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School Funding Investment
Commonwealth funding for schools

LARKINS, Ms Alison, Acting Deputy Secretary Social Policy, Domestic Policy Group, Department of Prime Minister and Cabinet

SLOAN, Mr Troy, Acting First Assistant Secretary, Social Policy Division, Department of Prime Minister and Cabinet

CHAIR: We now resume with representatives from the Department of Prime Minister and Cabinet. Do you have an opening statement?

Ms Larkins : No, we do not.

Senator GALLAGHER: Prior to each COAG meeting, how is work done from PM&C out across the Public Service in terms of providing advice and support to the Prime Minister?

Ms Larkins : Are you saying: do we work collaboratively with other agencies in preparing briefing materials?

Senator GALLAGHER: We have asked a series of questions to Education, Finance and Treasury—I think you were sitting in here for some of it—and a lot of the answers were that that responsibility rests within PM&C. So I am trying to understand, in terms of preparing briefings and advice to the Prime Minister, how you call on the expertise and information of other agencies.

Ms Larkins : In the same way that we do for the broad range of issues which we provide briefing to the Prime Minister on. As we need to, we will reach into other agencies to be assured that we have got the right information to brief the Prime Minister.

Senator GALLAGHER: In terms of the idea around the possibility of income tax sharing, who had policy responsibility for that within the public service?

Ms Larkins : That idea was canvassed in the discussion paper that arose from the work of the Reform of the Federation White Paper Taskforce. That discussion paper was published in June 2015. That discussion paper canvassed a range of possible options for further consideration and development that went to possibilities for looking at different ways of addressing revenue. Those options were developed collaboratively with the states and territories. If I can give you an example of how they were developed, we had a workshop in May 2015 where we had the head of the Commonwealth Department of Education and Training come and talk to first ministers' officials about possible directions for education. So they were developed collaboratively both with the states and territories and with Commonwealth expertise. That document was released in 2015 as a public statement of the work that was being undertaken and the options that were being investigated.

Senator GALLAGHER: But my question was who has policy responsibility for the idea around income tax sharing that went to COAG on 1 April?

Ms Larkins : In the sense that it was one of the options that came out of the Reform of the Federation process, PM&C had responsibility for that.

Senator GALLAGHER: So not Treasury?

Ms Larkins : Of course we defer to Treasury on task reform issues. Governance across the whole Reform of the Federation process has included regular meetings of secretaries and deputy secretaries across relevant agencies to talk through options.

Senator GALLAGHER: So policy responsibility for income tax sharing—

Ms Larkins : To be clear, we had policy responsibility for income tax sharing as it grew out of the Federation work. We also had responsibility for briefing and pulling together the agenda and briefings on the agenda for COAG. So that is our role.

Senator GALLAGHER: So Treasury did not have policy or lead responsibility for the idea of income tax sharing?

Ms Larkins : Obviously, Treasury have lead responsibility for tax reform and for Commonwealth state relations as they relate to federal—

Senator GALLAGHER: Going to COAG it was the Prime Minister leading that with support from PM&C?

Ms Larkins : The Prime Minister always leads the agenda going into COAG.

Senator GALLAGHER: I understand. But in previous COAGs—if you were discussing housing, for example—you would expect the line agency to develop up a lot of the work that fed into the advice that goes to the Prime Minister. I am trying to understand with the income tax idea that it was led by PM&C—

Ms Larkins : We work in the same way that we always work, which is collaboratively with other agencies—line agencies and central agencies.

Senator GALLAGHER: What about the Commonwealth withdrawing from funding government schools? Who had responsibility for that?

Ms Larkins : Again, that was one of the options that were developed early on in the life of the Federation Paper, and it was developed in a collaborative way across a range of stakeholders, including state and territory governments, and within the Commonwealth government. It was one of the options that was in the discussion paper that was announced in June 2015.

Senator GALLAGHER: I get that. I get that it is easy to go back to June 2015. A lot of stuff stopped in June 2015, frankly, around the Federation. We then had two ideas coming out of that, and the next thing we heard about them was towards the end of March or early April this year. Who led the work between June 2015 and the 1 April meeting on those two ideas?

Ms Larkins : On Reform of the Federation and on—

Senator GALLAGHER: No. I am specifically asking around the government removing itself from funding government schools and around income tax sharing, not around the Reform of the Federation, which raised a whole lot of other stuff that was not pursued and has not been pursued.

Ms Larkins : The only proposal that has been on the table is the proposal that was in the discussion paper in June 2015. So I do not understand the distinction that you are making.

Senator GALLAGHER: There were lots of options in lots of different papers around the form of the Federation. I am specifically asking about two that presumably had to be developed up a lot further than they existed in a green paper in order to be brought to COAG on 1 April.

Ms Larkins : I am not sure what you think was brought to COAG on 1 April, so I am not sure what you are referring to.

