Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
School Funding Investment
08/04/2016
Commonwealth funding for schools

BRUNIGES, Dr Michele, Secretary, Department of Education and Training

COOK, Mr Tony, Associate Secretary, Schools and Youth, Department of Education and Training

PATTIE, Mr David, Acting Group Manager, Schooling Group, Department of Education and Training

Committee met at 09:05

CHAIR ( Senator Dastyari ): I declare open this hearing of the Senate Select Committee on School Funding Investment. These are public proceedings, although the committee may determine to, or agree to a request to, have evidence heard in camera. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as contempt. It is also a contempt to give false or misleading evidence to a committee. If a witness objects to answering a question, the witness should state the grounds upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may also be made at any other time.

I remind those contributing that you cannot divulge confidential personal identifying information when you speak. If you wish to supplement your evidence with written information, please forward it to the secretariat after the hearing. I welcome officials from the Department of Education and Training. I note that the minister was invited to attend as well but, unfortunately, with his busy schedule he was unable to attend. We may try and see if we can get him at a later date.

I remind officials that the Senate has resolved that an officer of a department of the Commonwealth or of a state or territory shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

Thank you so much for appearing before us today. Dr Bruniges, I understand that this is your first appearance before a Senate inquiry?

Dr Bruniges : Yes, it is.

CHAIR: We obviously read about your appointment, but when did you officially start?

Dr Bruniges : Monday.

CHAIR: I invite you to make a brief opening statement, if you would like to.

Dr Bruniges : Thank you so much and thank you for the opportunity to appear at this inquiry. In order to assist the committee in its deliberations, I would like to make a brief statement. Specifically, I would like to describe the Australian government's funding to schools and policy and arrangements from 2018. I will also provide some information on what the government is doing for schools and students in rural, regional and remote areas as well as what it is doing to increase the uptake of science, technology, engineering and mathematics subjects in primary and secondary schools across Australia. In line with the terms of reference for this inquiry, I will focus on government schools, but discussion on non-government schools is included for context.

As the committee would be aware, commencing in 2014, the Commonwealth recurrent funding for all schools has been provided under the Australian Education Act 2013. Funding is calculated with reference to the base per student amount, plus loadings that target student and school disadvantage, including students from lower socioeconomic backgrounds, students with disability, Aboriginal and Torres Strait Islander students, students with low English proficiency, school size and location. For most non-government schools, the base per student amount is discounted by the anticipated capacity of their school community to financially contribute towards the school's operating context. There is no equivalent discount for government schools. Government schools and non-government schools, majority Aboriginal and Torres Strait Islander schools, special schools, special assistance schools and sole provider schools all have a capacity to contribute of zero.

In all sectors, funding is transitioning from levels under the previous funding arrangements to levels under the new funding arrangements. Only five states and territories—New South Wales, Victoria, South Australia, Tasmania and the ACT—are signatories to the National Education Reform Agreement, NERA. Of those, only three—New South Wales, South Australia and the ACT—signed a bilateral agreement with the previous government to be fully participating under the act. To provide funding certainty, the current government made a decision to fund all states and territories the same from 2014 to 2017, regardless of whether they had reached an agreement with the previous government. This includes reinstating $1.2 billion in funding for government schools.

The funding envelope for this period was an amalgamation of a number of Australian government school funding elements, including recurrent funding and a number of national partnerships. It was also based on the total public funding model, in that it took into account the combined level of public funding from the Commonwealth and state and territory governments. The Gonski additional funding was offered on a two-to-one basis from the Commonwealth—that is, the Commonwealth would provide $2 for every $1 provided by the state and territory governments to close the funding gap between the current total public level and the school resourcing standard target. This additionality funding is a small proportion of the total school funding.

Historic levels of funding strongly influence the quantum of Gonski funding that each state attracts, which has resulted in states receiving very different percentages of their SRS from the Commonwealth. This ranges from an estimated 13 per cent in Western Australia to 23 per cent in the Northern Territory based on the department's 2015-16 MYEFO numbers. This means that two schools with exactly the same characteristics would attract different funding amounts from the Australian government depending on which state they are located in.

As with all school education matters, it is important to keep in mind the context of the Australian government's role in education when considering how best to fund and support students. The Australian government is not the majority funder of government schools, and it is not responsible for registering or running schools. Under the Australian Constitution, the Commonwealth has no specific power in relation to schooling and it does not have a direct role in the registration, administration or operation of schools. States and territories are the primary funders of schools in Australia. For government schools, state and territory governments distribute total public funding to schools in their jurisdiction according to their own needs based allocation models. From around 1987 to 2012 there has been a real increase in total government expenditure of 113 per cent. At the same time, enrolments have grown by only 18 per cent. Data from the Report on Government services show that over the past 10 years Commonwealth recurrent funding per student for all schools has increased in real terms by 36.7 per cent while state/territory recurrent funding per student increased by just 4.6 per cent. Australia wide, the public school system receives 82 per cent of its funding—

CHAIR: Can you go through that again?

Dr Bruniges : Data from the Report on Government Services show that over the last 10 years Commonwealth recurrent funding per student for all schools—

CHAIR: Is that the 2016 report?

Dr Bruniges : That is correct, 2016. Recurrent funding per student for all schools has increased in real terms by 36.7 per cent while state and territory recurrent funding per student increased by just 4.6 per cent. Australia wide, the public school system receives 82 per cent of its funding from states and territories and 18 per cent from the Commonwealth. This is often misrepresented as the Commonwealth inadequately funding public schools. It should be noted that the proportion from the Commonwealth has been increasing over time.

The government has been clear that it will work with states and territories to deliver stable and sustainable funding into the future for all Australians schools. At the most recent COAG meeting, it was noted that the Commonwealth's contribution to school education is funded through to the end of 2017 and it was agreed that discussions on new funding arrangements should be concluded early in 2017.

I understand the committee is interested in the effect of reduced Commonwealth funding for state and territory provided schools, particularly the policy announced in the 2014-15 budget. Firstly, it should be noted that Australian government funding for the government school sector will continue to increase each year from 2018. Despite total Commonwealth spending on schools across Australia continuing to increase each year, we know that funding alone is not sufficient to achieve quality outcomes. In Australia teacher related expenses contributed to 60 per cent of the increase to the average government school recurrent costs between 2001 and 2011, mainly due to wage growth and falls in student-teacher ratios. Teacher quality, school autonomy, parental engagement and rigorous curriculum are just as important as money to make a real difference to student outcomes, and the Commonwealth is working with states and territories to focus on those four key areas. Initiatives in this area are not impacted by indicative changes to policy for recurrent funding arrangements.

The OECD notes that for the countries with high GDPs there is no relationship between expenditure and performance and that it matters more how resources are spent than how much is spent. Evidence suggests that there are limited educational benefits to reducing class sizes and that teacher wage growth has not led to improvements in the quality of teaching. The Report on Government Services 2016 states that for school education, nationally, in 2014 the student-teacher ratio for government primary schools was 15.4 and for non-government primary schools it was higher at 16.2. For all primary schools, the student-teacher ratio was 15.6, and for all secondary schools the student-teacher ratio was 12.1.

On science, technology, engineering and mathematics—or STEM—in December 2015 all education ministers endorsed the national STEM school strategy, a comprehensive plan for science, technology, engineering and maths education in Australia. The strategy builds on a range of reforms and activities already underway and aims to better coordinate and target this effort and sharpen the focus on key areas, where collaborative action will lead to delivering improvements in stem education. Under the national innovation and science agenda announced on 7 December 2015, the government has committed $112 million to inspire all Australians in digital literacy STEM.

With regard to regional and rural and remote, under the SRS funding arrangements, loadings for school size and location target funding to schools in regional and remote Australia. Based on My School 2014 data, the department's analysis shows that in 2014 average Australian government funding for very remote students was almost double the average Australian government funding for metropolitan students. It indicated that from 2013-14 Australian government funding per student increased at a greater rate in remote areas and, as with other Australian government funding, whether schools receive this is a matter for state and territory governments.

In summary, total Commonwealth recurrent funding to government schools across Australia, including from 2018, continues to grow each year. The government has committed to consulting with states and territories and the non-government sector before the next school funding period on the development of school funding arrangements from 2018 and seeks to use its funding role to maximise educational outcomes and quality at a national level. COAG has agreed that discussions on new funding arrangements should be concluded by early 2017.

CHAIR: Thank you for that opening statement, Dr Bruniges. I do not believe the department has yet made a submission to that effect to the inquiry. We do understand there is a lot is going on at the moment.

