, no cuts to health, no changes to pensions, and no changes to the GST.

On 2 September 2013: 'There are no cuts to health, no cuts to education.' On 6 September: 'no cuts to schools; in fact, schools go up, our funding to schools and hospitals will increase, not reduce.'

As I said, the budget reveals the extent to which we are now experiencing broken promises, lies and cuts to education, whether in the area of early childhood education, school education, TAFE, VET or universities. In early childhood education we gained a reprieve. We achieved a reprieve of a cut of $406 million that was not evident in the budget. I am referring to the funding necessary to maintain the 15 hours of universal access in the year prior to compulsory schooling for our youngest children as a result of community outrage, including outrage on the part of state governments—conservative governments, mind you: Victoria, Queensland and others. On 5 September the government pledged a 12-month continuation for that program, providing certainty for 12 months but uncertainty beyond the 12 months with respect to universal access to preschool education for four-year-olds.

In the area of school education, in terms of immediate cuts and projected cuts, the budget papers themselves suggest, according to the government, a $30 billion cut to school education over 10 years. Indeed, by the government's walking away from the Gonski funding reforms, which was evident in the budget, there would be in the years 2018 and 2019—the fifth and sixth years of the Gonski reforms—a cut of $2.67 billion to what was expected by schools. And the $30 billion over 10 years of course will be the result of changes to indexation to schools funding from 4.7 per cent, as is currently in the Australian Education Act, to the CPI, which is running at about 2.5 per cent.

Also, in school education there will be a cut of $100 million from programs for students with disabilities and not a single extra cent for students with disabilities, despite the promises by the current Minister for Education, who said in opposition:

We have long argued that the current funding arrangements for students with disability and learning difficulty are unfair and inequitable. If elected to Government the Coalition will … deliver more funding for people with disability through the ‘disability loading’ in 2015.

It is interesting to note that the Minister for Education last year also said: 'I'm determined that whatever promises I make to the schools sector I'll be able to keep'. Well, he clearly did not keep those promises to students with disabilities. There are 100,000 students with disabilities not receiving any additional funding required to give them the best chance at schooling.

In the TAFE VET sector, there is a $1.5 billion cut from programs. The previous witnesses spoke about the effect of the loss of some of those programs. And even the Parliamentary Library said of those cuts to VET that:

The cutback in training provision and, in particular, the cessation of programs supporting disadvantaged job seekers to enhance their employment prospects, appears to be at odds with other budget initiatives for young people to ‘earn or learn’.

In terms of universities, there is a cut of 20 per cent and also a program of deregulation that is currently in the bill that is before the Senate. We had the benefit of appearing before a Senate inquiry last week to speak to our concerns about the cuts to universities, the deregulation of the higher education sector and also the uncapping of fees, the dramatic increase in fees and also the retrospective and prospective increase in interest charged on those fees, which will be to the detriment of teachers current and future and disproportionately impacting on women and professions that are gendered professions.

All in all, it is as I said: broken promises, lies, cuts, cuts cuts to early childhood education, school education, TAFE, VET and universities. This does not augur well for the future wellbeing of the country. Education is an investment for the country, and we can cite countless reports from the OECD, the World Bank and the IMF, all of which talk about the importance of investing in the interests of future growth, productivity and prosperity but also in tackling inequality in Australia, which is growing. I think we will leave it there to start off with, and there may be some more information that you wish to elicit from direct questions.

Senator LINES: Thanks for appearing here today. I know that you, along with many of the other groups appearing, have had to do a raft of submissions—probably unprecedented, given the harshness of the budget. You just mentioned inequality. Can you tell us how the budget exacerbates that in terms of education, whether it is early childhood, VET or higher ed?