Senator GALLAGHER: We can go to Glenn.

CHAIR: We will come back to that. Senator Lazarus.

Senator LAZARUS: I am just wondering how they think educators can be expected to allocate funding efficiently and create long-term plans when funding changes are frequently proposed—that is, the Prime Minister making a snap decision before the COAG meeting not to fund public schools but of course to fund private schools.

Ms Larkins : I think I heard that, but it was a bit difficult to hear. Senator, I think you are asking for my opinion about a matter of policy and I do not think I am required to give an opinion.

Senator LAZARUS: No. I am asking how you expect educators to plan long term when we continually see snap decisions being made by the government.

Mr Sloan : Senator, I am not sure there was a decision made.

Senator LAZARUS: Well, sorry, the suggestion was that the states fund public schools and of course federally they will continue to fund private schools. How do we expect our educators to plan long term a decent education plan for our kids?

Mr Sloan : I hate to have to go back to what Ms Larkins was saying, but it was just reflecting, as we said, the options in the green paper.

CHAIR: Mr Sloan and Ms Larkins, if you want to take it one step back, the broader question becomes: there is a debate at the moment, and there has been one over many years, about the future of school funding. Part of this inquiry's terms of reference is looking at future funding investment. One of the criticisms that we have repeatedly been given in the submissions to this inquiry—not unfairly—is that constant changes in the development of policy have an on-the-school implication in giving funding certainty for schools. Principals associations and others have repeatedly said that one of their big concerns is that they go to an election with one set of policies but the policy keeps changing. If we want to make it a broader question and to touch on what Senator Lazarus said, it is: what is the government prepared to put in place to give a level of certainty around policy change? Again, we just heard Treasury and Finance talk about how another option is going to be developed perhaps for school funding as early as January next year as part of the Federation process.

Ms Larkins : If I can take your last point first: it is not another option. I think what COAG agreed last week was that there would be an agreement in place about state school funding by the beginning of next year. It is not necessarily another option; it is an agreement to have an agreement in place.

CHAIR: It is an agreement to have an agreement.

Senator LAZARUS: Chair, can I just butt in. Did you say that they will have a clear idea of funding by early next year?

Ms Larkins : Sorry, Senator, I did not hear that.

Senator LAZARUS: I just thought I heard the gentleman there say that they will have a funding plan in place by early next year. Is that what was said?

Ms Larkins : Yes, that was the agreement at COAG on Friday last week.

Senator O'NEILL: To be clear: that was after the rejection of the Prime Minister's proposal to walk away from government school funding. There was an agreement that some funding negotiation would be undertaken and an agreement reached by beginning of 2017.

Ms Larkins : Yes.

Senator O'NEILL: But the terms of that agreement were not decided at COAG; they remain unknown.

Mr Sloan : There was not a proposal to walk away, to withdraw from school funding.

Senator O'NEILL: The Prime Minister is on the record making a very clear statement about that on 31 March.

Ms Larkins : Are you referring to the Radio National interview?

Senator O'NEILL: Yes.

Ms Larkins : We do not read that as an announcement or a decision. In our understanding of what the Prime Minister was saying, he was using a discussion of school funding as an example of what might occur under income tax sharing arrangements. He was not making an announcement of a policy decision.

Senator O'NEILL: I might posit, Ms Larkins, that the rest of the country heard it in a very different way. When a Prime Minister speaks about the fact that he might decide to walk away from funding of government schools, every family in the country pays attention.

Ms Larkins : I understand that, but my point is that I do not think you can characterise that as an announcement. I do not think it was an announcement or a decision.

Senator O'NEILL: What was it then?

Ms Larkins : I think it is clear. I have the transcript before me, and he talked about it as an example.

Senator O'NEILL: What is it an example of?

Ms Larkins : It is an example of what you might do under a revenue-sharing arrangement.

Senator O'NEILL: So it is an example of what the government would do if the Prime Minister got his two levels of taxation proposal through?

Ms Larkins : It was an example of something that could be examined under the income tax sharing proposal.

Senator O'NEILL: And it reveals the Prime Minister's thinking, which is informed by your department.

Ms Larkins : I cannot comment on that.

Senator GALLAGHER: I understand the difficult position you are in. He made some comments on Radio National, but then he went and stood in a football field in Penrith and expanded on those around how that might look. He then appears in a paper report, I think on the same day, talking about how he would consider funding non-government schools because there would be a concern they would not get a fair go from the state governments. It was not just one throwaway line; there were a series of statements from the Prime Minister. He even went on to say:

We have a massive education department in Canberra … but we don't employ any teachers. You have got to ask yourself whether we should not have clearer lines of responsibility.

When the Prime Minister stands up and makes repeated statements like that, I think it is probably fair to say that this is an idea that has been developed over time and that it is probably, people would presume, supported by information and advice from his public servants, who are there to advise him. Are you saying from that that PM&C had not provided advice to the Prime Minister around how withdrawing from education funding might work?

