Interview on ABC Statewide Drive Victoria with Nicole Chvastek
Turnbull Government’s plan to transform schools; Delivering real needs-based funding and fixing Labor’s model; Higher education reforms to drive better outcomes for both students and taxpayers; Turnbull Government’s support for regional students

Nicole Chvastek: Well do you remember, not so long ago, Australia’s Education Minister famously admitted that there were some private schools that were getting just too much funding? Do you remember that? I think it was on Q&A and it sounded like this.


Tony Jones: Does that mean that you are saying some schools could be worse off or will be worse off?

Simon Birmingham: That is possible, because under the arrangements we have, some schools who are notionally overfunded under the model – the 27 different models we have – some schools that are notionally overfunded, take more than 100 years to come into alignment with the current funding model. That’s the deal that Penny’s Government did. So now I …

Tony Jones: [Talks over] So can I just confirm this? The ones that are overfunded, you must have a list of them, do you?

Simon Birmingham: [Laughs] If you want me to create a hit list or something tonight Tony, that’s not about to happen. 

Tony Jones: But do you know that some schools are overfunded?

Simon Birmingham: We do, Tony. 

[End of excerpt]. 

Nicole Chvastek: That is the Education Minister several months ago admitting that some private schools were just getting too much funding. Well a day after announcing university funding cuts, the Prime Minister has dramatically declared that the perennial fight for school funding will come to an end in a policy turnaround that will see the Federal Government pump an extra $19 billion into schools over the next decade. 


Malcolm Turnbull: In the interests of our children and our grandchildren, the time has come to bring the school funding wars to an end. Today we’re announcing that every school will receive Commonwealth funding on a genuine needs basis. 

[End of excerpt]. 

Nicole Chvastek: The Minister says that this means regional Australian are winners. However, the State Government says every school in Victoria will be worse off under the funding scheme announced by the Commonwealth. 


James Merlino: The reality is, Victorian schools- every Victorian school, every Victorian student, will be worse off. 

[End of excerpt]. 

Nicole Chvastek: Simon Birmingham is the Education Minister. Minister, good afternoon. 

Simon Birmingham: Good afternoon. Good to be with you. 

Nicole Chvastek: Is James Merlino right?

Simon Birmingham: No, he’s dead wrong. He’s dead wrong because he’s trying to create some sort of mythical scenario where the Labor Party’s election promises are what funding scenarios might’ve looked like into the future. Whereas what we’re trying to do is actually fix a hotchpotch arrangement of 27 different funding models that are based on ancient sweetheart deals and stitch ups that were negotiated between states and sectors and others in dealing with previous Commonwealth Governments and get everybody to transition to a common, needs-based, sector-blind approach to funding schools, the likes of which David Gonski recommended, which was why he was standing there with us yesterday. 

So in terms of Victoria. What does it mean for Victorian schools collectively? It means there’ll be around $278 million of extra funding going into those schools, we estimate, next year. That keeps going up, $291 million the year after extra, $317 million. And these are figures on top of the previous ones so that over a four year period, we’ll see around $939 million extra into Victorian schools. Most of that goes to- well the majority of that goes into government schools and then we have growth into Catholic schools and independent schools, which is also quite strong over that period of time. So this idea that Victorian schools or any school, aside from the 24 we have acknowledged across the country, will go backwards, is quite ridiculous. We’ll have 24 going backwards, 9,000 plus seeing growth in their funding above inflation, above wages growth. Real growth that allows them to do additional things to support their students. 

Nicole Chvastek: James Merlino says that Victorian schools will receive more than $500 million less each year, compared with the original agreement. So there’s no debate over the fact that Victoria will get some extra money, but it’s less than what we were intending to get. 

Simon Birmingham: Well I hear a lot of the language that is used at times that seems to create an impression that there will be some cut in funding, reduction in funding. Victoria’s going to go for the government school students, from $1.53 billion of federal funding this year, to $1.66 billion of federal funding next year – an extra $125 million for government school students. 

Nicole Chvastek: [Talks over] But we were supposed to get more. 