Mr Gavrielatos : We would always hope that governments would act in a way that would ameliorate divides and ameliorate inequality, rather than exacerbate our inequality, and unfortunately that is what we are seeing, courtesy of this budget. The latest modelling that has been produced by NATSEM confirms that those who are most disadvantaged, most hit, most negatively impacted upon will be lower-income parents and families. That will exacerbate divides. And, as I said, I draw attention to reports by the IMF and other international organisations that talk about the absolute importance of tackling inequality. By failing in terms of the other aspects of the education budget to act on and commit to the reforms that were introduced—to school education, for example—we will see a continuation of the achievement gaps and a widening of the achievement gaps, denying us the opportunity to lift overall performance and close those achievement gaps. By refusing to commit to the full implementation of the Gonski school funding reforms, by refusing to commit to the two-thirds of the funding that is in the last two years of those reforms, this government is turning its back on its most disadvantaged students and needier students. As a result of that, up to 20 per cent of schools will not reach the minimum resource standard considered necessary to give every child that opportunity to succeed.

And when I talk about a minimum resource standard I am not talking about swimming pools and tennis courts; I am talking about a minimum resource standard considered necessary for schools to implement the programs that will give kids from disadvantaged backgrounds the opportunities to reach their full potential and in doing so close some of the achievement gaps. The achievement gaps of two or three years between advantaged and disadvantaged students is certainly not a source of pride, or two or three years between Indigenous and non-Indigenous students. And the same can be said for students in urban settings compared with rural settings. Yet this appears to be of little importance to this government, as do the needs of students with disabilities. It beggars belief. Before the election the statement was very clear: 'We will increase funding for students with disabilities.' They have cut $100 million from support for the students with disabilities program—and not a single cent for students with disabilities beyond that.

Senator LINES: As the Gonski review pointed out, primary and high school outcomes are currently being determined by postcode. In your view, is there anything that this government has done to rectify that?

Mr Gavrielatos : Its actions will result in a deepening inequality. Its actions will result in us not being able to address those achievement gaps that are so evident and so informed or influenced by parental background and socioeconomic background.

Senator LINES: The government has been quiet on this recently, but it was earlier in the year championing the WA model of independent public schools as something that will turn educational outcomes around. To the best of my knowledge—and I ask you because you are the Australian Education Union—I do not think there is any academic evidence around that. I just wondered what your view of that—

Mr Gavrielatos : There is no academic evidence that supports that assertion or that claim. Indeed, the evidence arising out of the first formal review from the Melbourne Graduate School of Education says that there is no such evidence of improvements, and, apart from anything else, it would be too early to make such claims. But international evidence tells us that applying such principles to the provision of education can have the opposite effect, of exacerbating divides and contributing further to the segregation of schooling, which would have a negative impact—and I am quoting the OECD reports of 2012 on equity.

Senator LINES: Is that in part due to the fact that independent schools can cherry pick teachers and so on? Is that one of the reasons?

Mr Gavrielatos : When you apply market principles to the provision of education you start skewing enrolment patterns and deepening segregation. Look, there is no evidence that this approach improves educational outcomes. However, there is evidence that it contributes to a deepening inequality in outcomes. These are just initiatives, announced and constantly referred to by a government that is intent on turning its back and distracting attention from what is required most in terms of Australian schooling, and that is to close the resource gaps that so influence the achievement gaps.

Senator LINES: One of the other areas the government is claiming success in is the truancy officers. Do you have any evidence to suggest that that is improving outcomes? It is certainly getting children to school, but do you have any evidence around that?

Mr Gavrielatos : Well, we certainly want children at school. Attendance is fundamental to any hope of improvement. But I want to refer to the program in the Northern Territory, where it is primarily in operation. The Northern Territory is the only jurisdiction in Australia that staffs schools on attendance, not enrolment. So, the bean counters in the Northern Territory actually staff schools in the hope that kids do not turn up, rather than with the expectation that every kid will turn up. It is the only jurisdiction in Australia that does that. What happens in the Northern Territory is that once the truancy officers and others experience some success in getting some kids to schools, the schools are not staffed to deal with the kids, because they are not included in the attendance rates of the previous term in order to accommodate them and put in place the remedial programs that are needed for kids who have not been at school. By the time the staffing is adjusted on the basis of attendance rates, in the absence of programs to tackle the issues that manifest with kids who have been away for a long time, the kids have left again, because they have been disengaged. So, if you want to talk about programs that are effective, we need to look at how we resource our schools, and the Northern Territory is hardly the example you would give.