Ms Larkins : No, I am not. We provide advice to the Prime Minister on a broad range of issues.

Senator GALLAGHER: So you have provided advice or you were aware of this before you read it in the media?

Ms Larkins : As I said before, we provide the PM advice on a broad range of issues. It is my understanding that we would not normally go into the detail of the advice that we provide.

Senator O'NEILL: Were you aware that the Prime Minister was to make those remarks, which are now a matter of fact, on 30 March and 31 March, prior to COAG?

Ms Larkins : Was I personally aware? No.

Senator O'NEILL: Had you briefed the Prime Minister, with regard to the details that he revealed to the Australian people through those interviews?

Ms Larkins : As I said, we brief the Prime Minister on a broad range of matters.

Senator O'NEILL: And this was one of the matters.

Ms Larkins : We would not normally reveal the content of those briefings. That is my understanding.

Senator O'NEILL: But you have said that you—

Ms Larkins : Of course, we have briefed the Prime Minister on the full range of issues that have come out in the context of the Reform of the Federation work.

Senator O'NEILL: There were four options that were clearly articulated here this morning by Mr Cook, which were options for consideration about different ways of funding education as part of federation reform. One of those was for the federal government to walk away from funding government schools in the states. Did you brief the Prime Minister on that model at any point in time prior to the 30th and the 31st?

Ms Larkins : I do not know. I would have to take that on notice. I am not sure. We briefed broadly, but I do not know, so I will take it on notice.

Senator O'NEILL: I am finding it hard to understand how a series of interviews and commentary from the leader of the country, the Prime Minister, of such portent for the whole nation is an issue that you cannot recall, if you briefed him on prior to that.

Ms Larkins : I do not have the details. I am not the only person in the department who might have briefed on this. I think I will give you a better answer if I take it on notice.

Senator O'NEILL: Who would brief the Prime Minister on matters related to education policy and funding?

Ms Larkins : My responsibility is education policy and COAG, but we also have areas of the department that are responsible for economic policy. I am saying that I will come back to you on notice and give you an answer to that question.

Senator O'NEILL: So your primary responsibility is to brief the Prime Minister on education matters?

Ms Larkins : It is one of my responsibilities.

Senator O'NEILL: What other responsibilities do you have?

Ms Larkins : I am Acting Deputy Secretary of the area that is responsible for social policy and for COAG in the Domestic Policy Group.

Senator O'NEILL: But is there anybody else predominantly responsible for briefing the Prime Minister on education policy other than you, Ms Larkins?

Ms Larkins : I think in the context of income tax sharing, yes, there would have been other people in the department also responsible for briefing.

Senator O'NEILL: But you personally did not provide any briefing to the Prime Minister?

Ms Larkins : No, I am not saying that, Senator. I have said that I will take it on notice. I think you asked me, actually, had we provided any specific briefing on one of the options in the green paper. Really, over the life of the work of the reform of the federation, I cannot tell you that off the top of my head. I need to go and have a look.

Senator GALLAGHER: Going back to the questions that I started with, what we are trying to get to here is: between the green paper in June 2015 and the COAG meeting which linked, as an example, or as an announcement, to education as, potentially, one of the changes under income tax sharing, what work was done within the department to develop up that idea?

Ms Larkins : Across the whole range of options that were on the table—

Senator GALLAGHER: No. I have been watching the federation process and I have seen where it has gone. Elements of it have stalled. In fact, we have had officials sitting before us saying that there are elements of the federation reform process that have ceased for the time being. I am specifically asking about the education funding—the withdrawal of the Commonwealth from funding education linked to the income take sharing. How much work, or what work, was done in between the green paper and COAG on that concept?

Ms Larkins : Following the leaders' retreat, there was ongoing work led by the states and territories, I think, in all cases on reforms across a range of areas which included education and health. The Commonwealth was heavily involved in discussions. There were discussions that were being driven by the states around revenue options, and various proposals were put on the table by the states in that space. You would have been aware of Premier Weatherill's proposal in that regard. I think Premier Palaszczuk and Premier Andrews also put proposals on the table about the Medicare levy. So there was a broad discussion about various revenue options that was happening in the context of the reform of the federation process. At the same time, work was going on on reforms that we might undertake in health and reforms that we might undertake in education. A lot of the work in the task force was focused on the reforms that were necessary to improve overall educational outcomes, as the discussions about revenue were happening in another stream run by different parts. So your characterisation that work stopped is perhaps not—

Senator GALLAGHER: It is not my characterisation. We have had officials before us who have said that.

Ms Larkins : I was running the team from September, and, certainly, there was work ongoing then with the states on the range of options.

Senator GALLAGHER: When was that work complete?