Simon Birmingham: So for four years, per student, there’ll be 5.4 per cent growth, per student, in Victorian government schools. Now that’s way above what I suspect most of your listeners household income is growing by at present in a period of very low wages growth, very low inflation.  We’re committing to a 5.4 per cent growth rate. But more importantly than what the particular growth rate for one particular state and one particular sector is, what the Turnbull Government’s committed to do is clean up the mess of federal school funding in Australia, where a school in Victoria receives a different amount compared to a school of identical need and student cohort in another state of the country, just because of different deals that were done. Instead we want to transition to an environment that does what David Gonski actually recommended. Julia Gillard didn’t do that. She stitched up a bunch of deals around the country instead. We are going to make the big decision, the tough decision, to actually transition over 10 years to a common, national, needs-based, sector-blind arrangement for funding Australian schools. 

Nicole Chvastek: Kevin Donnelly, independent education commentator, says that this will particularly hit small regional schools, particularly Catholic schools. He says these aren’t huge fee attracting schools. In some rural communities, a small parish school is the only school in town. And this will disproportionately disadvantage those schools. Here’s what he told The World Today. 


Kevin Donnelly: The real problem here, as you mentioned, are the low fee paying Catholic schools in particular, but also some independent schools that are serving remote or rural, or country areas. There are many of these schools that do not charge high fees and they’re serving communities that are not privileged. And the danger with the Government’s model, funding that they’re bringing in- the Commonwealth model, is that it will further disadvantage those schools by adopting an approach to funding which I think is flawed and which really doesn’t go to the issue of what is the most effective way to raise standards. 

[End of excerpt].

Nicole Chvastek: Minister, what’s your take on his criticism?

Simon Birmingham: Well let’s look at the facts again in relation to – and Kevin’s focusing there particularly on small Victorian Catholic schools. The Catholic school system across Victoria, under our estimates, will see per student funding growth of 3.5 per cent. So the idea that there’s again a cut or a reduction in funding is clearly not there.

Nicole Chvastek: [Interrupts] Yeah but there are schools which will have their funding curtailed over time. 

Simon Birmingham: If I could complete the answer, that’s growth of $375 million across the Victorian Catholic Education Commission over the next four years. Now in terms of small schools in rural and regional areas: the whole point of having a needs based arrangement, is that additional funding flows to the schools who need it most. How is that done? It’s done through the application of different loadings – loadings that target students from low socio-economic backgrounds. Which of course is often in parts of regional Australia and regional Victoria. Targeting small rural and regional schools themselves for loadings, recognising that there are additional costs that come with operating a regionally based small school, because you don’t have the economies of scale that come from larger city environments. Ensuring there’s extra support for students with a disability, for students from Indigenous backgrounds. The types of examples that were just given in that interview are exactly the types of schools who should benefit from the type of needs-based model that we’re introducing. 

Nicole Chvastek: Minister, Stephen Elder, who is the Executive Director of Catholic Education Commission, says that $78 million will be stripped out of Catholic schools, because of the move to weighted averages. And he says that there are a number of schools around regional Victoria who will have to increase their fees because of this. 

Simon Birmingham: Once again, why it is that a school would need to increase its fees, when the Victorian Catholic Education Commission will see strong growth in their funding – growth of $86 million next year, $88 million the year after, $96 million the year after that, $103 million the year after that? I mean this is very strong growth. It’s growth on a per student basis at 3.5 per cent. 

Nicole Chvastek: But it’s not as much as they were expecting. 

Simon Birmingham: It is strong growth of 3.5 per cent, per student, per annum, across Victorian Catholic schools. That is, over a 10 year period, growth of around $3424 per student. I think your listeners would think that the idea that is going to necessitate fee increases, really defies the credibility test. Now ultimately that’s a matter for the Catholic education system as to how they run their model. What we are implying is a model that treats Catholic schools, independent schools, exactly the same way. No special deals for anybody, but a model that is built from the ground up, based on student need and applied consistently right across the country. 

Nicole Chvastek: I’m speaking to Simon Birmingham, Education Minister in the Federal Government. Minister, you announced funding cuts to the university sector one day and then $19 billion for school funding the next day. Is this a zero sum game where you effectively rob Peter to pay Paul? Because there have been some complaints from regional universities that this will lock-in poverty for regional students. In fact the Deputy Vice-Chancellor from Federation University, told us this yesterday. 


Marcia Devlin: On the one hand there’s rail links being invested in regional areas and on the other hand regional students will not be able to go to university if these fee hikes happen. So it’s a disaster on a number of levels do this in regional areas. I think they’re just not in touch with the reality of particularly regional student’s lives and the difficulties and the strains they go through. So we are going to leave a generation – if this goes ahead, in the regional areas in particular – who don’t have opportunity and they can’t get themselves out of poverty and they can’t improve their lives. 