Senator LINES: We heard earlier today from ACOSS and the NTEU, and they are very concerned that the higher education changes could restrict social mobility. Do you agree with that? And do you see any implications of restricted social mobility?

Mr Gavrielatos : Absolutely. When you cut university budgets by 20 per cent and you uncap fees for one reason and one reason only, and that is to make up for cuts of 20 per cent to the budget, there is plenty of modelling and there are plenty of statements made by vice-chancellors across the country which indicate that fees will go up and in some cases dramatically. Once you increase fees dramatically, it has impacts on access. There are community groups that are debt averse and they will therefore not enrol in universities. On top of that, when you change the interest level charged from the CPI to the average bond rate over 10 years and make it retrospective as well, you are further impacting on current and future teachers in our industry. The increased debt rate and the increased interest charged could serve as both a disincentive to going into teaching and it could also discourage people from staying in teaching, given that a teacher's earning capacity is not that of other professions and given that conservative state governments across the country are basically shutting down industrial tribunals and putting a cap on any salary movements for teachers.

On top of that is the added negative impact for gendered professions like teaching where women will be impacted because of breaks in service, and therefore there will be compounding effects of interest rates and, more importantly, an even longer period to repay this debt. There are other issues with deregulation that will go to the issues of quality as private for-profit providers seek to enter the market which, we believe, will drive down the entry standards into many courses.

Senator LINES: You talked about the budget disproportionally impacting on the less well-off. Can you give us some specific examples of that impact? You have spoken about students with a disability.

Mr Gavrielatos : I will talk about the funding reforms. I can talk about the VET cuts as well, but the previous witness has already done so and in our submission is what the Parliamentary Library had to say about the abolition of programs that aim to assist those who are disadvantaged to enter the workforce.

In terms of school funding reforms, if we do not see the funding reforms fully implemented, up to 20 per cent of schools will not reach the minimum resource standard necessary to implement the programs to give every child the opportunity to succeed. Of course, the implementation of that funding reform is such that we are targeting funding for the first time in Australia's history to tackle disadvantage. Schools that serve communities that are poorer, that have more Indigenous students and that are in rural remote and isolated settings would have received more funding under the full implementation to implement the programs to tackle disadvantage. That will not occur, and that will seriously compromise and undermine any opportunity to tackle what is the major problem in Australian schooling.

CHAIR: Following up on that thread: in your submission you talk about the $30 billion over 10 years that will not be going to the government-school sector. You have talked about that meaning that 20 per cent of schools will not reach minimum standard. I want to look at it from the perspective of the student. If you attend one of these schools, what are you missing out on? Tell me what you are missing out on. I do not know what the minimum standard is. Does it mean that there will be a music class cut or does it mean that there will be fewer desks or fewer toilets? What does it actually mean?

Mr Gavrielatos : It means fewer teachers, fewer staff and therefore fewer opportunities to develop and implement programs to tackle the issues inherent in educational disadvantage.

CHAIR: Give me some examples of what that looks like.

Mr Gavrielatos : Literacy and numeracy programs and extension programs.

CHAIR: So, if you are a kid who is struggling and you need a bit of extra help—

Mr Gavrielatos : We will not be able to run those programs that would give you that chance to reach your full potential. We will not be able to run the remedial programs to give you that chance to reach your full potential. We will not be able to run the extension programs to lift—

CHAIR: What are they?