Ms Larkins : I think we took a range of proposals to the last COAG in December. There was a broad discussion between premiers and the Prime Minister and an agreement to do more work focused on, in particular, hospitals. I would have to go back and have a look, but there was some reference to schools reform, I think, in that. So, from December, work has continued.

Senator GALLAGHER: And has it been finalised? Has agreement had been reached?

Ms Larkins : As result of the COAG decisions on Friday, we have an interim decision on hospitals which includes funding an additional funding investment of $2.9 billion and a range of reforms. We have agreed that work will continue on an agreement on schools funding. There is a commitment to have that resolved by the beginning of next year. That will be driven by Minister Birmingham, with his state and territory colleagues. In addition, there will be some Treasury-led work on income tax sharing.

Senator GALLAGHER: That is under the 'more efficient federation for all Australians' part of the communique.

Ms Larkins : Yes, that is right.

Senator GALLAGHER: So Treasury is going to lead the income tax sharing now after PM&C have been leading it. Is that right?

Ms Larkins : They are going to lead the development of that work.

Senator GALLAGHER: Treasury having responsibility for income tax is novel.

Ms Larkins : To be clear: we have had a sort of whole-of-government task force at times. We have had Treasury staff on that task force. We certainly had a Treasury staff member on the task force for the last three months. So it is probably not reasonable to characterise it as purely a PM&C process. We have been working collaboratively with central agencies and others.

Senator GALLAGHER: That is why my questions were about who has portfolio responsibility.

Ms Larkins : We have had overall responsibility for working for the reform—the federation process—collaboratively with our colleagues.

Senator GALLAGHER: In the COAG communique there is a dot point that says leaders agree to consider proposals to share personal income tax revenue with the states and then there is a series of dot points. Would education funding arrangements fall within those dot points?

Ms Larkins : My understanding is that we have a broad range. Again, I am speaking outside my area of expertise. We have a broad range of special-purpose payments.

Senator GALLAGHER: I get all that. I am conscious of—

Ms Larkins : If I can finish. One of those payments is payment that goes to the states for the purpose of schools. In a discussion about what expenditure you might untie, clearly, if you are looking at the whole range of money that the Commonwealth provides to the states under special-purpose payments and national partnerships, schools are one of the areas that we fund, but they are certainly not the only area in which we find that.

Senator GALLAGHER: So that is a yes. I am not saying it is education-specific.

Ms Larkins : I am saying funding to the states for schools falls within funding that the Commonwealth provides under SPPs and NPs.

Senator GALLAGHER: I understand that. My question was: is work going to be progressed under that dot point in relation to schools education?

Ms Larkins : I do not know.

Senator GALLAGHER: I have asked this of previous witnesses, and they have said that PM&C are the people who can answer that because you have responsibility for that.

Ms Larkins : To my understanding, this work has not—it may have started this week, but COAG was only on Friday. I do not think we have terms of reference or scoping. I am saying to you that, broadly, within the $48 billion or $49 billion—the bulk of money that goes annually to the states under SPPs and NPs—there is money that goes for school funding. I am saying that, depending on the scope, which I do not think has been agreed yet, it may or may not fall in. I do not think I am in a position to give you an answer.

Senator GALLAGHER: Could you please take that on notice?

Ms Larkins : I can. I may need to refer it to Treasury.

Senator GALLAGHER: I asked Treasury and they referred me to PM&C.

Ms Larkins : I can take it on notice.

CHAIR: There have been a fair few questions taken on notice. Would it be reasonable to see if by the end of next week some of these could possibly be answered? If there is a reason why not, I completely understand.

Ms Larkins : We will do our best.

CHAIR: There are some questions that involve different levels of information being gathered, and sometimes what seems like a simple question involves information that, by the way information is captured, is not readily available.

I have a copy of the transcript of the Prime Minister's doorstop, ABC interview and a few other media events he did on the 30th and 31st. Was there a prime ministerial statement or press release put out by the Prime Minister that you are aware of? I could not track one down, but that is not to say that there was not one. I was kind of going off the media comments.

Ms Larkins : There was a statement on Federation that the Prime Minister released on 30 March.

CHAIR: I assume that is a publicly available document. Is that something we could get a tabled copy of?

Ms Larkins : It is available on the Prime Minister's website, so I am happy to give you a tabled copy.

CHAIR: Thank you. We will get that. It is not an issue. The preparation of that kind of document is obviously done by the Prime Minister's office, correct?

Ms Larkins : I do not know. In this case I do not know who has done it. I would need to provide you advice on that.

CHAIR: That is all right. Why don't I ask a more specific question then? Were you involved in the preparation of that document?

Ms Larkins : Again, I do not know. Normally we would provide advice.

CHAIR: Sorry, these are two separate questions. The first one was: were you specifically involved?

Ms Larkins : Was I personally involved? To be frank, last week was a bit of a blur, and I would like to take it on notice. There was a lot going on last week. I am not sure whether advice that I may have cleared may have found its way into this.

