EMMA ALBERICI: Education funding was indeed the subject of our poll this week. We asked you whether more money would improve outcomes in Australian schools. History doesn't find a relationship between funding and performance. The first tests comparing international school achievements were conducted in the year 2000. Back then, Australia ranked 6th for maths, 8th for science and 4th for reading. By 2012 Australia's education system had failed to keep up with peers, this despite record investment in our schools. We dropped to 19th for maths, 16th for science and 13th for reading. In Government, Labor vowed to turn the situation around and Prime Minister Julia Gillard set an ambitious goal. By 2025 she wanted Australian high schools scored within the top five in the world. Her prescription was based on a funding review conducted by businessman David Gonski. It called for a needs-based allocation of Government money to address the growing gap between the performance of students from wealthier families and those from poorer ones.

In this election campaign the Coalition is pledging $1.2 billion over three years to fix the problem. Labor is promising considerably more, an additional $3.8 billion, but over a 2-year period to fund the Gonski reforms in full. To debate their education policies I was joined earlier from Adelaide by the federal Minister Simon Birmingham and from Brisbane, Labor's education spokeswoman Kate Ellis. Thanks very much to both of you for joining us.

SIMON BIRMINGHAM: Great to be with you, Emma.

KATE ELLIS: Great to be with you, Emma.

EMMA ALBERICI: This week we asked our audience if they thought more federal funds for schools would improve outcomes. Now can I ask both of you to answer that same question? Kate Ellis, let's start with you.

KATE ELLIS: Well, I certainly think that more of the programs that work in our schools will improve outcomes and we know that that requires resources. You can't have more early intervention programs, you can't have more individual attention, more literacy and numeracy support without having the resources to do it and we know that the evidence says it's these programs that lift our learning outcomes.

EMMA ALBERICI: Simon Birmingham, will more Government funding bring better outcomes?

SIMON BIRMINGHAM: That depends entirely upon how it's used. It's critical funding is used as effectively as possible, that it's targeted and directed to those who need it most, and that's our commitment to keep funding growing into the future at an affordable rate, to direct it to those most in need, and to ensure that we drive reform through our education system by leveraging the Commonwealth fund funding we have to get the states to implement real reforms, to lift reading rates, lift literacy outcomes, numeracy and maths engagement and foreign languages. These are the types of things that parents want to see.

It's not all about the money, though, it is about how that can be used most effectively and that's what we are determined to ensure occurs.

EMMA ALBERICI: Indeed. David Gonski spent quite some time analysing that very issue about how the money should be allocated. Simon Birmingham, how will you guarantee that any new funding you provide for schools will be prioritised to those who need it most? What formula will you use?

SIMON BIRMINGHAM: Well we will use transparent loadings that ensure students who are attending schools with low socioeconomic status, or that those students with a disability or students in smaller rural and regional remote communities or Indigenous students receive additional loadings, receive additional support. What we will seek to do though is get away from the 27 different funding models that we inherited from the previous Government under their so-called national reforms that really provided a very piecemeal approach, and get the States and Territories to be transparent about how they allocate funding, ensure that parents can actually see that it is allocated according to need, not by a bureaucrat in Canberra who does a theoretical formula but then sends a lump sum cheque to a State Government, but by the States and Territories themselves when they distribute the money out to the schools in their communities.

EMMA ALBERICI: Kate Ellis, if there's one Gonski funding model, how do you explain what Simon Birmingham says is 27 different funding agreements?

KATE ELLIS: Well, of course, we know and indeed Simon and the Government knows, that you have to sign agreements with the different States and Territories, and if we can just take a moment to have a look at what the problem is that we are seeking to solve. The problem – one of the problems in the Australian education system is that we have a huge gap between the schools which are high performers and those which are lower performers. It's larger than the OECD average and it means that a child's postcode largely determines the quality of the education they receive. We believe that's wrong. And, of course, that means that you have to lift up some schools more than others and of course that means if everybody's starting at a different point then you need to sign different funding agreements with them.

EMMA ALBERICI: Simon Birmingham, can you understand how voters might look at you and think hold on, how can you find $48.2 billion to give to businesses in tax cuts, and yet you can't afford to keep funding the Gonski education reforms?

SIMON BIRMINGHAM: Well Emma what I know is that parents out there want a good education for their children, and they also want their children to get a job after they have finished school or university or their vocational studies. As a Government we have to get all of those priorities right. We are committing in this election campaign to keep growing school funding from $16 billion of federal funding this year through to more than $20 billion by 2020. Strong growth above inflation growth, above enrolment growth, but affordable growth for the nation. And yes, we are promising enterprise tax cuts, targeted at small and medium sized businesses, because we know we need to create more jobs in the economy. That we need to get businesses increasing investment levels, and we need to make sure that there are those opportunities in those jobs for children when they finish their education.

This is about getting the balance right and the real risk from Labor's approach, which, yes, is to spend more than us, but it is also to tax a lot more than us, is that you won't have those employment and job opportunities for young people in the future because our economy won't make the transition from the mining boom period into one that is much more diversified in the future.

EMMA ALBERICI: Kate Ellis, I saw you shaking your head there. I suspect you want a response?

KATE ELLIS: Firstly, I'd say if Simon and Malcolm Turnbull want to argue that cutting funds to our schools is good for the economy, then good luck with that.

SIMON BIRMINGHAM: [Interrupts]…It's not a cut Kate, it's growing.

