Ms MACKLIN (12:11 PM) —The story of the subject matter of this bill, the States Grants (Primary and Secondary Education Assistance) Amendment Bill 2002, and of the amendments that we are debating now—the payment of establishment grants to new non-government schools—unfortunately is a sorry one. It is a story of misplaced priorities, incompetence and in some cases intransigence on the part of the government. It is important here to take a little bit of time to outline the history of this matter for the House so that we do not have any misrepresentation of what has gone on. The previous minister included funding for the provision of establishment grants in what is now the States Grants (Primary and Secondary Education Assistance) Act 2000. The relevant section, section 75, states that the minister may provide an establishment grant for a non-government school where that school meets the definition of a new school proposal as set out in another section of the act. The definition covers a number of cases.

We now know that these definitions are inadequate in light of information provided that distinguishes genuinely new schools. Unfortunately, the government has failed to check on the status of schools against its own criteria. The fundamental problem is that a `new school' is defined tautologically in the legislation as a new school—unhelpful, to say the least, for the purposes of establishing eligibility. It is not sufficient, as the government has argued, that this definition can simply be relegated as a matter for state registration authorities. This unfortunately shows how little the government understands the operation—either its own program or the substance of state legislation and responsibility in this area. Since no state or territory government provide special assistance for new non-government schools, they have no need to define a new school for the purposes of paying their recurrent funding assistance.

Although not all state and territory registration criteria and procedures are the same—and this of course is another problem for the government's position on this issue—the main responsibility of state and territory registration processes is generally to protect the educational standards that non-government schools provide to students as well as the wellbeing and safety of those students and to make sure that those schools operate in the public interest. The focus of the states is on minimal standards of curriculum and teaching and on the health and safety requirements, not on defining eligibility for Commonwealth establishments grants.

When a state or territory registration body considers a particular school, its judgments are made on the basis of the operation of that school at the time. Registration normally is conditional on the specific description of the school at the time in relation to the stage of schooling provided—that might be primary or secondary—and to its geographic location. Registration is focused entirely on what is being offered to students, regardless of the stage of development of the school. These state and territory registration processes are not concerned with the technical matter of defining a new school. It now emerges that the Commonwealth government believes that state and territory authorities define a new school for funding purposes, and in its ignorance it has passed out taxpayers' money according to criteria that do not exist.

Section 75 of the States Grants Act 2000 also states clearly the maximum amount authorised to be paid to the states under subsection (1) for any one program year and that the amounts to be paid must never exceed the maximum of $4.7 million over the period 2001 to 2004 inclusive.

Ms MACKLIN —I will do that. I am watching the clock. The commitment to establishment grants of $4.7 million was part of an overall package for schools totalling over $20 billion for that period. (Extension of time granted) I thank the government. Nowhere in that legislation do we find any reference to a per capita entitlement of $500 in the first year and $250 in the second year of operation of a new school. Those amounts appeared in the subsequent administrative guidelines issued by the department in late 2001. The parliament unfortunately does not have any role in authorising those guidelines. It soon become apparent to the government that it had tried to institute a per capita entitlement within a fixed budgetary allocation already approved by the parliament. That is a major example of administrative and ministerial ineptitude. The situation that confronted the minister at the time—this was before the election—was that there were schools, students and families that were entitled to expect this funding to assist schools in their early development but for whom the minister had failed to provide sufficient funding. That is why it is so important to get the facts of this issue on the table.

The former minister tried to rescue his error by coming back for more money. He initially included this as part of a number of initiatives in the Innovation and Education Legislation Amendment Bill 2001, which was introduced in April last year. This bill covered a huge range of different issues. It included extra funding for research and higher education, matters related to post-graduate education loans, a limit on student debt to the Commonwealth, electronic communications for students and also extra funding for assistance for educationally disadvantaged students and for students with disabilities. On top of that long list the government tried to sneak in some extra money for establishment assistance for new non-government schools which it previously had not asked for.

The funding for establishment grants in this bill— the one last year—amounted to some $14.3 million over the period 2001 to 2004, an increase of $9.6 million or 204 per cent over the original allocation. It did not take them long to figure out the big mistake that they had made. Not surprisingly the tacking-on of this proposal with a range of other amendments was not acceptable in the Senate. The previous minister was required to reintroduce the proposal through the States Grants (Primary and Secondary Assistance) Amendment Bill (No. 2) 2001, which was introduced last year in August. This bill—the one last August— was limited to the provision of increased funding for establishment grants and included the proposed allocation of $14.3 million. That amendment bill, however, did nothing to address the definitional issues that I have previously outlined. Nor did it resolve the anomaly of administrative guidelines providing a per capita entitlement within a capped amount of funding under the legislation.

Occurring, as this did, in the context of the coalition's on-going neglect of public education, the then shadow minister, my predecessor, attempted to deal with these problems by proposing to accept the amendment provided, making sure that there was a similar benefit going to new schools within the public sector. Unfortunately the Howard government refused again to express a commitment to public education and refused to accept Labor's amendments. Now we have a fresh attempt—the current bill that is before us—by the government to ask the parliament to grant additional funding to get it out of its continuing embarrassment. This amounts at best to incompetence resulting in damage to the schools concerned for which inadequate funding was originally provided. But in some ways the current bill just deepens the mire even more. The government has tried to solve its administrative problem by now introducing an open-ended per capita entitlement. As such the government is unable to state the financial impact of the bill. It estimates that the increased establishment grants will amount to $11.9 million for the 2001-2004 program years. So this is an increase of about $7 million, or 140 per cent, over the original amount. (Extension of time granted)

The government is clearly having difficulties with the financial implications of the establishment grants program. The parliament has now been presented with figures varying from $4.7 million, their first effort; to $14.3 million, their second effort; and now $11.9 million—three attempts to figure out how much they intend to spend under this program. An open-ended entitlement in the absence of clear eligibility criteria certainly does not fill the opposition with any confidence about the administration of the program. Without an application process—this legislation contains no application process—there will be incentives for school authorities to arrange their affairs to maximise their funding with no real accompanying educational effects. A school that, for sound financial or planning reasons, seeks to restructure its operation could find itself the recipient of a windfall gain that it did not really seek or need.