CHAIR: Okay. Could you take on notice two questions? First, were you involved? Second, what was the role of the department in the formulation of that media statement? Obviously, you will have to speak to others for the second, and you may have to check your own recollections for the first.

I want to get my head around how the normal process works here. We heard evidence from the Department of Education and others describing the normal process as the advice to the Prime Minister being the prerogative of Prime Minister and Cabinet. That is a core function of PM&C, correct?

Ms Larkins : Yes.

CHAIR: From time to time Prime Minister and Cabinet, from either a departmental level or the Prime Ministerial executive level, may seek the advice of others. It happens from time to time depending on issues, correct? The Prime Minister may draw on the expertise of the Secretary to the Treasury, the secretary of education or others.

Ms Larkins : Are you asking if the Prime Minister asks other agencies directly for information?


Ms Larkins : I am not sure that I can answer that. I think I can talk about what we do in the department. I cannot talk about what the Prime Minister does.

CHAIR: Okay. Are you aware of circumstances where other departments have been involved in the briefing of the Prime Minister?

Ms Larkins : Yes.

CHAIR: I can tell you right now Ken Henry would brief the Prime Minister during the GFC. These things happen. That is a matter of fact. From time to time other departments brief the Prime Minister, but the line-item responsibility for the briefing of the Prime Minister is with Prime Minister and Cabinet, correct?

Ms Larkins : That is right.

CHAIR: In addition to other departments occasionally briefing the Prime Minister, what happens commonly is that, in the preparation of the briefing of the Prime Minister, the department will seek the expertise that may exist within other departments, correct?

Ms Larkins : It would be quite unusual for us not to draw on the expertise of an agency.

CHAIR: If you are briefing the Prime Minister on health policy, education or law and order, you would go to the relevant—

Ms Larkins : Our position would be informed by our relationships and information that we had with the line department, yes.

CHAIR: Again, you may not be able to speak for everyone in your department, and things happen in departments at different levels, but are you personally aware of a situation that would render incorrect the information provided by the acting Secretary of the Department of Education this morning, which was that, post the preparation of the green paper in June or so last year up until the Prime Minister's announcement, statement or commentary, they were not aware of any instance where the Department of Education was involved in the briefing of or the preparation of information for PM&C.

Ms Larkins : Could you repeat the first part of your question?

CHAIR: Sure. I do not want to do a disservice and be unfair, because I have access to information provided this morning that you were not available for. To paraphrase the acting secretary and now associate secretary, Mr Cook—and my colleagues will correct me if I paraphrase this incorrect me—the evidence that was provided by him was that there was work done in the preparation of the green paper by the Department of Education where they provided input into a PM&C led process, which was the federation process. Their role ended with the preparation of the green paper up until the announcement from the Prime Minister on the 30th and 31st. I am taking those two days as if they were one in that there was a statement on the 30th and 31st that drew directly on the educational impacts of that statement.

The advice provided this morning was that the department had not briefed or provided advice to the Department of the Prime Minister and Cabinet during that period. Is that correct?

Ms Larkins : Had not provided advice to us—

CHAIR: related to those matters.

Ms Larkins : Related to which matters?

CHAIR: Related to the matters that were outlined in the Prime Minister's statements on the 30th and 31st.

Ms Larkins : Are you talking about the discussion the Prime Minister had on the possibility related to the income tax revenue sharing process?

CHAIR: I am saying the proposal the Prime Minister floated—I am trying to use these terms without bias. The Prime Minister outlined an idea, proposal or announcement—whatever you want to call it—about a new arrangement for state and federal funding of education. The Prime Minister outlined it as something that he would want to discuss with the states in the lead-up to, if not at, COAG. That is a fact, right?

Ms Larkins : Yes.

CHAIR: The Department of Education provided information to us today that this related to an option that was part of a green paper process through the federation process and that they were involved in it up till June or so last year.

Ms Larkins : I think I need to take it on notice to answer you properly. I would need to have a look at what advice and conversations we had had with the department in relation to that specific issue.

Senator O'NEILL: Mr Cook was very clear with us this morning that, as of June, the four clear proposals that were outlined in the green paper went forward. They have done other work in the interim. They have worked with people in PM&C but not around those matters.

Ms Larkins : Not around the particular options that were outlined in the discussion paper.

Senator O'NEILL: That is exactly right.

Ms Larkins : Again, for me to be completely clear, I would like to take it on notice and come back to you. I have undertaken to do that as quickly as we can.

CHAIR: Yes. I am sorry, but it makes me question things. Everything we ask you take on notice, and some of these are fairly fundamental.

Ms Larkins : I do not think that is fair. I am trying to be as helpful as I can.

CHAIR: You are right to take things on notice, and I can understand if what you are taking on notice is to say you cannot speak for others and will find out if others in the department have been involved in discussions, but not to be able to answer even whether you specifically have been involved strikes me as a bit odd. But it is your right to take things on notice. That is within the standing orders.