KATE ELLIS: We know that's not the case. The Australian public are so sick and tired of listening to this Government say one thing in the lead-up to an election when it comes to schools and do another thing. We have just heard the minister talking about the need for funding to be tied to programs, but this is the very same Government that, after the election, wrote – they went out of their way to write to every State and Territory to tell them that they could spend their federal school funding however they liked and to quote Christopher Pyne, the minister at the time, to brag that this funding was no strings attached. They’re talking about tying it to programs but in reality, when it comes to schools, their track record is all the same. They will cut, they will lie before an election and as we saw from the Prime Minister a couple of weeks ago he tried to entirely walk away from federal involvement in public schools. The Australian public have a clear choice. If, like I, you believe that education is critical to the fairness of our nation, to equality and to our future economic growth, then the choice is clear that you need to support the Labor Party at the upcoming election.

EMMA ALBERICI: But Kate Ellis, this week Bill Shorten claimed Labor's education funding plan would provide an immediate 2.8 per cent boost to economic growth. Do you admit now that any benefit from an investment in schools will take many decades to realise?

KATE ELLIS: Chris Bowen was at the Press Club and he quoted an OECD report. It was actually Mathias Cormann who got it wrong and then it was wrong on the front page of The Australian the next day when he tried to mock the fact that having quality schools improves your economic growth by saying that the results would not be seen for 80 years' time. That is not what the OECD report said at all. In fact, it said that by the time that Mathias Cormann was talking about, there would be an 11 per cent increase in GDP if every graduate who was leaving school was getting a quality education with the skills that they needed for the jobs in our workforce, and that if every worker in the workforce today had a quality education through to Year 12, our economy right now would be 2.8 per cent higher in our GDP.

EMMA ALBERICI: Simon Birmingham?

SIMON BIRMINGHAM: Well, the OECD authors were very clear in their comments this week that more spending does not automatically equal improved outcomes, as was the Australian Council for Educational Research in a report released just yesterday which was very transparent and clear in its finding that we have increased spending in schools around Australia over recent decades, a sustained period of growth in spending in our school system yet our results have gone backwards in reading and literacy, they’ve backwards in numeracy and science, they’ve gone backwards in foreign languages.

So we are clearly not spending the record levels of funding going into our schools wisely enough. Kate wants to talk about lies in an election campaign, I wish that she would stop talking about cuts and reductions to schools and scaring parents and teachers and principals and school communities. The truth is whoever wins this election, funding for schools in Australia will continue to grow. I make no dispute about the fact that Labor is promising to spend more than us but we are promising and have budgeted for real growth in school funding in the future. What we believe is affordable growth that is budgeted and paid for and that we can deliver.

Most importantly, we are focused on how that funding is used. So we have outlined in our policies funding growth but tied to very clear and specific reforms that also we'll try to keep our best teachers in the classroom and get more of them into our most disadvantaged schools to close that gap between our best performers and our lowest performing schools.

EMMA ALBERICI: Kate Ellis you made an announcement today about improving teacher quality. What are you committing to?

KATE ELLIS: Well today we announced 25,000 scholarships to get STEM graduates – those who have studied science, technology, engineering and maths – to go on and study teaching and to take their expertise into the classroom. We know up to 75% of the fastest growing job sectors of the future require a background in these skills, yet the number of Year 12 Australian students who are studying STEM topics is declining. We need to fix it. And I think that Australian parents would probably be horrified if they knew the percentage of teachers in our secondary schools who are teaching these subject areas, that they have none of the necessary qualifications of themselves. We need people that are passionate about these issues and we need them to inspire our students so that we can increase the number of Year 12s studying STEM topics and we want to see every Year 12 student study a STEM topic.

EMMA ALBERICI: But it's one thing to get those people with expertise into the classroom. It's another thing to keep them there if you're not providing the salaries that are commensurate with what they might be able to achieve in the general workforce. Surely they could get better jobs in STEM given there are so few out there, better jobs in the private sector than certainly in education?

KATE ELLIS: Well, it's certainly true that we believe that we need to increase the value that we place on teachers across the board. They play such a significant role in our society, in our communities, and in our economy that we should value our teachers.

But also these scholarships are structured so that they will receive $5,000 at the beginning, but they'll receive $10,000 after their first year in the classroom. So there is a benefit financially to going into teaching.

EMMA ALBERICI: Simon Birmingham, a last word from you – improving teacher quality, it costs a lot of money, doesn't it, because in the end you need to be able to pay them commensurately

SIMON BIRMINGHAM: Well we do need to be able to reward our best teachers and that's why our policy paper details the fact we want all of the State and Territory and non-Government industrial systems to recognise our most capable teachers – those who under the assessments of the professional standards for teachers have been assessed to be ‘highly accomplished’ or ‘lead teachers’ and to financially reward those teachers for that assessment and then to provide transparency around how many of those highly accomplished and lead teachers are in different schools and incentives to get more of them into our most disadvantaged schools to help bridge that gap.

So we absolutely think rewarding the best teachers to keep them in the profession and to get them in the most disadvantaged schools is essential. We’ve also already in this term of Government been acting to get graduates of non-teaching disciplines who are high performers and high achievers into the teaching profession. Our funding of the Teach for Australia program has brought some remarkably bright and talented Australians in the maths and sciences disciplines, as well as in foreign languages, into the teaching profession and is making real differences there and we’re seeing strong retention rates from those individuals.

So there's already real action happening there. I'm concerned that the policy that Kate and the Labor Party have announced today sounds very much like the type of scholarship program they ran when last in government, which they then axed when last in Government because it wasn't making a difference.

EMMA ALBERICI: It's a conversation we'll have to take up again at another time hopefully throughout this campaign. Simon Birmingham, Kate Ellis, really appreciate the time you've taken to speak to 'Lateline' tonight.