Senator O'NEILL: First of all, congratulations, Dr Bruniges, on your appointment to the role. You are at a particularly interesting point, historically, coming from the state of New South Wales, where Minister Piccoli has been a great champion of the Gonski funding. Now that you have come into a new context, you would be able to bring some interesting perspectives. Can I just take you back to comments that you made about the capacity and interest in the federal government funding government schooling. Historically there have been policy rationales that have informed government funding of schools. Why have federal governments of a range of persuasions progressively taken more responsibility for school education since the early 1970s?

Dr Bruniges : I think if you look historically, through history there have been a range of collaborative partnerships between states and territories and the federal government, which has led to a number of differing funding agreements or ways in which funding has arisen. That will be a matter for policy at the time.

Senator O'NEILL: You have been in the education field for some time now. What are the policy reasons, to the best of your knowledge, for why the federal government, over the period of time since the 1970s in particular, has increased funding for government schools nationally?

Dr Bruniges : I think I would be speculating on that. I am not privy to the policy debates that would have happened since the 1970s. It is clear on written records where we have had negotiations done on funding there would have been a variety of reasons in different policy settings. I am sorry that I am not very clear on the nature of the questions that you are trying to ask.

Senator O'NEILL: Perhaps on notice I will give you the opportunity to do some research on the historical trends of why the federal government has been committing additional funding to the states since 1970, which is quite some time. I think we have seen that happening incrementally not because of overly generous federal governments but because of clear need.

CHAIR: Dr Bruniges, in your opening statement you went through some remarks, and I think you pointed out that, in the past 10 years, federal government funding in real terms—I think your figure was 36.7 per cent. I guess the question we are asking is why.

Mr Cook : Public servants work for the government of the day. Government policy is a decision of the government.

CHAIR: You can explain government policy. You are the department of education.

Mr Cook : You are seeking an opinion. In terms of an opinion, I cannot give one.

CHAIR: No—

Mr Cook : You are asking what our opinion is as to why these governments have done this.

CHAIR: I am asking what reason was provided for the increase in funding.

Mr Cook : In terms of government policy?

Senator O'NEILL: Yes.

Mr Cook : We are happy to take on notice the government policies of the day, over the various successive governments, on both sides, as to why they actually made that decision to increase. I am sure that is in policy documents, which would be, I am assuming, election platform documents and things like that.

Senator O'NEILL: That is exactly the question: what was the rationale. Clearly that historical trend is there.

CHAIR: Just taking a step back from the figure that was already presented to us.

Mr Cook : I am happy to take that on notice. That is not a problem.

Senator O'NEILL: If I could go to more recent matters, Dr Bruniges, last week the Prime Minister announced a plan to abandon responsibility for funding public schools. Was the department involved in preparing for this policy announcement from the Prime Minister last week?

Dr Bruniges : I cannot answer that. I was in the Department of Education in New South Wales at that point.

Senator O'NEILL: I might have some questions about that as well, but Mr Cook might be able to answer for the federal department of education. Were you involved in preparing for the policy announcement that was made by the Prime Minister last week?

Mr Cook : As you know, we provide advice all the time. In terms of actual advice to the Prime Minister, that would be a matter for the Prime Minister and Cabinet and not for this department. We advise our minister. Whether or not our minister has provided advice to the Prime Minister, I do not know. This department does not actually provide briefing advice to prime ministers. That is what Prime Minister and Cabinet would do.

Senator O'NEILL: Did you provide advice to the minister for education around the policy announcement that was made by the Prime Minister last week?

Mr Cook : I am not sure that it was a policy announcement. I think Minister Birmingham was very clear in a statement he made publicly about the fact that we have continued involvement in state education and state government schools.

Senator O'NEILL: I am sure that is the case. What I am trying to establish is the department's involvement or otherwise in providing advice that informed the Prime Minister's announcement last week. You have pointed out that you did not advise the Prime Minister, because you advise the minister.

Mr Cook : We advise the minister on policy advice.

Senator O'NEILL: Did you advise the minister last week with regard to the announcements that were made or did you advise him in preceding weeks about the announcement that was made last week? Have you been part of the decision-making that has flown through to the Prime Minister's office?

Mr Cook : All I can say to you is that we provide advice to the minister on a range of things: the role of government and the role of the federal government in terms of education broadly. I do not know where that advice went after it had gone to the minister. I have no knowledge whether that advice was then used to inform any other statements.

CHAIR: I have a follow on from that. We may as well—

Mr Cook : I am not trying to be tricky; I am just saying that we provide advice. What happens with that advice, we are not part of that picture.

CHAIR: No, that is not what I mean. There is no point pussy-footing around it. The Prime Minister made two separate announcements regarding—call it what you will. The Prime Minister put forward two different positions, one on the 30th of last month and one on the 31st. On the 30th of last month, in Penrith in Western Sydney, the Prime Minister outlined a view towards states as it relates to taxation. We are going to have Treasury and others here later today. It was not specifically around the area of education per se, but, of course, there are consequences for education in doing that. The next day, on the 31st, the Prime Minister more specifically related those comments back to—I am not going to quote his words here—something to the effect of raising the possibility of states taking full responsibility for education funding. I guess the question I think is being asked, and I think it is a fair question, is: prior to the 30th or the 31st, was advice provided? What was the department's involvement in that statement?

Mr Cook : Again, I am not trying to be difficult. I am saying that, in terms of advice to the minister, we provide advice about funding in schools, about the roles and relationships, and about what the role of the Commonwealth is and what the role of the states and territories is. I do not know where that advice went beyond that. We provide the advice to our minister. Your question to me is what the department did in terms of the Prime Minister. I am saying to you that we provide advice to the minister. Whether the advice goes further is a matter for the minister.

CHAIR: Effectively, you did not provide advice to the Prime Minister and Cabinet about this?

Mr Cook : We did not provide advice to Prime Minister and Cabinet about these issues, no.

Senator O'NEILL: Did you provide advice to Minister Birmingham that would indicate that you have been doing work about handing funding responsibilities completely over to the states for government schools? Have you done any work around that or given advice around that?

Mr Cook : We provide advice on a range of issues. The nature of that advice is not something that we would provide comment on in Senate inquiries, as is the normal practice. In terms of Minister Birmingham's statement, it is very clear: '… the government is not abandoning school or public education and has never proposed to doing so.' The minister made that statement publicly on 6 April.

CHAIR: Sorry, the Prime Minister—let us not get you the Prime Minister statements.

Mr Cook : In terms of the Prime Minister, that is Prime Minister and Cabinet. We work with the minister, not the Prime Minister.

Senator O'NEILL: Australians are trying to figure out which one is telling the truth.

CHAIR: You are here talking about the minister. The minister's statements relate directly to what the Prime Minister has said.

Mr Cook : These statements are on record. They are public statements.

CHAIR: Can you read that quote again?

Mr Cook : It says, 'The Turnbull Government is not abandoning schools or public education and has never proposed doing so.' It was from 6 April.

CHAIR: So we can have a debate about whether abandoning means not funding or what that means. Effectively what you are trying to say is that is the policy?

Mr Cook : It goes on, 'We are putting a record $69.4 billion into schools,' so I do not think that is abandoning them.

CHAIR: You are aware that the Prime Minister on the 31st of the last month made comments regarding the funding of education and whether or not it should be state or federal responsibilities. Is that correct?

Mr Cook : I am aware of statements, but I do not have in front of me the actual direct detailed quote of that date, no.

CHAIR: The consequences of that kind of a policy shift, were it to happen, would obviously be beyond simple funding. There would be other considerations and other policy considerations as a result of that, if that were to happen, correct?

Mr Cook : In terms of the past, I think the work that was done originally, which was done by Prime Minister and Cabinet and which was made public, was the draft green paper, where it looked at a range of options in relation to the relationship between the Commonwealth and the states. My comment is that material has been done in the past by Prime Minister and Cabinet around this particular point.

CHAIR: So you are effectively saying that these were not matters for the department; these were matters for PM&C?

Mr Cook : Effectively, in terms of the Prime Minister and the Prime Minister's comments—as they would normally be.

CHAIR: So they were not your comments, they were not prepared by you and they were not done by you. We have Prime Minister and Cabinet here later in the afternoon. What you are effectively telling us is that it is a matter for them.

Mr Cook : I would think so, yes.

CHAIR: Obviously, you were not providing advice to PM&C on this.

Mr Cook : On the statement by the Prime Minister?