Senator O'NEILL: Could I clarify your role? You said that in September you came to a new role—

Ms Larkins : I took over heading the reform of the Federation Taskforce in September.

Senator O'NEILL: Okay. How long have you been the education adviser to the PM?

Ms Larkins : I am the acting deputy secretary responsible for social policy, and education falls within that.

Senator O'NEILL: How long have you been in that role?

Ms Larkins : Five weeks.

Senator O'NEILL: Who was in that role prior to you?

Ms Larkins : Rebecca Cross, who is on long-term leave. She has taken a year off.

Senator O'NEILL: In the time that you have had that responsibility for education within your role, which is a period of five weeks, have you provided advice to the Prime Minister that would inform his announcement that you indicated was in that piece of paper beside you on the 30th?

Ms Larkins : As I said previously, yes, I have provided advice to the Prime Minister on a range of issues and it is my understanding that we would not normally into the details of the matters on which we provided advice.

Senator O'NEILL: How many people are in PM&C?

Ms Larkins : I do not have that off the top of my head.

Mr Sloan : Don't hold me to this, but I think it is a bit over 2,000.

Senator O'NEILL: And how many staff do you have within the social policy area?

Ms Larkins : It would be less than 100.

Mr Sloan : Yes. In the social policy division we have in the range of 65 to 70, and then we have the Federation Taskforce.

Ms Larkins : So it is less than 100.

Senator O'NEILL: In terms of people specifically tasked with providing high-quality advice to the Prime Minister around education, how many dedicated staff do you have for education policymaking?

Ms Larkins : I will take that on notice momentarily. I can probably get that for you.

Senator O'NEILL: Thank you. I would like to ask a question about that once we have that number, if we can get it. One of the questions that I have around education is: when did you become aware of the Prime Minister's statements on the 30th and the 31st? Did you have any indication that that was going to be announced on the 30th or 31st or were you first aware of it when it hit the news?

Ms Larkins : Again, I think that goes to conversations that I have had, or I may have had, with the Prime Minister or that the department has had with the Prime Minister. It is my understanding that we would not normally go into the detail of those.

Senator O'NEILL: We are allowed to ask questions about timing, Ms Larkins, and this is a specific question about timing.

Ms Larkins : It is a specific question about timing and I would like to take it on notice so I can be accurate.

CHAIR: Ms Larkins, you are telling us that you do not know whether or not you were aware that the Prime Minister made an announcement on the 30th and the 31st?

Ms Larkins : Sorry—was I aware that the Prime Minister made an announcement? Yes, I was aware.

CHAIR: Were you aware that the Prime Minister was making the announcement before he made it?

Ms Larkins : I think the question was: when were you aware? I have undertaken to take that on notice.

CHAIR: I am asking a separate question. Were you aware prior to the Prime Minister's announcement? We have heard from Treasury, Finance and Education, all of whom have said, 'No, we became aware of the statement afterwards.' The Prime Minister is allowed to make a statement—

Senator O'NEILL: Any time he likes.

CHAIR: any time he likes. He is the Prime Minister of Australia. But that is how they became aware.

Ms Larkins : Again, I think this goes to briefings and conversations that we have with the PM, and I would prefer to take it on notice and come back to you. We do not normally divulge the content of conversations—

CHAIR: But nobody is asking about content.

Senator O'NEILL: This is exclusively a timing question.

Ms Larkins : I understand, and I would like—

Senator O'NEILL: Before the Prime Minister made his comments on the 30th and the 31st—and you are going to check to see if you had anything to do with it—did you know the content of what he was to say? As his senior education adviser, were you aware before or after?

Ms Larkins : Was I specifically aware of what he was going to say on the Radio National interview that morning? Was I specifically—

Senator O'NEILL: And his subsequent commentary.

Ms Larkins : No, I was not specifically aware. I would like to come back to you on notice on that question.

Senator O'NEILL: Did you provide advice to him about the matters that he made public on the 30th and the 31st, at any time in the week preceding?

Ms Larkins : As I said earlier, we provide briefings to the Prime Minister on a broad range of issues.

Senator O'NEILL: I am not asking about anything else; I am only asking about education. So, linking these two things—

Ms Larkins : I have already taken it on notice and I will come back to you on that.

Senator O'NEILL: That was a separate question. Did you provide any advice to the Prime Minister in the week preceding his very significant announcement?

Ms Larkins : I understand what you are asking for and I have agreed that I will come back to you on notice with an answer to that question.

Senator O'NEILL: Ms Larkins, can I tell you how concerning it is that, as the primary adviser to the Prime Minister on education program funding for the entire nation, you cannot even tell us if you spoke to him about that major signalling in the week prior.

Ms Larkins : I have not said that I cannot tell you. I have asked to take it on notice. I have said I will come back to you on it.

