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Tuesday, 6 December 1983
Page: 3278

Senator ZAKHAROV —My question is addressed to the Minister for Education and Youth Affairs. Since much has been said about the supposed uncertainty of the Government's new funding formula for non-government schools, will the Minister confirm that the old percentage link did not provide the certainty and stability that its proponents now claim for it?

Senator RYAN —One of the rather surprising things about the terms in which the current education funding debate is being conducted is the myth that has been built up around a particular way of distributing funds, which was, by giving a percentage of average government school costs to all schools in the non- government sector, the same percentage was given to all levels of category, whatever their needs, so that if the average government school costs rose by 2 per cent, a 2 per cent increase was given across the board to the non-government sector. Why such a formula, which was a very rigid one and not a very predictable one, has been turned into some sort of myth from which any departure should cause fear and trembling in the non-government sector, is something I find it very difficult to understand.

Senator Chaney —Because it was a guarantee.

Senator RYAN —Let us see what it was a guarantee of. It was a guarantee only that a certain measured percentage would be passed on. It was not a guarantee of an amount of money or an amount of growth. There are a number of things that should be considered by people who are now clinging to this concept of the percentage link as the best way of getting a fair deal. The elements which were put into average government school costs from which the percentage was derived, were subject to decisions of government. There was nothing totally objective and predictable about them. That is, what was counted or discounted for the purposes of this formula was very much a matter for the judgment of governments and their officials. In the case of most States, the elements in the formula were not matters of public information, and the increases provided by the percentage link formula varied quite dramatically and could not be predicted. For example, since 1980 they have ranged from almost 6 per cent in one year to less than one per cent in another year. So really, loooking at it objectively, there could be little confidence or certainty about such swings.

One of the things that we will do is to provide a formula of funding which will give a much higher degree of predictability than what I have now described and exposed to the Senate as having been a very unreliable way of predicting costs. The Government has already improved on this unpredictable situation with which non-government schools were faced under the previous formula. In a major step, and one which still has not been widely recognised, the Government will provide retrospective cost supplementation for all grants to non-government schools from the beginning of 1984. We have backdated this recently to cover the 4.3 per cent national wage case decision of October 1983. Now this will mean the expenditures of an extra $5.8m over and above the budgetary allocation that was announced in July. An extra $5.8m has now been appropriated for non-government schools this year, in 1983, including extra funds for all schools in group 1 and group 2 categories. So there is already through this commitment to supplementation for wage and salary increases a much greater predictability than has prevailed before. I think it is time that that was acknowledged. I point out also that those schools that are now informing the parents that there will be cost increases, ought not to pretend that wage and salary increases are the cause of those fee increases because, as I have now clearly explained again to the Senate , wage and salary cost increases will be supplemented by us, and have been for the recent 4.3 per cent national wage increase.

Another point ought to be made. There has been a consistent downward trend since 1980 in the rate of increase in average government school costs. If this trend were to continue it is not inconceivable that under the old percentage link formula, the one we are hearing so much about, the per capita grants to all non-government schools might actually have declined. It is time for all of those who are seriously concerned about equity in non-government school funding to look at what the old formula really meant, how it was made up and what kind of increases passed on to non-government schools as a result of it. They will conclude, as we concluded, that it was an unsatisfactory formula, that it did not contain predictability in terms of growth and increased funds and that it certainly did nothing to do what we are determined to do, that is, to redistribute funds in terms of equity and need.