Interview on The Conversation Podcast with Michelle Grattan
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

Michelle Grattan: Hello, I’m Michelle Grattan and this is the Conversation Politics Podcast. In this final week before the Federal Budget the Government has made major education announcements on the funding of schools and on the funding of universities and student debt. Today we’re joined by Education Minister, Simon Birmingham, to discuss the changes. 

Simon Birmingham, you’ve made big announcements this week in your portfolio. Did you learn from Christopher Pyne’s 2014 experience when radical university changes came as a shock when they were unveiled in the budget and got the Government off to a bad start?

Simon Birmingham: Michelle, I guess every government and every politician learns from watching predecessors in different ways and from my perspective I look back and I think one of the challenges in the 2014 Budget was that there were a lot of different pieces of policy reform all announced simultaneously, that it was difficult for governments to explain or the government of the day to explain the message around and the rationale behind them. Across both areas there’s a couple of things. We’ve gone through in university reform a very methodical process putting out a discussion paper before the last election that aired if you like all of the different options and scenarios very openly the potential for fee increases, the potential for efficiency dividends were all canvassed in different ways in that discussion paper that we took through the election campaign, got 1200 submissions, had an expert panel work with us, were very consulted even developed a package of reforms we’ve released and explained beforehand. 

In terms of schools funding I’ve met with David Gonski, members of his panel, I’ve had numerous discussions with state and territory ministers, with independent and non-government and Catholic school representatives and we’ve worked through again the issues there. Now, at the end of all of that does everybody like everything you decide? Not necessarily. But I think we’ve had a thorough process and we’ve got it out ahead of the budget to make sure we could explain the rationale behind the Government’s decision-making.

Michelle Grattan: Well, essentially you’ve moved to David Gonski’s model that he put forward in 2011 and yet the Coalition’s had a lot of backflips on this issue hasn’t it? It initially was very critical, then it embraced the Gonski approach and then it said we’ll only undertake that for a while. What’s moved you to this situation – has it been a change of heart or a desire simply to undercut the Labor Party?

Simon Birmingham: Michelle, I think if people- and I invite people to look back over some of my comments since becoming Education Minister 19 months ago, and I’ve consistently said that more money in and of itself doesn’t automatically make a difference and that’s correct which is why we’re getting a second piece of work done by David Gonski to say well how do we reform and improve the quality and outcomes in Australian schools. I’ve also consistently said that I respect David, that his report was an important piece of work, that its recommendations were far more than the Labor Party made out in terms of just spending more money on schools, they actually went to the core of how you distribute funding. And that last year when Malcolm Turnbull and I announced an extra $1.2 billion of school funding then, we said it would be distributed according to need. So I think my position has been quite clear there that I wanted to make sure we had a needs-based funding …

Michelle Grattan: [Interrupts] But not necessarily the Coalition’s position, that’s the point.

Simon Birmingham: Well I think my position as the Education Minister in my time has certainly been the Coalition’s position …

Michelle Grattan: [Interrupts] The second Education Minister.

Simon Birmingham: … and I’ve been in this position now for 19 months and again we’ve gone through the hard yards as I say of Malcolm and I spending time talking to David, getting an understanding of what the intent was behind his recommendations and then working through well how do we actually bring them to life with a true fair needs-based funding model and do so in a way that is equitable across states, across different schooling  sectors and I believe the outcome we’ve landed at that implements the thrust of David Gonski’s recommendations is transformative for our school systems.

Michelle Grattan: Now you want this review that David Gonski’s going to do to be into the quality of education into how to get better results from the kids than we’re now getting and as I understand it you want to tie agreement by the states to do those things into this funding deal, but how do you do that?

Simon Birmingham: We will seek to legislate the funding proposal and get that in place so that there’s certainty for schools and school systems next year and that everybody can know as will be the case right across Australia that they’re seeing in 9000-plus Australian schools the vast majority of them strong, real growth based on need for those schools.