Senator O'NEILL: But this is an issue of such importance to the entire nation. I am surprised that you cannot answer such a simple question.

Ms Larkins : I understand the importance of it and I have not said I cannot answer it. I have asked to take it on notice.

Senator O'NEILL: But you knew that you were coming here today, and this is a key question that people want answers to.

Ms Larkins : With all due respect, we got very little notice of this hearing.

CHAIR: Firstly, it is Ms Larkins's prerogative, under the standing orders, to take a question on notice. She is entitled to take a question on notice. How that reflects on Ms Larkins is a matter for her. But it is within the standing orders for her to take any question on notice.

Ms Larkins : I would prefer to make sure I was accurate in my response.

CHAIR: Sure. To be specific about the questions you are taking on notice, you are taking on notice two separate questions that have been asked. The first question, at a more micro level, is about whether you were aware of the Prime Minister's comments before the comments were made. The second question is: if you were aware, when were you made aware? One obviously feeds off the other. Again, Ms Larkins, it is your right to take it on notice. You are entitled to do that.

Senator O'NEILL: There was a possibility that you could indicate the number of people who are specifically advising around education within PM&C.

Ms Larkins : We have four dedicated people in PM&C who work across education at the minute. This is schools only; just on schools.

Mr Sloan : Yes, schools. We have higher education advisers and so forth.

Senator O'NEILL: This is specifically about schools.

Ms Larkins : Yes, and a proportion of the roles of two SES officers who also advise on education.

Senator O'NEILL: An additional two?

Ms Larkins : Part of the work of an additional two SES officers.

Senator O'NEILL: We heard this morning you also have a department to draw on which has 280 people. My question is: how can the Australian people be assured that sound education policy is being delivered to the Prime Minister by a group of four—two part-time officers and you—who advise the Prime Minister? That is a very small number of people to be almost the sole advisers to the Prime Minister. We heard that the department has not done any work on this proposal from June through to March.

Ms Larkins : I have taken that part of the question on notice. I just make the point: I think the Prime Minister's public statements have indicated that he considers his primary advice comes from the relevant minister. We also provide advice, but there is a minister and a department that provides advice as well.

Senator O'NEILL: But the minister has absolutely contradicted what the Prime Minister said. We had evidence this morning from the department saying they have not advised the Prime Minister, at any point in time, despite the portent and the scale of the announcement that he made on the 31st. The education department—

Ms Larkins : I do not think they have said that, actually, because I think they have acknowledged that we worked together on a range of options that were developed under the duration—

Senator O'NEILL: They did not directly brief the Prime Minister. They made that very clear. Their briefings have been through conversations with you. They indicated to us that from June through to March they had no substantive conversations with PM&C around the funding option, which became such significant news on the 30th and 31st. That means the department of education is operating in a complete silo from your department in terms of this matter.

Ms Larkins : You have put this to me a couple of times and I have said that I will come back to you on the conversations that we have had with the department of education on this matter, so I would like to be able to do that if I can.

Senator O'NEILL: I am a bit gobsmacked—six people advising the Prime Minister.

Senator GALLAGHER: Did PM&C look at the educational implications of a change in funding arrangements for government schools which would have the Commonwealth stop funding government schools?

Ms Larkins : Yes, in the context of the work that we did on Federation. We looked more broadly. Across all sectors, we looked at the question about whether things would be improved under one of two scenarios. We applied that in each sector: was there an argument for having just one level of government responsible for running a particular sector? Schools are an example of that. We also applied this question to health funding: would we get better outcomes with a cooperative approach? We looked at each area that was a focus of the Federation. We applied that lens.

Senator GALLAGHER: What did that show in terms of educational implications?

Ms Larkins : Again, we were not coming to a final or formal view. This was a process of policy deliberation in some ways. We had a number of options on the table. I think the discussion paper set out the pros and cons in relation to each of those options.

Senator GALLAGHER: At a very high level, but I would expect that before something is actively pursued there would be much more thorough and rigorous analysis done of the potential educational implications—funding aside—of what a change like that would look like. I guess my question is: what did it find? What were the educational implications of that option that the Prime Minister pursued?

Ms Larkins : I think the options are well spelt out in the discussion paper. Your second question goes to—

Senator GALLAGHER: So nothing has being done since then—

Ms Larkins : the content of advice that we may have given. It is my understanding that we would not normally go into the detail of that advice.

Senator GALLAGHER: Basically, for the extent of the educational implications of such a change, you refer me back to the pros and cons in the discussion paper—the green paper.

Ms Larkins : And I am saying we would not normally talk in detail about material that may have gone to the Prime Minister or may be subject to a cabinet process. That is my understanding. Again, I am happy to take that on notice.

Senator GALLAGHER: I guess this goes to where the whole Federation reform process got to, because there was the green paper and then there were going to be other papers. It was quite a public process and now who knows.