Mr Gavrielatos : For example, the programs that we implement for gifted and talented children to extend those kids even further. We will not be able to run those programs either. It is about schools having the resources to implement programs that we know can and do work to give kids that opportunity to succeed and close the achievement gap. There is no level playing field. Kids come to schools from different backgrounds, and we know the impact of disadvantage, of poverty, of Indigeneity, of isolation, of rurality, on educational attainment. Surely kids should not be disadvantaged because of an accident of birth.

CHAIR: Thirty billion dollars over 10 years is a hell of a lot of money.

Mr Gavrielatos : Too right it is.

CHAIR: I can talk about health in more detail, but I struggle to see how it cannot have anything other than an enormous impact on the government schools sector. You are talking about critical things to try and address issues like literacy and numeracy. Are there other areas that you think will be impacted?

Mr Gavrielatos : In terms of our capacity to be able to do what needs to be done, of course they will be impacted. The very essence of the findings of the Gonski review goes to tackling this fundamental issue of concern of Australian schools—and this is the achievement gaps. The question we need to ask as a nation is: do we want to lift overall performance and close the achievement gaps? Are we interested in addressing this in the interests of further economic growth—the productivity and prosperity of the nation? If we do not, we will not be able to go there. Unfortunately, on all the indications evident in this budget, the government has turned its back on the most disadvantaged students, and, in doing so, will not allow us to achieve those goals. It beggars belief. I suppose on one level it is not unexpected, when the minister turned up to a function on 26 May this year, a Christian Schools Australia function, and he said that the government has a particular responsibility to non-government schools that it does not have to government schools.

CHAIR: 'Emotional commitment', I think, were the words he used.

Mr Gavrielatos : And he went on to say, 'And an emotional commitment'. Well!

CHAIR: Gonski tries to break that impasse of government and non-government schools and locate the funding with the student—if you need it, you get it. At the same time, we have got this $30 billion cut in spending over the next 10 years, in the out years. I do not see how those two things are compatible. I might be missing something. Can you explain to me how that cut somehow will mean that Gonski is preserved?

Mr Gavrielatos : Well, it will not be preserved. The government have made it very clear that they will not preserve it. They said at the end of—

Senator LINES: Despite their 'unity ticket'.

Mr Gavrielatos : Contrary to the so-called unity ticket and contrary to all the statements of 'Vote Labor, vote Liberal; there'll be no difference.' There is a difference. What it means is, in terms of the full implementation of the Gonski reforms, government schools will be disproportionately affected, because government schools were to receive 83 or so per cent of the additional money, because the money was intended to tackle—

CHAIR: For disadvantage.

Mr Gavrielatos : disadvantage—and needs based and sector blind. Schools that enrolled a lot of poor kids, a lot of Indigenous kids, students with disabilities et cetera would get more funding to tackle that disadvantage. That will now not occur, and, as result of that, 20 per cent of schools will not reach that minimum resource standard. Non-government schools will also be impacted, those that enrol—very few as they may be—a lot of kids, poorer kids and the like. In terms of the $30 billion cut, all schools will be affected, because that is driven by almost halving the rate of indexation and growth in funding for education. All schools will be affected, but clearly government schools that serve our most disadvantaged communities, our most disadvantaged kids, our neediest kids, will be disproportionately affected.

Senator URQUHART: We had the Anglicare ACT Youth Connections here earlier. I am not sure whether you heard what they had to say.

Mr Gavrielatos : No; I am sorry I did not.

Senator URQUHART: We were discussing the cuts to the Youth Connections funding and what that actually means for youth. One of the suggestions that the witnesses provided was that the only mechanism that they could see to pick up some of the slack that Youth Connections do now would be schools—people such as teachers and maybe the truant officer or other people within schools. I would be interested in your view about the capacity of schools to be able to fulfil some of the role, if not all of the role, that, currently, Youth Connections does.