CHAIR: On the general policy proposal that was put forward. You are saying it is a matter for PM&C.

Mr Cook : I will go back to what I said a minute ago, which is that 12 months or so ago, in terms of the notion of the green paper, the states, territories and us—we were involved in that process as well—looked at a range of options in terms of federation and sharing. One of those options which I think was public was the notion about whether states should actually take over all schools. Twelve months or so ago we were part of a process—as were states and territories—that looked at all possible options. In fact, I remember being part of a workshop in Sydney, I think it was, of all states and territories and Prime Minister and Cabinet where we explored four options. One of those was state governments being actually responsible for all schools. Another one was state governments being responsible for just government schools. This was part of a process, and that document is public and available online.

CHAIR: But, Mr Cook, that proposal did not include in it how the funding arrangement would work. The proposal I understand you were debating or looking at at the time was whether it would be the states themselves and how the grants system was going to work. It was not a proposal on the taxation at that point in time.

Mr Cook : In terms of taxation we certainly are not part of that process. We certainly do not provide advice on anything in relation to taxation arrangements and things like that. It would be Treasury or Finance, I would imagine.

CHAIR: Obviously, we have Treasury and others coming today. You are telling us that these were matters for PM&C, and we will ask PM&C that. From time to time, though, the department of education does provide advice to other departments like the Department of Prime Minister and Cabinet.

Mr Cook : We meet with them, we talk with them and we ring them on the phone. Absolutely.

CHAIR: But you are saying that the matters relating to the 30th are matters for them.

Mr Cook : That is correct.

Senator O'NEILL: So was the department advised of the Prime Minister's announcement before it was made?

Mr Cook : I am not aware that we were, but we would not normally be made aware of Prime Minister announcements.

Senator O'NEILL: So when did the department find out about the comments that were made by the Prime Minister on the 31st with regard to education funding for the country?

Mr Cook : It would have been on the day.

Senator O'NEILL: You found out on the day?

Mr Cook : I would imagine, but I am happy to take that on notice.

Senator O'NEILL: Can you provide us with any notification or documentation of advice if you received it prior to that. Other than that, we will assume that you found out when the newspapers broke the story.

Mr Cook : Sure. We can take that on notice.

CHAIR: Just to clarify that—I just want to be very clear—what you are saying is that you, personally, as acting secretary found out on the day. Whether there was someone within your department at a different level who knew, you will check.

Mr Cook : Sure. It could have been any of my staff. It could have been the school staff and things like that.

CHAIR: But you personally found out on the day.

Mr Cook : That is my recollection, yes.

Senator O'NEILL: Mr Pattie, you are here in your role as the group manager of the schooling group. Could you inform us if you were informed?

Mr Pattie : I will have to take that on notice as well, Senator. We have officer-level conversations all the time. We will just have to take that on notice as well.

Senator O'NEILL: Were you personally advised?

Mr Pattie : I was not, no. I can take it on notice.

Senator O'NEILL: Could you just explain your role, Mr Pattie?

Mr Pattie : I look after the schooling group in the department. That includes curriculum, students with disability, schools funding and schools assurance.

Senator O'NEILL: So you are pretty critical in the middle of this announcement from the Prime Minister, but you were not advised personally.

Mr Pattie : I am not sure 'critical' is the right word, Senator.

Mr Cook : Mr Pattie does a very good job of looking after funding for schools. The announcements by the Prime Minister are a matter for the Prime Minister.

Senator O'NEILL: You mentioned in your evidence this morning, Mr Cook, that the department has been providing and preparing policy options. When did that work commence? You talked about a range of policy options around federation and potential changes to the funding of education.

Mr Cook : We are part of the whole-of-government approach and, I guess, part of the COAG process. First ministers departments and education departments, under the previous Prime Minister, were doing some work around the federation process which I think led to the draft green paper which is on the website at the moment. When did we start doing that? It would have been 12 months or so ago or more.

Senator O'NEILL: So under Mr Abbott you said there were a few major positions.

Mr Cook : I think there were four.

Senator O'NEILL: One of those was that the states would become completely responsible for schooling and that the federal government would walk away. Is that one of the policy options that you prepared?

Mr Cook : We did not prepare it; it was a joint group of states, territories and federal government officials. We did not lead this. Again, this was led by Prime Minister and Cabinet. I was in meetings with state education department officials and state premier department officials. Together this work was done. It was not something that was then a Commonwealth-owned piece of work; it is actually owned by all states and territories.

Senator O'NEILL: Would you be able to characterise the nature of those interactions?

Mr Cook : They were very collegial. I was part of a workshop which asked: what are the strengths and what are the weaknesses of each of these four proposals? And they were similarly done around preschool, health and I think there were other areas.

Senator O'NEILL: You may have been aware before the rest of the country, but I think the furore since the Prime Minister's announcement indicates that the community are not very excited at the thought of the federal government walking away from funding government schools.

Mr Cook : Again, just to clarify: this information has been public—in fact I think we referred to it in Senate estimates quite a while ago—and it has been public for quite a long time in terms of those options.

Senator O'NEILL: It just got a lot more public on 31 March, Mr Cook.

Mr Cook : I am just commenting on—you said I might have been the first to be aware of it; I certainly was not. The information is public: it has been public and part of conversations and work that has been led by states and territories as much as by the Commonwealth. In fact in relation to schooling, I think—and Prime Minister and Cabinet can assist again—it was Queensland and the ACT that actually led the writing of the paper in relation to school education, not the Commonwealth.

Senator O'NEILL: Could I ask if the department did any modelling on the impact of the proposal for the federal government to walk away from funding schooling?

Mr Cook : I am happy to take it on notice. I think my answer is: the modelling we are doing is on the current act. The current act is the current act so that is what our modelling is always based on.

Senator O'NEILL: So there has been no modelling—

Mr Cook : I said I would take it on notice, Senator.

Senator O'NEILL: To the best of your knowledge, at this stage you would not be aware of any modelling to—

Mr Cook : Whether they have done any in Prime Minister Cabinet, Treasury or Finance, I am not sure but—

Senator O'NEILL: But certainly none has been done in your department.

Mr Cook : Not that I am aware of but I am happy to take it on notice.

Senator O'NEILL: Not that you are aware of.

CHAIR: I have a follow-up question on that, Mr Cook—that is a really interesting question. In terms of modelling—I have dealt a lot with the Treasurer portfolio so, obviously, they do their own kind of modelling—what kind of modelling do you normally do? Or do you not model—do you outsource the modelling functions?

Mr Cook : Our modelling team is basically the modelling about how much money under the Australian Education Act flows to schools. The model actually turns out to be the cheques that we send. In terms of Queensland, for example, or New South Wales, we have a model which generates how much money each school would get based on the act, based on the loadings et cetera. That then is the cheque which is handed over to the New South Wales government; similarly, for the Catholic system and similarly for the stand-alone independent schools as well.

CHAIR: You only model on the act; you don't model on the options. You don't model outside the act—is that what you are saying, Mr Cook? When you are looking at policy proposals, you said before that you give policy proposals all the time to government and you are always talking. You obviously model them.

Mr Cook : That is right, yes. We model a whole range of different things, depending on what the government of the day requests of us, but our main role is actually to fund schools in terms of that area and that is what we do in relation to that.

CHAIR: The question then becomes: if you model a whole range of things that are completely reasonable; if you said earlier one of the options that you have explored, through a joint process or however you want to do it, was not funding schools so you modelled the consequences of doing that as well then?

Mr Cook : Not funding schools—

CHAIR: For the federal government not to be funding government schools.

Mr Cook : We would not have to model, because we actually know how much money already through the current act the federal government gives schools, so I am not aware of any scenario where it says that—

CHAIR: It says you look at the PBS and you just take that figure out.

Mr Cook : That is right.

CHAIR: There are other consequences of doing that.

Mr Cook : I am just saying that I am not aware of any scenario which says that money would not go to schools.

CHAIR: You said yourself that one of the four models you are looking at was—

Mr Cook : But that did not mean that money would not go to schools. There might be a transfer of funding from Commonwealth to states through some process, whether that is through taxation or whatever it might be. However, I am not aware of any proposal anywhere that I have ever seen which says the Commonwealth amount of, whatever it is, $16 billion and of that amount—I am not sure; maybe it is $5 billion or $8 billion—$5 billion goes to government schools. I am not aware of any proposal which says that $5 billion would not go to government schools. It may be through a different process, whether it is through taxation arrangements or whatever, but I have never seen or been asked to do a proposal which says: the Commonwealth will simply cut that $5 billion out of government schools.