[End of excerpt]. 

Nicole Chvastek: That is Marcia Devlin, the Deputy Vice-Chancellor at Federation University. Minister, she says that effectively the cuts to the university sector and the increase in fees will be locking regional students into poverty.

Simon Birmingham: Well I reject that entirely. What we are proposing are some modest changes in relation to higher education policy, changes that in terms of universities recognise the fact that university revenues from teaching and learning grants have grown by 15 per cent over the last eight years, whilst their cost base has grown by only about nine per cent. We think that at a time of federal budget pressures it’s not unreasonable that universities if they’ve gained from the 30 per cent plus increase in student numbers, some efficiencies are expected to make some contribution as taxpayer funded institutions to share those efficiencies back with the taxpayer to deal with and reduce the levels of debt. 

In terms of making our student loan system more sustainable, and Australia has one of the most generous student loan systems in the world. Across the ditch to New Zealand and you find that students are repaying their students debts at around $19,000 of income. We’re proposing here in Australia to have a $42,000 repayment threshold. Well above, more than double what New Zealand has and what we’re proposing is a new rate for repayment of just one per cent of that $42,000. So a graduate earning $42,000 would be asked to repay of their student debt around $8 per week.

Nicole Chvastek: If you want to gain extra revenue why would you take it from students who are not the economic powerhouses of the nation, why wouldn’t you go to say the energy giants, some of whom are paying no tax whatsoever?

Simon Birmingham: Our government has undertaken a range of reforms to deal with things like multinational tax evasion which will generate billions of extra dollars in revenue into the Government over the next couple of years. We want to …

Nicole Chvastek: [Interrupts] So not why not leave the students alone?

Simon Birmingham: We have a student loan debt in Australia at present of around $52 billion and on current estimates around one-quarter of that will not be repaid under the current settings. Now that’s not a sustainable situation and my fear is that in future years the whole concept of our student loan system would come under threat if we allowed that to balloon out. The student loans are critical because they are what enable people from any financial background or social background to go to university without paying one dollar up front. It’s an empowering mechanism to have that student loan system there but it’s got to be something that actually sees the vast majority of the loans repaid and that’s why we’re recalibrating those settings and as I say for the new threshold of $42,000, not only is it well above international standard but it is a very modest repayment rate of just $8 per week for a graduate.

Nicole Chvastek: Minister, you made these changes based on a study which indicated that universities incomes were growing and they were exceeding their costs. How many regional universities were included in that study?

Simon Birmingham: It was a representative study of Australian universities. I can’t tell you off the top of my head how many regional universities but it absolutely included …

Nicole Chvastek: [Interrupts] Because regional universities don’t generate the same sort of profits as the sandstone universities.

Simon Birmingham: It absolutely included regional universities. I know some of our more profitable universities just at present are a couple of the regional universities. So there’s been huge growth in terms of student numbers in those universities as well. And what this study really showed and helped to demonstrate was that with that growth in enrolment numbers of 30 per cent plus across the nation over the last eight years or so, universities have generated economies of scale that have created efficiencies within them. Now that’s a good thing but at a time when we need to work to bring the budget back to balance, it’s not unreasonable if there are efficiencies in taxpayer funded institutions that they contribute to them. 

But it’s not just- our university reform proposals haven’t just been about those budget sustainability measures. We’ve also said importantly for regional Australia that we’re going to expand opportunities for universities to offer one and two year diploma and associate degree courses which can really transform the opportunities for people to be able to get a worthy qualification linked to industry and skills training in many instances that they can achieve in a shorter period of time with lower student debt than three or four year bachelor degrees entail. We’ve also said that we’re going to support the establishment of up to eight new regional university hubs around Australia, facilities that will bring the best of technology and personal human tutorial services in a collaborative environment with a cluster of universities offering courses through major regional centres that don’t currently have any university present at all.

Nicole Chvastek: [Interrupts] And do you think regional students will be able to afford to pay for those services?

Simon Birmingham: They will because we are preserving the student loan scheme that ensures nobody who’s admitted to university need pay a dollar upfront. That’s the driver of equity in this arrangement.

Nicole Chvastek: Minister, thank you so much for your time.

Simon Birmingham: Thank you. A pleasure.

Nicole Chvastek: Minister Simon Birmingham, who is the Education Minister.