Ms Larkins : Clearly, we have had some substantial outcomes from that process at COAG on Friday.

Senator GALLAGHER: In relation to those, the outcomes from COAG—and I accept it is only a week ago, but that is a full working week and work gets delegated pretty quickly; my experience from COAG is that the wheels are put in motion—can you explain what the next steps are around that from an educational point of view? I understand the sign off for 2017—the work—but are there any IDCs being formed?

Ms Larkins : Again, I think I said earlier that the work on income tax sharing will be led by Treasury, and I am not aware of what work has been done this week to set that process up. I imagine there will be mechanisms for collaboration across government. That would be a usual point. I also made the point that Minister Birmingham is responsible for working with his colleagues in the states on a schools funding arrangement.

Senator GALLAGHER: I am specifically interested in the devolving of grants—that element in the communique. If you cannot tell me, is it possible for you to take on notice what arrangements are being put in place to pursue that and the time frame around it?

Ms Larkins : Certainly, but I again just state that that work is not focused primarily or exclusively on education.

Senator GALLAGHER: I get that. I am not trying to make that point. I am trying to understand how that work is going to be progressed.

Ms Larkins : We can certainly come back to you on that, Senator.

Senator GALLAGHER: Thank you.

Senator O'NEILL: I would like to ask questions in relation to advice that you have given the Prime Minister. Last week the Prime Minister said:

I suspect no federal government would retreat from funding and continuing to support the non-government school sector because there would be a concern that they would not get a fair go from state governments, who obviously would have a competing interest with their schools.

Did you give the Prime Minister policy advice that manifested itself in that statement?

Ms Larkins : As I have said before, we give the Prime Minister advice on a whole range of matters.

Senator O'NEILL: I am not interested in the whole range; I am interested in this. Did this statement of the Prime Minister arise from policy advice that was given to him by his education experts in PM&C?

Ms Larkins : It is my understanding that we would not normally divulge the contents of advice that we have given to the Prime Minister.

Senator O'NEILL: At any time.

Ms Larkins : Again, I am happy to take it on notice, but it is my understanding that we would not normally do that.

Senator O'NEILL: You have given advice around the funding model for state schools and non-government schools going forward. Is that—

Ms Larkins : I am not sure what you mean by that.

Senator O'NEILL: Have you given, in the last period, since the new Prime Minister became the Prime Minister—just in that period of time—advice about funding for government schools and non-government schools, in separate measure?

Ms Larkins : Again, I will take it on notice. I am not sure.

Senator O'NEILL: Could you take on notice: what does the Prime Minister mean by 'a fair go' for private schools? Did you provide, at any time, advice to the minister around those matters?

Ms Larkins : I can take that on notice. I do not think I can take on notice what the Prime Minister meant by that statement.

Senator O'NEILL: In terms of policy, what is the reason for making non-government schools a priority for the federal government but not government schools?

Ms Larkins : Again, I think that is a question for government.

Senator O'NEILL: Did you provide any advice around the prioritising of funding for government or non-government schools?

Ms Larkins : I think that falls within the scope of questions that I have already taken on notice. I am happy to come back to you on that.

Senator O'NEILL: Could you take on notice whether you have consulted on policy that indicates that a culture of collaboration generally leads to better education outcomes? Did that inform the decision?

Ms Larkins : Sorry, could you spell that out again? I could not understand it.

Senator O'NEILL: I will put it in writing for you. It is really around the evidence you have drawn on and when you provided that advice to the Prime Minister, in terms of differential treatment of the government school sector and the non-government school sector.

Ms Larkins : I am happy to include that in—

Senator O'NEILL: I assume he did not make it up on the spot. I am making that assumption. I know that is a possibility, and I am probably thinking that more now.

Ms Larkins : As I have said to you, we provide him with briefings on a wide range of matters.

Senator O'NEILL: So, if he did not make it up on the spot, I assume you gave him policy advice at some point in time to treat government and non-government schools differently.

Ms Larkins : As I have said before, we would not normally disclose the advice that we give.

Senator O'NEILL: When did that advice happen? Otherwise, he must have made it up on the spot.

CHAIR: You are taking that on notice, Ms Larkins?

Ms Larkins : Yes.

CHAIR: Thank you, Ms Larkins. We have requested answers to questions on notice a week from now, if possible and reasonable. If there is a reason why some of the questions cannot be answered in that time, the committee is prepared to be incredibly reasonable.

Ms Larkins : We will do our best to meet that.

CHAIR: Thank you. I thank Senator Lazarus, Senator Gallagher, Senator O'Neill and the secretariat. I also thank witnesses. It is true that we put this hearing together with reasonably short notice. The proposition of changes to the sitting schedule meant we had to compress matters that we would perhaps have done over a longer period. I thank the witnesses for making themselves available with shorter notice than we would normally like to give.

Committee adjourned at 12:16