CHAIR: So what exactly were these four proposals? You are saying that one of the four options you were looking at in this paper a year ago was the federal government not be involved in the direct funding of schools—

Mr Cook : That may mean a range of things—it may mean it is an untied grant, for example—but the amount of money—

CHAIR: You do the work; you tell us what it means.

Mr Cook : It could mean that.

CHAIR: You do the work, not us.

Mr Cook : But the options did not go into that detail, Senator, because this is what the green paper was for—it was for further discussion. It is not 'This is the formal proposal; it is 'Let's talk about these things.'

CHAIR: You never modelled it?

Mr Cook : No. We do not have to model that, because we know exactly what it is. As you said: it is in the budget papers.

CHAIR: Yes, but then there would be follow-on consequences from doing that—hypothetically, right?

Mr Cook : The consequence is simply the process for how the money that the Commonwealth might have sent out itself is then allocated to states.

CHAIR: No—again, you are saying you did not look at this. What would be the policy consequences and follow-on from doing that? If your department, for instance, suddenly is not responsible for the direct funding—it is going through a different process—then that would have consequences on a department, that could arguably have consequences on agreements, that would have consequences on a whole range of different measures and matters and curriculum. There are lots of agreements tied into different agreements. You yourself have described before that there is a complex web of engagement between state and federal governments on education. Those types of policy proposals have follow-on consequences. Are you saying you were not at a stage of looking at them yet?

Mr Cook : No. Let me clarify: I was talking about funding only. Again, if I go back to this group, which is made up of states and territories and the federal government and Treasury, Prime Minister and Cabinet, for each of the proposals in each of the areas of health and education part of the workshop was: what are the consequences?—I think I mentioned this earlier—What are the pros and cons of these things? I think that is actually part of the draft paper that is on the Federation website. I am happy to correct myself, but I am pretty sure that, if you read the draft paper that is on the Federation website, then you will find it talks about the pros and cons. In fact, I think I saw some of that quoted in the press this week. I think you will find it in that paper.

Senator GALLAGHER: I hear what you are saying—that the green paper did outline some different options and that, at a very high level, it runs through pros and cons. In a sense, that appeared to me to be more of an early brainstorming session on what this might look like if this happened under different scenarios. It is a bit of a leap, though, to go from an issue flagged in a green paper to having a Prime Minister come out two days before COAG and actually say, 'This is something that the Commonwealth is seriously considering.' I am not asking you to comment on the Prime Minister's statement but, from the Department of Education's point of view, I would presume that there had been quite a bit of work done within the department looking at those four options—developing them up not from a financing point of view but from an educational point of view.

That is, with this particular option of the Commonwealth handing over funding responsibility to the states and territories—not looking at the funding issue—what would that mean from an educational perspective? What would it mean in terms of the Commonwealth influence over national standards, national curriculum, teacher quality? I would imagine the Commonwealth would be interested in what impact that would have on states' and territories' ability to run government schools and what their relationship would be with private schools. Has Education looked at those types of implications, and where is that at? What did that find, and what advice was provided around that either to states and territories or to other education stakeholders?

Mr Cook : Yes, we were part of that work but, again, this was the work that was done 12 months ago. This was work that was done through a series of workshops led by Prime Minister and Cabinet. We looked at things like if, for example, the Commonwealth did not have an education department, would we still expect states and territories to be involved in the National Assessment Plan for Literacy and Numeracy—NAPLAN, the national curriculum, My School? Those things were all unpacked and explored and, again, I do not want to sound like a broken record but I am fairly sure that, at least at a high level, those things are discussed in that paper which is available on the Federation website.

Senator GALLAGHER: So, in a nutshell, what you are saying is that that work was done 12 months ago? The Federation process kind of stalled at the change of Prime Minister from what I can see, because subsequent pieces of work that were going to be delivered under that framework have not been. Then there is policy void from within the department and then an announcement by the Prime Minister that this is a serious option.

Mr Cook : We did our original piece of work; the work the department has been doing since has been around the continuation of providing funding to schools. I cannot comment on what has happened with the Prime Minister and the Prime Minister's office in relation to the announcement last week.

Senator GALLAGHER: On a purely educational basis, that option of essentially handing responsibility to the states and territories for government school matters was not being actively pursued within the education department?

Mr Cook : I am happy to take it on notice. I am not aware of any further advice we provided on that matter.

Senator GALLAGHER: By all means take it on notice, but you were the acting secretary, so presumably—

Mr Cook : I was acting secretary from February this year.

Senator GALLAGHER: Okay. But you are a senior guy within the department, right? You are going to know what is going on. I am happy for you to take it on notice, but surely if you were developing up an option that, from an educational point of view, really did change the way that education policy was being handled in this country for many, many years, you would know about it, right?

Mr Cook : We have not been involved in further meetings with the central agencies of the states and territories—

Senator GALLAGHER: From the green paper process.

Mr Cook : around the issue from the green paper process. That is correct.

CHAIR: When did that green paper process end?

Mr Cook : Senator, I am sorry—

CHAIR: About a year ago?

Mr Cook : Yes, it might have been June last year. Again, Prime and Cabinet will be able to help you because they will lead the process.

Senator O'NEILL: It sounds like it came out of the blue for you as much as it did for the rest of the Australian population that the federal government might walk away from funding government schools?

Mr Cook : In terms of walking away from funding, I think my minister has been quite clear that is not the intent and never was.

Senator O'NEILL: He is clearly in disagreement with his Prime Minister. Could I go to your interactions with the states around this end.

Mr Cook : Sure.

Senator O'NEILL: Given that you told us this morning that you did not have any notification of the Prime Minister's announcement prior to his making it—I think it would be probably surprising if you did any of these things—did the department communicate with the state departments about the Prime Minister's statement prior to the announcement on 31st?

Mr Cook : We would not have been involved. In terms of the COAG process—I guess leading up to COAG—again, that would be Prime Minister and Cabinet and first ministers rather than line departments.

Senator O'NEILL: In terms of your briefing of Prime Minister and Cabinet in preparation for COAG?

Mr Cook : We would not normally brief Prime Minister and Cabinet for COAG.

Senator O'NEILL: Did you in any way support them in their preparation for COAG?

Mr Cook : I am sure staff would have had phone calls or there might have been meetings. We talk to Prime Minister and Cabinet a lot.

Senator O'NEILL: But not about the withdrawal of funding from government schools, it would seem.

Mr Cook : What COAG discussed was the fact that there would be resolution of funding by the start of next year, not that there would be withdrawal of funding or things like that.

Senator GALLAGHER: In the coordination process of COAG, it is not unusual for PM&C when it is pursuing an option—even if it is not being upfront with line agencies about what that option is—to seek information from line agencies about potential implications of major policy shifts. From an education point of view, changing the way the Commonwealth engages in public schooling potentially has some pretty major impacts on, say, Closing the Gap targets, provision of education to students with a disability, rural and remote students, national testing, implementation of the national curriculum. Aside from the dollars, there are a whole range of criteria where there are potential educational consequences. In the lead-up to COAG, was the department asked to provide any information in the areas that I have just outlined and if the Commonwealth removed itself from leverage in education policy for government schools what consequences that would have on those students and those national processes that are in place?

Mr Cook : Sure. I am just not aware that COAG actually even had those discussions. We did not provide advice, because I am not aware that COAG was having those discussions. The COAG discussion was about schools funding. Where COAG landed was the Commonwealth's role in relation to schools funding, and it was agreed that would be settled by early 2017. We did not provide advice because I do not think it was a topic that was discussed at COAG is all I am saying.

Senator GALLAGHER: Fair enough, but in terms of the lead-up to COAG, there was quite a bit of discussion floated around the Commonwealth removing itself from funding government schools. It was floated by the head of executive government as a topic to discuss with state and territory leaders. In terms of your interests, as an education department, and good decision making, one would have presumed that if that discussion was going to be floated over dinner you would have wanted the Prime Minister to be briefed about what the potential implications of that would be. By all means, let him go and make that decision, but surely if he were going to have no influence in ensuring closing the gap targets are pursued in government schooling, the Department of Education would be the one to tell him that. So I am just trying to understand whether it is Education's responsibility to brief up that information? Would it be something like: 'Prime Minister, if you are going to pursue this'—and it was openly known that that was being flagged, because it was very public—'these are some of the potential consequences of that approach.' Is it Education's job to do that?