Mr Gavrielatos : If governments have an expectation that schools and teachers will just keep on picking up and delivering services that have been cut by governments, then that is absurd. The question that governments need to be asked is: do you want teachers to teach or not? There is no doubt that, if attention was being directed to some of those programs that you have just described, we would hear within a nanosecond some more teacher bashing about teachers not teaching kids. We get tired of governments wanting to off-load and expecting schools and teachers to deal with every one of societies woes. Teachers are already mums and dads, ambulance officers, nurses, etcetera. Let us teach.

Senator URQUHART: I am not sure that the government has proposed that teachers do it, but the point that, I think, Youth Connections was making was that there was no other service provider out there, so it may actually be left to the schools. And if —

Mr Gavrielatos : It would not be the first time.

Senator URQUHART: That is right. And, if they do not do it, then my question was: what happens to those kids? Effectively, they just fall down the cracks and nobody is there to pick them up or find them.

Mr Gavrielatos : That is exactly what could happen. We have a lot of youth at risk.

Senator URQUHART: Yes.

Mr Gavrielatos : Our schools need to be staffed and resourced to tackle these issues. They do not go away. We need those other services to tackle the out-of-school-gate manifestation of those issues, as well. They do not go away.

Senator URQUHART: Yes. Which is what Youth Connections did. And, I guess, you have had some—

Mr Gavrielatos : Correct. There are lot of those services there.

Senator URQUHART: That is right. Without that sort of funding for services like Youth Connections, where do you see those kids going? They do not come back to school, do they?

Mr Gavrielatos : No. Exactly. We need those bridging programs to get kids in school, and then schools need to be resourced. Schools need to be resourced to offer the remedial programs to keep the kids at school and to develop those programs to get them engaged in schools. I despair about the wellbeing of all kids—not some kids but all kids. That is what is most offensive about what is happening in terms of education politics currently in Australia, when people talk about particular responsibilities and emotional commitments. I despair. It is about every child having that greatest opportunity to succeed, not some children.

Senator URQUHART: Yes. I think, as parents, we would all think like that, too. I just want to turn to school funding. You have touched upon, I think, some of the impacts of the government's plan to abandon the school funding model that was put in place by the previous government—and we have talked about Gonski—and to cap the future funding growth to a combination of the CPI and enrolment growth. Can you provide us—and this might be a big ask now, but I would happy, if you were able to do, to take it on notice—a breakdown of the financial impacts of this change by state and territory?

Mr Gavrielatos : We will take that on notice. We have, obviously, done an analysis of the budget and the forward estimates. Australia's leading funding expert, Dr Jim Morrow, did that analysis, and it is attached to our submission. If there is a request for us to delve into some other deeper analysis, we can certainly look at any such request but we cannot guarantee that that is possible.

Senator URQUHART: Okay. If you could take it on notice and have a look—

Mr Gavrielatos : We do not have access to government data. The government is not very forthcoming in providing that information.

Senator URQUHART: I understand. But from what you know about schools and the cuts in funding, and what that would mean for states and territories, I think that would be useful.

Mr Gavrielatos : To translate it to a state-by-state, or approximate state-by-state, dimension.

Senator URQUHART: Yes, fantastic. That would be great. I guess the other thing is—and I think you have talked a little bit about this but I think it is something that we cannot overemphasise—the impact of the withdrawal of funding to schools. What would that mean for students, for teachers and for communities of those schools that would not receive the amount of funding that they were originally promised? You did touch on that, but I am wondering if you could give us a little bit more detail.

Mr Gavrielatos : Those schools that expected to receive this funding—and, in some cases, we are talking about schools not receiving millions of dollars of anticipated funding, translating to up to 10 teachers or more—will not receive that funding. It is not only in one hit; it is recurrent thereafter. It means that everything that you could have achieved with that additional staff will not happen. People say it is not only about the money. Clearly it is not only about the money; is about the programs that you can implement because you have the additional staff through the money.