By providing a uniform per capita amount to all schools, the government is also deepening its demonstrated indifference to the principle of relative need as a condition for the distribution of public funding—a very important principle indeed. No reasonable person on any side of this parliament could deny how generous this government has been financially to the non-government sector, but there is more to schools funding than merely throwing taxpayers' funds about. Schools funding actually requires an understanding of the needs of schools for predicability and reliability to enable the proper planning required to deliver a good school curriculum and high quality teaching. I must say if I were operating a school in the non-government sector I would be alarmed at the degree of incompetence that the government has displayed by failing to make sure that the amount of funding that it asks the parliament to appropriate for establishment grants for new schools is indeed the required amount.

When Labor agreed to the provisions of the original legislation, it agreed on the understanding that the funds provided for establishment grants would be sufficient to cover all eligible schools. We have all, of course, subsequently found that this was not the case, and that numbers of new schools through no fault of their own were left out in the cold and unprovided for. What the government is now asking the opposition to do is to join in imposing an additional levy on the Australian people to retrieve its own incompetence and confusion and not to leave a number of schools, a number of families and a number of students in the lurch.

I want to let the government know we will certainly be writing to schools authorities affected to make clear where the responsibility for their plight and for the delays that have occurred in their funding lies. It certainly lies with the Howard government. Labor will be making clear to all school authorities in the non-government sector that we had shown our original support through our support for the original bill and that we did support the principle of establishment grants to assist schools as necessary in their early years of development. Our amendments to the current bill would go some of the way toward introducing some administrative and budgetary integrity to the provision of establishment grants. We would certainly admit that these amendments do not go nearly far enough to address some of the fundamental issues in Commonwealth policy for funding schools, but we are putting these amendments up at this stage so as to provide benefits for students in genuinely new schools for legitimate purposes.

I do want to take the opportunity today to signal the need to think through the broader policy context. We do need to know what are the legitimate start-up costs, which are clearly not the same for all schools regardless of size and circumstances. We also need to take into account the effect of these new schools on the quality of education in existing and surrounding schools. We want to know what the establishment grants can be used for so as to make sure that they are in fact going to those things that are important to start up those schools. The current legislation and the administrative guidelines are silent on these questions. We are not sure why.

We have put our amendments forward in good faith. (Extension of time granted) We did take at face value the minister's words when he concluded the second reading debate here in the chamber a few weeks ago and said that he would be prepared to give consideration to our foreshadowed amendments. He also said in a media release that he wanted this bill agreed to so that needy non-government schools could get the additional funding that they require. Unfortunately, the minister has shown, by rejecting our amendments, that he is not in fact interested in providing establishment grants on the basis of need. We have before us a government that is determined to continue grants that bear no relationship to need, that are actually the same no matter the type of school that is getting them. As I said, we still stand ready to negotiate with the government on these issues. We think the amendments that we have put forward are in the educational interests of students in all schools affected by these establishment grants and also in the interests of sound principles of public administration.

We certainly will be undertaking a fundamental review of Commonwealth support of Australia's schools in both sectors, and it will include the role of providing assistance for legitimate set-up costs in new schools, assistance that makes sense from the perspective of assisting commencing schools to provide students with a good education. But we will do this in a coherent and comprehensive manner, not like the ad hoc and, I have to say, unprincipled approach that has been taken by the government in this string of amendment bills.

We are pleased that the government has accepted our amendment for a review of the operation of the program by the end of the year 2003, that the review will include consultation through an external reference group of appropriate authorities and organisations across the whole spectrum of schooling in this country, and that the report of the review will be publicly available. I certainly hope that as a result of that review we will get some better information to make sure that we are better informed next time. However, as I said, we are disappointed that the government so far is not prepared to accept or even to negotiate the constructive amendments—and they are constructive amendments—that we have put forward that would have strengthened the eligibility and accountability criteria under this program.

Also very important to us are the amendments that we have put forward to provide more funding to needy schools. It is disappointing that the government is not even prepared to use its own index to distribute funds to schools on a more equitable basis, so we have before us a decision by the government that is clearly regressive. The opposition does understand that very few schools can manage to operate at the standards of government schools just on their fees alone, but it is the case that some schools can. Certainly from our side we believe that schools charging fees at or above the resources of government schools do not need additional assistance from public funds to establish a new school. Those schools already receive Commonwealth, state or territory funding on top of their fees and other sources of private income, and a number operate on resources that are more than twice those in government schools.

As a principle, we do not believe in the allocation of public funds in ways that increase the resource gaps between schools and different school systems, which is what we have before us as a result of the government's decision. This is not the politics of envy that the government constantly and mindlessly chants, but a commitment to equity, which we are very proud to put forward here today. The commitment to equity is an underlying principle that we will continue to pursue through our amendments in this parliament. We understand that a number of non-government schools have genuine establishment needs, but it is clear that the delays in the passage of the enabling legislation have arisen from the government's clumsy handling of this matter to date. I urge the government to reconsider its position on the amendments put forward by Labor. We have put them forward in a constructive spirit and in the best interests of all students in all schools.

Question agreed to.

Dr NELSON (Bradfield—Minister for Education, Science and Training) (12.31 p.m.)—I present the reasons for the House disagreeing to Senate amendments (1) to (9) and I move:

Question agreed to.