Mr Cook : No. Prime Minister and Cabinet brief up the Prime Minister, not the education department. We may be involved in meetings with Prime Minister and Cabinet to help them inform—

Senator GALLAGHER: You do not brief PM&C?

Mr Cook : We do not formally brief them, no.

Senator GALLAGHER: Do you forward information to them?

Mr Cook : We might have meetings with them. We might have phone calls with them. They will ask us to check facts and figures around bits and pieces all over the place, as they always do, which is part of our normal process. But in terms of formally briefing the Prime Minister, no, it would not be the role of the education department.

CHAIR: That surprises me. You explained to me how it all fits in together. What Senator Gallagher seems to be asking is: we have established everything up until the 30th and 31st, the two days in which the Prime Minister floated an idea, with a view towards discussing it with state premiers and territory leaders. He floated an idea quite publicly and said, 'This is something we want to discuss.' It was obviously around the funding arrangements between state and Commonwealth, but one big, important part of that funding arrangement was around education. That was a significant part of it. You have said yourself, Mr Cook, you found out about it when the Prime Minister made these comments on the 31st. You, obviously, see these comments on the 31st. You know there is COAG coming on Friday. It sounds like you are saying that, hang on, there is another complete silo called PM&C. If PM&C are going to be developing education policy options for the country, they would have to come to you, would they? You are the experts in education policy. That is your entire role.

Mr Cook : It is the decision of Prime Minister and Cabinet as to whether they come to us. They have a social policy area that has expertise and knowledge in education and schooling. But, as I said, we meet with them, we talk to them, we assist them with those things all the time.

CHAIR: To your knowledge, you personally, as acting head of the department, were not involved in any briefings or discussions around these matters with PM&C.

Mr Cook : In terms of the lead-up to COAG, as is the normal process, there are cabinet processes and cabinet papers that are developed. The detail of that is a matter of cabinet process, which is the common practice. In terms of the government's position in relation to COAG, they are cabinet processes and cabinet papers in relation to the position that the Prime Minister may take, so my comment to you would be: that is a cabinet process, and I cannot comment on a cabinet process in relation to the Prime Minister's position at COAG.

Senator O'NEILL: There was a report in the Sunday Mail in South Australia on 3 April that indicated that the proposal to give all the responsibility to state schools had actually been considered by cabinet. Can you shed any light on that? Is that correct?

Mr Cook : It is cabinet process. I am sorry, I cannot help you on that.

Senator O'NEILL: Did you have any input into preparing papers for cabinet discussion?

Mr Cook : Not that I am aware of. It is a cabinet process, similarly.

CHAIR: We are not asking what the content was. We are saying: did you prepare any material for that?

Mr Cook : Sure, and similar to what Minister Birmingham, I think, said at the last estimates process: as far as we are concerned, a cabinet process includes things like whether you, in fact, developed materials.

Senator O'NEILL: You are not going to answer that question.

CHAIR: Was anything prepared outside cabinet process?

Mr Cook : About COAG?

CHAIR: About COAG.

Mr Cook : Not that I am aware of. It would be part of a cabinet process or papers that would lead into a cabinet paper.

Senator O'NEILL: The minister did not take a submission to cabinet around this?

Mr Cook : I am not prepared to comment about whether ministers take things to cabinet or not.

Senator GALLAGHER: Going back to the question I asked around the potential implications of a removal of funding relationship to government schools and its educational implications, the way I understood your evidence earlier was that the department had not developed information about the educational implications of pursuing a particular option outlined in the green paper. Is that correct?

Mr Cook : The work done by the department was the work that informed the green paper 12 months ago.

Senator GALLAGHER: You had not done anything since then on pursuing that option of removing funding from government schools.

Mr Cook : That is my knowledge. As I said, in terms of the Prime Minister's position for cabinet, that is part of the cabinet process.

Senator GALLAGHER: I am not asking the content of the information provided but whether education was involved in providing information that would have been prepared for cabinet's consideration.

Mr Cook : Education is often involved in material that is prepared for cabinet processes. We were involved in discussions with Prime Minister and Cabinet. Whether they, then, chose that to put to the cabinet was a matter for them.

Senator GALLAGHER: Within federal education, how many staff work in the government-schooling section? I am not sure how you structure your department.

Mr Cook : We do not have a government-schooling section. Off the top of my head, in terms of FTE, the number of staff I have, in total, who work in the schooling and pre-schooling area, is about 280. The majority of those probably work on non-governments, to some degree. In terms of funding, because we have over 900 individual non-government schools as opposed to one cheque for all government schools in New South Wales, for example, a lot of the work focuses on the non-government sector, and the majority of our funding goes to the non-government sector. I am happy to take that on notice if you want the exact number.

Senator GALLAGHER: No, it is just out of interest. And how many teachers do you employ?

Mr Cook : Teachers? I am a teacher.

Senator GALLAGHER: Yes, people who hold a teaching qualification.

Mr Cook : There are two here. I am a qualified, registered teacher. I would have to take that on notice. I do not even know whether we have that information on our records, as to whether they are a teacher or not.

Senator GALLAGHER: But it is full of teachers.

Mr Cook : Not necessarily. Our data analysts would probably not be teachers, because we want them to be data analysts.

Senator GALLAGHER: Yes, but a lot of your policy people.

Mr Cook : Some of our people would be teachers.

Senator GALLAGHER: If it is easy. I do not want people wasting time on it.

Mr Cook : Sure.

Senator GALLAGHER: Dr Bruniges, in your opening address, you referred to the fact that the Commonwealth, in 2014-17, had agreed to make funding decisions in line with the National Education Reform Agreement, even for those that had not signed bilaterals or the other agreements. Is that correct.

Dr Bruniges : Yes, from 2014-17. That includes—

Senator GALLAGHER: From the department's point of view, what is the National Education Reform Agreement? You are making your funding allocations based on it. What about following other parts of NERA?

Dr Bruniges : I might ask Mr Cook, because they all vary, slightly, across the states and territories.

Mr Cook : Under the act, with the National Education Reform Agreement, the obligations only apply to three states, at the moment, because only those three states—and territory, sorry—have a bilateral agreement. Under the act, to be called 'participating', under the full National Education Reform Agreement, you need to have signed the National Education Reform Agreement and bilateral agreements. The funding is flowing, in relation to that, for all states, as you are aware. Are you talking about the reform aspects of it?

Senator GALLAGHER: I am talking about all aspects of it, how you apply it—if people are getting funding under the NERA but are not having to follow the requirements outlined in NERA. Is that right? For those who have not signed agreements—

Mr Cook : That is right. Only three states and a territory, does that apply to, and those are required to provide information to the Commonwealth, annually, as to how that funding has been allocated to the schools in their state.

Senator GALLAGHER: In the schedules, where it outlines a list of reviews to be undertaken and things like that, how do you approach that?

Mr Cook : Some of those reviews have been undertaken. The review into the loadings around low SES and, I think, English language proficiency have been undertaken. The work that is happening around students with disability is being undertaken. The only reviews that have not occurred are the review of the agreement itself, because not everyone has signed the agreement, and the indexation review. The former minister for education wrote to all state and territory ministers about that the year before last I think and commented about the indexation review.

Senator O'NEILL: Could I just clarify the department's role in communicating with the state departments around the Prime Minister's announcement on the 31st. You did not communicate with them before the announcement because you were not aware, but since then have you been in contact with the states following on from the Prime Minister's announcement?

Mr Cook : No.

Senator O'NEILL: Not at all?

Mr Cook : No.

Senator O'NEILL: COAG is still investigating the option of pushing responsibility for certain services down to the states through income tax grant swaps with different funding arrangements. Would schools be one of the grant programs that could potentially be untied and handed to the states to manage on their own, under this scenario?

Mr Cook : I am sorry, Senator. Are you after an opinion? The Finance and Treasury people are more into the taxation space than we are, I am sorry. We are not part of this process.

Senator O'NEILL: Are you doing any work with regard to that matter, Mr Pattie?

Mr Pattie : We are not.

Senator O'NEILL: So anything that is being considered in terms of the impact on the states with regard to school funding for which you are responsible is not being actively considered within the department?

Mr Cook : The work we are doing is the work that COAG has asked us to do, which is about finalising funding arrangements early in 2017.

Senator O'NEILL: Mr Pattie, there were a number of ideas floated at COAG. On this idea that states could manage on their own you are not working up any funding scenarios for the federal government?

Mr Pattie : No.

Mr Cook : I think COAG said that that was not to happen. I think that is actually in the COAG communique.