Senator CANAVAN: I am looking at last year's budget and this year's budget at table 7 in chapter 6, which is to do with education funding, and I am struggling to see the size of the cuts that you are identifying. In 2013-14, we had $13.7 billion against schools; this year, we had $13.6 billion. Last year, for 2014-15 we had $14.4 billion; this year, it is $14.3 billion. Last year for 2015-16, we had $15.7 billion; this year, it is $15.6 billion. Last year, for 2016-17 it was $17.2 billion; this year, it is $17 billion. Are they the cuts you are talking about?

Mr Gavrielatos : All you are referring to there is the indexation that was already in the forward estimates. Beyond that, you are not referring to the $100 million cut through the abolition of the More Support for Students with Disabilities program and you are not referring to the fact that, in the fifth year, there is not the additionality that was part of the agreements around the funding reforms.

Senator CANAVAN: So there have been no cuts in the forward estimates?

Mr Gavrielatos : Yes, there have. In the fifth year of the funding agreements, which were to have additional funding available, consistent with the agreements struck between the Commonwealth and the states, that money is not there.

Senator CANAVAN: My understanding is that the forward estimates are four years.

Mr Gavrielatos : That is right.

Senator CANAVAN: So in the last year you are saying there are some cuts?

Mr Gavrielatos : In the fifth year, this budget—

Senator CANAVAN: How much are those cuts?

Mr Gavrielatos : This budget reveals the first year of the last two years, and the money is not there.

Senator CANAVAN: How much?

Mr Gavrielatos : What it says is that $2.67 billion is the additionality of years 5 and 6 which will not be realised. You have not budgeted year 5 consistent with the national education reform agreements struck between the Commonwealth and the states.

Senator CANAVAN: How much were the cuts in the last year of the estimates?

Mr Gavrielatos : I do not have the budget papers in front of me.

Senator CANAVAN: It is only $200 million lower here in four years time.

Mr Gavrielatos : Only $200 million lower? Great.

Senator LINES: I think it is unfair for the senator quote from papers that our witness does not have before him.

Senator CANAVAN: Excuse me. Chair, this is the president of the Australian Education Union. This is a table to do with schools funding in the budget.

Senator LINES: Then share the budget papers.

Senator CANAVAN: I think he might be familiar with the funding, and he is answering the question with ease.

CHAIR: I am happy to allow the exchange. Mr Gavrielatos, I am sure you—

Mr Gavrielatos : Again let me say that the fifth year of funding, which should have been reflected in the budget, is not there. If you look at the fifth year and the sixth year, which were not in the forward estimates, that would represent a cut of $2.67 billion and a broken promise on the part of the government, which said in opposition it would honour the agreements. The agreements are six-year agreements and they have not been honoured, and that certainly also has been picked up by Mike Baird, Premier of New South Wales, and Minister Piccoli, who described it as not only a breach of commitment to the state of New South Wales but a breach of faith to the students of New South Wales.

Senator CANAVAN: Correct me if I am wrong, but my understanding is that the increased funding is operational funding of schools, not capital expenditure. Is that right?

Mr Gavrielatos : It is recurrent funding, correct.

Senator CANAVAN: So we are talking about reduced funding in 2016-17. Can you give the committee any specific examples of schools that have had to make different decisions based on what was in the budget?

Mr Gavrielatos : In the planning that schools were already engaged in, that planning has to be pulled apart because the funding that was expected is not there in the budget. So schools will not be able to plan for those additional literacy and numeracy programs. Schools will not be able to carry through their plans on the extension programs and the like. They will not be able to do so because the budget does not provide any certainty in funding—in fact, it has provided a lot of certainty: the money is not going to be there.

Senator CANAVAN: So it has not actually reduced services for students right now?

Mr Gavrielatos : Our submission is about immediate and future cuts to the budget. Immediate cuts as of next year will realise the $100 million cut to students with disabilities from the More Support for Students with Disabilities initiative and also the cuts to the Australian technical colleges that have been made.

CHAIR: Thank you very much for your evidence today. We appreciate you attending the committee hearing.

Mr Gavrielatos : Thank you very much.

CHAIR: I now welcome Mr Higgs.