CHAIR: Mr Cook, I am a bit confused. I just want to be clear. You are saying that up until the 30th and the 31st—we will take them as one day; it was over two days—you had not had any conversations or provided advice to PM&C? We will talk to PM&C this afternoon. It is a matter for them. Between then and COAG you also had not provided any advice or had any discussions that you are aware of with PM&C?

Mr Cook : No, what I said, Senator—just to clarify the record—was discussions may occur which would inform a government position in relation to COAG. Those matters are in the context of cabinet discussions which would lead into a cabinet decision. But, in terms of Senator O'Neill's question about the continuation of work after COAG, my understanding and based on the communique of COAG is there was not consensus amongst first ministers to support further consideration of the Prime Minister's proposal that state and territory governments levy income tax on their own behalf.

Senator O'NEILL: Sorry, could you say that again slowly.

Mr Cook : Sorry. This is actually the public COAG communique.

Senator O'NEILL: Yes, but it is important to hear it.

Mr Cook : At the 42nd meeting of COAG in Canberra on 1 April 2016 there was not consensus amongst first ministers to support further consideration of the Prime Minister's proposal that state and territory governments levy income tax on their own behalf. There is no work that we are doing. The work we will do with states and territories over this year will be about the continuation of Commonwealth funding arrangements for schools beyond—

Senator O'NEILL: So we know what is going on with states and territories. My question now is: is there any work being done at a Commonwealth level for advice to either PM&C or your minister about a policy option to absolve the federal government from its funding responsibilities in the states?

Mr Cook : I am not aware, on the basis that we are finalising Commonwealth funding arrangements for 2017, which is the COAG decision. The answer to your question is no.

Senator O'NEILL: So there is no active work going on?

Mr Cook : Certainly not in this department, no.

CHAIR: I just want to check. We will ask PM&C, as obviously this is a matter for them. There are meetings of the cabinet. Whenever the cabinet chooses to meet it is a matter for PM&C, the Prime Minister, the Cabinet Secretary and others. I just want to check: are they regularly held on Mondays or Tuesdays? When are they normally?

Mr Cook : You really are stretching me. Obviously that is for Prime Minister and Cabinet. We are not involved in cabinet scheduling times, meetings and things like that.

CHAIR: You are involved. You have a cabinet minister.

Mr Cook : I think they move around. I think it is either Monday or Tuesday. I am not 100 per cent sure.

CHAIR: Okay. We will ask that of PM&C.

Senator GALLAGHER: In the COAG communique there is a section around some further work that is being done, in particular to:

… reduce the number of tied Commonwealth grants to the states, providing them with greater autonomy and reducing administrative burden;

From what I understand of COAG, that would include looking at grants in relation to education funding. What work has been identified as a follow-up to that section of the communique under 'A more efficient federation for all Australians'?

Mr Cook : Again, that would be for Prime Minister and Cabinet, as those ministers' departments are doing this. Since COAG last Friday, I do not believe we have had a meeting with Prime Minister and Cabinet to talk about progressing the work out of COAG.

Senator GALLAGHER: So you may get that work.

Mr Cook : We may, yes.

Senator GALLAGHER: In the normal process of devolving or delegating work out of COAG, that would happen presumably in the weeks following the COAG meeting. Is that the normal process?

Mr Cook : I would imagine so. I do not know when the date of the next COAG meeting is. I do not think it has been settled yet. Normally, I would imagine, Prime Minister and Cabinet would meet with us in the next few weeks to talk about what work may come out of that.

Senator GALLAGHER: So, from your own point of view, as an expert in reading COAG communiques and presumably being a responsive department, that would be something that you would be preparing for?

Mr Cook : Not at this point—not until we know what the parameters are. This is a public communique. There might be things in minutes which actually talk about particular aspects which we have not seen.

Senator GALLAGHER: For the information of the committee, what could be some of the educational implications of a Commonwealth withdrawal from public school education?

Mr Cook : There is not a Commonwealth withdrawal from school education. Are you after an opinion?

Senator GALLAGHER: I am trying to understand whether any work, aside from funding, has been done by the Department of Education into understanding what the educational implications of a potential withdrawal—as outlined in the green paper—would actually look like.

Mr Cook : I will go back to my earlier reference.

Senator GALLAGHER: I know; you are going to tell me to go and look at the pros and cons under that high level.

Mr Cook : That was when the work was done. That was when we had workshops with states and territories to say, 'What are the implications of each of these options?' from both a state perspective and also from a Commonwealth perspective and the non-government school perspective as well.

Senator GALLAGHER: So, from the high level, that is it?

Mr Cook : It was not high level; it was a day-long workshop.

Senator GALLAGHER: In the history of education policy development, I think that is pretty—

CHAIR: Would you not call a day-long workshop a high-level discussion?

Mr Cook : This was done over several months. I am talking about a particular point in time. This was led by Queensland and the ACT. States led the work, not the Commonwealth, around looking at the issues and the pros and cons for both non-government schooling and—

Senator GALLAGHER: But we do not have the states and territories sitting here, and this is what I am trying to understand.

Mr Cook : I cannot comment on what their lead responsibility was.

Senator GALLAGHER: It just seems very unusual to me that we have an idea floated by our Prime Minister, a serious policy proposal, from all accounts—in front of cameras to the general public—of, 'We are actively considering stopping funding to government schools and are looking at some income tax sharing,' or whatever you want to call it, 'with the states and territories,' and that that did not set off a series of alarm bells in policy departments with responsibility for those areas to go, 'Hang on a minute; we need to be providing some information about what this might look like,' so that whatever discussions are had at COAG are understood before decisions, if they are to be made, are made.

That is what I am struggling with here in terms of what I am being told. Basically, I am being told, 'Yes, there was some work done 12 months ago by the states and territories to explore four options,' and then nothing and then there was an announcement from the Prime Minister that this is something that the Commonwealth seriously wants to pursue. I just do not get how that happens. Even for the professional reputation of the Department of Education and Training, how is there no advice or information being provided to inform good decision making?

Mr Cook : I am sorry; I am just helping with the question.

Senator GALLAGHER: I guess we are just running around in circles, really. You are not in a position to tell us—in light of the Prime Minister's public announcement; it is not a cabinet decision or anything that you are going into—what the Department of Education and Training's response to that was?

Mr Cook : The response from the minister, as I indicated before, is on the public record. It is that the government never proposed to come out of public education or abandon public schools. It never proposed doing so. That is a statement from the minister.

Senator O'NEILL: Which directly contradicts the Prime Minister's comment.

Mr Cook : I cannot comment on that. I am commenting on the statement of the minister. I am not making any comment on the Prime Minister's comments.

Senator O'NEILL: So he is in agreement with his Treasurer and his education minister, by the sounds of things.

Mr Cook : The Commonwealth continues to increase funding to government schools at a higher rate than state governments do.

CHAIR: This is becoming a bit Monty Python-esque. Mr Cook, you are aware that the Prime Minister did outline a proposal—I am calling to proposal; you can call it however you want to structure it—on the 31st. We talking about a week ago now, effectively, or a little bit over a week. He outlined a proposal that the funding arrangements regarding education and the role of the federal government be adjusted.

Mr Cook : That is correct, yes.

CHAIR: And the proposal that was floated, raised, said in a press conference or announced—however you want to say it—was that the proposal should look at the federal government removing its role in directly funding public schools and then alternative arrangements should be made for how those schools would be funded. The proposal from the Prime Minister was that it be dealt with in a different taxation arrangement.

Mr Cook : Yes.

CHAIR: I completely accept the taxation arrangements component. We will be asking Treasury and the Department of Finance, who are here, about it. I think Senator Gallagher and Senator O'Neill's questions about when something as significant as that is said by the Prime Minister. This is not a thought bubble in an op-ed by an academic—which are significant in themselves—but this is a statement by the Prime Minister outlining an entirely new funding arrangement. The question is what work was then done, or what work is being done on that.

Mr Cook : What work was done leading up to that?

CHAIR: On the work that was done leading up to that, you have outlined that quite clearly. There was work done in a process that led to a paper a year ago. Then a year later the Prime Minister made a—I am calling it an announcement; you can call it whatever you want—statement or comment. We have got that bit established, and that is fair enough. For all of those questions, effectively, you have said that they are matters for PM&C. They briefed the Prime Minister, and they will be here later today. But for a week ago—or however many days ago—until now, the question is what work has been done or are you doing work? You do not seem to be giving us a clear answer on whether you are.

Mr Cook : A proposal went to COAG. I clearly outlined that COAG did not accept the proposal, so the work that we will do now and into the future is what COAG did accept, which was the Commonwealth funding arrangements will be settled between now and early 2017.

CHAIR: Our question is: did you do work on the proposal that went to COAG?

Mr Cook : The proposal that went to COAG around taxation sharing? We did not do work around taxation sharing. But in terms of the comment that I made before, the government position in relation to COAG is a part of a cabinet process. As we would normally do in terms of cabinet processes, we do not comment on that or on the type of the paper. That is a matter for government.

CHAIR: That kind of does not pass the believability test. We have been through this many times in Senate estimates and other places in the past. You are saying that you would not have been involved in the arrangements and debate around, effectively, the education envelope or how that is arranged—I am using the word envelope.

Mr Cook : Taxation arrangements, probably.

CHAIR: Taxation arrangements, right. They are matters for Treasurer and that. Mr Cook, what you said before about your department's role in terms of modelling is that you do not work out the pool of money. The pool of money is determined through cabinet processes and other processes. You do your own modelling on how that is allocated under the act or other proposals under the act. These reforms would be the most significant change in education funding arrangements since the 1970s; that is commentary made by others. Whether that is true or not, we can park that. I believe it would be; but that would be a matter of opinion in terms of the scale, so I am not going to ask you that. There is no doubt, as a matter of fact, that that would be a significant change in the funding arrangements as they currently exist. That is a matter of fact, correct?

Mr Cook : The moving to a taxation arrangement, you mean?

CHAIR: Yes.

Mr Cook : Sure.

CHAIR: And that while predominantly the debate was around the funding arrangements, no doubt when you significantly change funding arrangements, there may or may not be other consequences of doing that regarding other arrangements? There may or may not, correct?

Mr Cook : Yes.

CHAIR: And the appropriate thing for the departments to do in an environment would be to determine what the consequences of this policy arrangement are. Is that what you would do in the normal course of events?

Mr Cook : This is what we did 12 months ago. It is in those papers. I do not want to repeat what I have said before, but it was part of the work we were doing with states and territories. We were looking at that range of options. I am not aware of any additional work that we did this year to build upon that work we had done last year, because the situation would not have changed. There is no new policy direction. I think that was part of option two; I am not sure what the terms of that—

CHAIR: Perfect, we will move on. I am going to note that we are already running 15 minutes late. We are going to probably try to get through things quite quickly. Are you able to stay for another 10 or 15 minutes? I do note that we have given you an allocated time.

Mr Cook : Ten would be better, if that is okay.

CHAIR: Yes, I understand. We gave an allocated time that we are running over.

Senator O'NEILL: Dr Bruniges, you would be well aware of the speech that you gave on World Teachers' Day in 2015.

Dr Bruniges : Yes.

Senator O'NEILL: In which you expressed a number of views about the impact of Gonski funding in the role that you formerly held. What was your former role?

Dr Bruniges : My former role which, I previously held, was Secretary of the Department of Education of New South Wales.

Senator O'NEILL: In this role, in this speech, with the oversight you had of the whole of the state of New South Wales, you made some comments:

… the evidence is clear that levels of investment in this country have lagged behind other countries despite data showing that education produces tangible benefits for students and the economy …

         …         …         …

The Resource Allocation Model represents a cultural change in the way schools operate in an environment of transparency, trust and accountability.

         …         …         …

We already know that this money is making a difference to the lives of children and their families. … I have seen funding used to hire extra teachers, instructional leaders, teachers’ aides, Aboriginal mentors, occupational therapists, speech therapists.

         …         …         …

We have been able to do this because of the additional funding delivered through the Gonski agreement.

I think that what you put into that speech accords with exactly what teachers across the state of NSW are telling me every day when I meet and visit with them. Are the six-year Gonski reforms good policy that is leading to better outcomes for students and more support for teachers?

Dr Bruniges : What I can say is that when you look around any state and territory, in terms of individual students and in terms of groups of students, you certainly have case studies of what a difference resource allocation through the allocative mechanism in New South Wales has made for those students.

Senator O'NEILL: When you are talking about resource allocation, you are talking about money that has been used in particular ways in those schools.

Dr Bruniges : I am talking about additional money. The attention should be on how that money is used. It is incredibly important.

Senator O'NEILL: Before going to how the money is used, the way in which the money that was delivered was calculated was based on the Gonski review, which said the money should flow to where the need is, regardless of sector. Is that correct?

Dr Bruniges : That is correct. In New South Wales the resource allocation model was designed to target students of need and with loadings for disabilities, remote and so forth. That is how it is distributed in the New South Wales context.

Senator O'NEILL: Disability—

Dr Bruniges : Disability, Aboriginal and Torres Strait Islander, low SES, ESL, location, size of school. The total RAM in that context is not rolled out in New South Wales yet; there is still a base loading to be rolled out next year. When I think about the anecdotes from schools I have visited, we have seen the use of that money—the difference it has made for individuals and groups of students is well recorded. I guess the challenge across all education systems is how do you scale that—how do you identify what works and how do you distribute those fragments of innovation that you see in individual school sites to a systemic level?

Senator O'NEILL: I agree with you, but that is a different question. That is about how—

Dr Bruniges : That is about pedagogical change.

Senator O'NEILL: but it is not about the funding. We know that the funding which has gone through has gone on in a needs based, sector-blind allocation across the country. In partnership with the New South Wales government it has gone to places where the need was greatest. As you reported in your speech—and teachers are reporting and educational research is reporting—the impact of those investments is changing the learning experiences and outcomes for those students and changing the way teachers can professionally respond to the context in which they are teaching. Do you agree with that?

Dr Bruniges : I think you could identify a number of spaces. As I said, the challenge is that it is not everywhere, and so additional money has gone to every school in terms of resource allocation models. What we are seeing is a differential response in how schools are using that money. The consequences of the impact for student outcomes is not systemised across the system. Otherwise we would see a huge increase in other data, but at the moment we are not seeing that.

Senator O'NEILL: That is because we have had two years of this, and we are at the point of the six-year journey which was anticipated to undertake the sort of change that Australians expect in a rising standard of education. The proposal to deliver the Gonski reforms over six years was what people thought they were voting for at the last election—a unity ticket between Labor and Liberal and matched dollar for dollar. That was the argument that was put. We are at a point now where the change is beginning to be implemented. We can see the changes happening—yes, there might be some differences, but on the whole it is starting to have a positive flow-on effect. Surely, you would be wanting to have years 5 and 6 funding flow through to all those teachers to whom you gave that great speech last year in New South Wales.

Dr Bruniges : We do have to remember that school funding in Australia is at record levels, but outcomes are not. Therefore the question about how to use that funding becomes a really critical issue. I know that in the context—

Senator O'NEILL: Perhaps that is a parallel issue, Dr Bruniges.

Dr Bruniges : I think it is necessary but not sufficient in terms of an argument. You have to have some funding there; you have to be able to look and you have to be able to put the funding in the right place. There is no doubt about that. You are right: for our schools, two years of funding is in place and we are seeing fragments of innovation. Funding, as I said in my opening statement, will continue to increase year on year post-2018. We are not looking at any form of cut; funding will continue to increase. The question for us as educators is to ensure that the funding, which goes in, goes into the right place and into what works and that we target that in the most effective way for teacher professional learning, for students with a disability, for pedagogical practice, for the strategic alignment of action research—all of those things need to be done in the most productive way to ensure that we do get the delivery of better outcomes for all students and not just some.

Senator O'NEILL: Yes, but funding for need is something that is agreed generally.

Dr Bruniges : In funding for need the question is over quantum—

Senator O'NEILL: Sector-blind.

Dr Bruniges : The question is quantum. The allocation of resources based on need can be done irrespective of the quantum that you have.

Senator O'NEILL: The quantum that was agreed with the state of New South Wales was very clear, and the minister continues to argue for the honouring of that agreement for the full six years. Do you agree, whether they are in Whyalla or Milsons Point, every student should have consistent levels of access to educational resources to support their education?

Dr Bruniges : I am not going to comment on a previous minister's statement at all. With all due respect to previous education ministers I have had, I do think in Australian education it is important that we understand the quantum of money we have got and we make sure that we put in case studies where we see systematic explicit literacy practices with those instructional leaders that you mentioned. We have seen some changes in student outcome, and that is fantastic. Our teachers are working really hard. In getting that funding to places of greatest need—through local arrangements, through state and territory arrangements, through the resource allocation models—every state and territory is going to have a decision on a resource allocation model. I know the New South Wales one well because of my prior experience in New South Wales, and it certainly does target that funding that New South Wales receives from the Commonwealth to areas of need.

Senator O'NEILL: Dr Bruniges, do you think that some schools should have money taken from them and given to others?

Dr Bruniges : As I said, funding is increasing year on year, post 2018, with Commonwealth funding. The Commonwealth contribution is increasing at a faster rate than the state and territory contribution to education.

Senator O'NEILL: But do you believe that money should be taken from some schools and given to others?

Dr Bruniges : If you follow a principle of need, and there is a greater need that appears in a particular area of students, or a collection of students in a greater area, then in fact, using the resource allocation model for New South Wales, that is exactly what happens. Every year there is a redistribution of funding based on that need, and if there is a population of students with greater need or a higher level of concentration of students with low SES or disability, then that is reflected in the loadings that go to the schools through the resource allocation model.

Senator O'NEILL: So you continue to support needs based funding then? You believe that that is the model that should be continued? You are not proposing that some schools should lose their funding?

Mr Cook : The government is on record saying needs based funding as well, Senator. And every school increase under the government is at a higher rate than state government funding at the moment. In fact, state government funding—schools have lost through state government funding, not Commonwealth funding. If you look at very remote schools, the increase in Commonwealth funding in the first year of Gonski was 10 per cent; state funding decreased—schools lost state funding—in very remote schools in the first year of Gonski, and the MySchool data will show you that.

Senator O'NEILL: Dr Bruniges, can I take you to your statement last year when you said:

To those who say Australia has poured money into education with little to show for it, let me say the evidence is clear that levels of investment in this country have lagged behind other countries … despite data showing that education produces tangible benefits for students and the economy.

Since 2001, according to the World Bank, the estimated economic return to an additional year of education in Australia has been consistently higher than the OECD average, and shows a strong increasing trend.

Using the most recent estimates, Australia has the highest return in the OECD for an additional year of secondary education …

The minister has said many times that we have invested more in school and got worse results—is that correct? Who is right, you or the minister?

Dr Bruniges : Senator, when you consider public and private investment in school education, we have above funding levels compared to the rest of the OECD. As I said, school funding in Australia is at a record level, but outcomes are not. We need to, as an education community, really focus on what makes a difference and making sure that we attend to those strategies that are making a difference.

CHAIR: On that, Dr Bruniges, there is a link between funding and outcome. You made a speech to that effect yourself. The point you are making, that we should get the best value for every dollar, is a truism. That is a strawman argument. No-one disagrees with that; no-one disagrees with a broad principle statement that is 'when we're spending money, we should try to get as much as we can out of that'. Of course that is the case. That is this government's position; it was the previous government's position. Understandably, it should be every government's position. As a department head, that should of course be your position. But you are not coming here and saying there is not a link between increasing funding and outcomes, are you?

Dr Bruniges : As I previously read in my opening statement, which I think we have given you a copy of, the evidence from the OECD notes that for countries with high GDPs, there is no relationship between expenditure and performance, and that it matters more on how resources are spent rather than how much is spent.

CHAIR: Hang on, because this is quite significant. That flies in the face of the models we have been talking about. We can always have a debate about how you best spend money and how we should always try to find ways to better spend the money that we are spending. Are you saying that you do not believe there is a link? If you are citing data, I can cite a bunch of different data. Are you saying that there is not a link between funding and outcomes?

Dr Bruniges : The quantum of funding.

Mr Cook : Money makes a difference.

CHAIR: Yes.

Mr Cook : Everyone has said that. The minister is on record and everyone has said that—and the OECD. When it comes to money and education, the question is not how much, rather for what? Places like Luxembourg that do much, much worse than us internationally spend at least three times as much per student than Australia does. Of course money makes a difference, absolutely. We are all on record saying that. It is not whether a thousand extra next year makes a difference or whether $2 extra next year makes a difference; it is about how that money is invested not just about the cheque that is written.

Senator O'NEILL: But who it is invested in, and that is the problem that have just solved with the Gonski report. After 40 years, Gonski identified where that money needs to go. I agree, Dr Bruniges, that the finetuning can happen going forward. But we do have now, for the first time in 40 years, a needs based, sector-blind way of funding education to increase equity. We know that an increase in funding for equity leads to an increase in excellence as well. Those two things have to go together.

Mr Cook : Absolutely.

Senator O'NEILL: We have the model for it now. The Gonski funding was to deliver that exact model—the investment in needs based funding, equitable funding for students over six years. What has changed in terms of the fundamental understandings that David Gonski put on the record that would now make it suitable for a federal government to walk away from funding that fundamental change which is directed at excellence and improvement in education? What has changed other than the change of government?

Mr Cook : The act is the act which is the previous government's version of Gonski—

CHAIR: The government has changed, I think Mr Cook is saying.

Mr Cook : What is in the act is not the Gonski model. There were a range of changes made to the Gonski recommendations in every single loading and those were accepted by states and territories under the previous government, and they are in the act.

Senator O'NEILL: Yes, but essentially it rises out of the Gonski model.

Mr Cook : What Gonski did not recommend were levels of indexation and that is what the change is—post-2018. The Gonski report did not recommend to index at various levels that now appear in the act. That is not a recommendation of the Gonski review. The change post-2017 is around the levels of indexation going forward. That is the difference, and Gonski did not recommend those levels. That was the decision of the former government not of Gonski.

Senator O'NEILL: The decision of the Abbott-Turnbull government around that is referring not to the educational resource standard index but to 2.1 per cent—

Mr Cook : Which is not related to the student resource standard in its current form.

CHAIR: I am very conscious of time. We have one NAPLAN question.

Senator GALLAGHER: The papers on the weekend ran the story that some of the schools with the most significant increase in performance had been subject to funding reductions. Was that information provided by the department?

Mr Cook : The internal analysis based on NAPLAN data?

Senator GALLAGHER: Yes, and what year of NAPLAN was it?

Mr Cook : If I look at the data in front of me, we are looking at 2010-15. Queensland, for example, made the biggest increase by far in the high-performing students in Queensland. In the same financial years around that, Queensland state funding was reduced by $417 per student.

Senator GALLAGHER: So it was 2010 to 2015?

Mr Cook : That is my understanding. I can correct it if that helps you. I am happy to take it on notice.

Senator GALLAGHER: In regard to a link to the reforms to needs based funding and school resourcing standards, that would have included four years without that approach and one year with it—is that right?

Mr Cook : Sorry, it would been 2014. That was the first year of Gonski, that is correct. But it is showing that dramatic increases in some states corresponded with significant decreases in state funding. So of all the states that increased—and every state increased over that five-year period—half of those states reduced state funding on a per student basis while their results increased. These are the policy questions we have about the link between funding and results.

Senator GALLAGHER: What I am trying to say, though, is that with the Gonski reforms only starting in 2014, and using data from 2010, you cannot necessarily bring a link between the two.

Mr Cook : We can do the link that the most significant increase across the country in one state resulted in a decrease in funding.

Senator GALLAGHER: The Gonski reforms are more than just funding. They are about the way funding is allocated to particular students to improve performance.

Mr Cook : That is a state decision, not the Commonwealth's decision.

Senator GALLAGHER: You have all been at the table. They were all at the table agreeing that it was about applying funds where they were needed most, not looking at it across a population as funding per student per jurisdiction. If it is going to be used in a fair way it should be drawn out in terms of performance and funding that only included one year of Gonski and had four years of non-NERA reforms in there.

Senator O'NEILL: Exactly.

Mr Cook : But, just to clarify that, there were record increases in Commonwealth funding even before Gonski. Commonwealth funding continued to increase every single year.

Senator O'NEILL: The equitable distribution of it is the thing that changed, and we need more data before we pooh-pooh it.

CHAIR: I know we are about to wrap up and I am very conscious of time. I have just one more matter. If you need to go, Mr Cook, maybe I can ask someone else in the department.

Mr Cook : Sorry, Senator, I thought we were just here until 10.

CHAIR: That is fair enough. You have been incredibly reasonable with your time and we are running incredibly late. We will place any other questions on notice. In fairness, we did give you an allocated time of 10 o'clock. It is my fault we are 35 minutes late.

Secretary, I know you have just started. Could you make a submission if possible. Pending the proroguing of parliament and whether or not we are here in July, we would love to get you back again towards the end of the inquiry, before we make our final report but after we have received evidence from elsewhere, and have a discussion around that. Elections being what they are, we are not sure when.

Dr Bruniges : Thank you, Senators.

Senator GALLAGHER: All the best.