Michelle Grattan: But then they’ve got the money …

Simon Birmingham: In terms of how we then go through with the states to make sure firstly, the first condition, that they maintain their real level of expenditure so we don’t see cost shifts that the Commonwealth spends more, they spend less in schools and no better off. So we’ll make that a condition within the legislation in terms of Commonwealth payments will require real levels of funding growth. And we’ll also be talking to the states about making sure that we have once David’s reported new school agreements that will also ensure there’s a level of conditionality around the funding that flows into those states. We’ll negotiate them with the states. We want to be partners with them. One of the reasons for getting David to commission and chair this new piece of work is that of course he has such credibility with state and territory ministers, with state premiers, with union leaders, that I hope and trust when he hands down a report in terms of school reform, they’ll welcome that as warmly as they welcomed his report on school funding. 

Michelle Grattan: Now, Tony Abbott has said that this didn’t go to the party room, that he anticipates debate in the party room, strong debate about it, and has really cast aspersions, I think, on the fact that schools will get less money. That’s the implication of what he said. What’s your reply to those points?

Simon Birmingham: Look, on the last point – and I haven’t looked too closely at Tony’s comments – but if there are suggestions around schools getting less money then I’d really be highlighting the fact that the Turnbull Government’s investing significantly more in supporting schools than would have been the case previously. Both our 2016 Budget and now our 2017 Budget have increased levels of school funding compared with where it was in 2014 or 2015. 

The second point I’d make is, yes, a handful of schools – 24 schools over the next couple of years – will see some reduction in their funding levels as we transition everybody evenly over a 10 year horizon towards a consistent approach to school funding. Now, it’s not easy to make that decision – Julia Gillard squibbed it, nobody’s done it before – but we should keep it in perspective, too. There are 9500 schools, nearly, in Australia and 24 will see some reduction in funding over the next couple of years. Others will see significant growth – some of them very significant growth, some of them double-digit growth, not just in the government sector, but also in non-government sectors – because we have a situation where non-government schools are treated inequitably relative to one another across the country, just as much as different state governments are treated inequitably across the country relative to one another in education funding. We want to bring that to an end and treat everybody consistently, but done so on a needs-based formula. 

Michelle Grattan: Now, the Catholics are obviously quite unhappy about aspects of what’s happened. Do you think that they are complaining about the money essentially, or do you think they’re complaining about feeling that they weren’t treated in a respectful way?

Simon Birmingham: If I look at the broad reactions to what we’ve done, the responses of people who are impartial stakeholders in all of this – commentators, experts, et cetera – has been really quite positive. The Mitchell Institute, the Grattan Institute, David Gonski himself, have all really warmly welcomed what we’ve done. A number of the independent school bodies have been positive, the Primary Principals’ Association has been positive, the State School Parents’ Association has been positive. So we’ve had a lot of positives there. 

Some of those who have a more vested interest in hanging onto special deals and special arrangements have been less positive. Now, I understand that in the end state ministers, paid lobbyists, their job is to try to extract the best possible deal for their state, their sector. My job as Australia’s Education Minister is to be able to withstand pressure from sectoral interests – be it a state or an individual sector – and ensure that we apply something that is fair and even-handed to the nation, and that’s certainly what our reforms do.

Michelle Grattan: So you don’t think that this argument about not being respectful enough is really the nub of the issue? You think they’re just after maintaining special positions?

Simon Birmingham: I have met with all of the different sectors, I’ve heard their arguments. We’ve discussed quite openly the areas of concern that I had with some of the previous special arrangements; I’ve heard their arguments in relation to that as well. Just because people may not like the final policy decision doesn’t mean that we haven’t considered their arguments and looked at it. 

The other point I’d emphasise here is that some of the critics – and the Victorian Catholic Education Commission is being quite a vocal critic, I’ve noticed – went out last year and said that funding growth of around 3.5 per cent for their schools was by far and away sufficient to keep up with, or be ahead of, the real cost growth in their schools. Well, for the Victorian Catholic Education Commission, our model delivers 3.5 per cent funding growth. There’s no reason for fee increases or concern because, based on their own benchmark that they set, we’ve met it. Across Catholic systems across other states, we see growth as high as 4.5 per cent per student in Tasmania, again because they’ve been treated inequitably compared with, say, a state like Victoria. So we’re transitioning them all to be funded on a fair, even, consistent platform. 

Michelle Grattan: How come the Catholics did get better deals?

Simon Birmingham: Well that’s a question, I guess, for previous governments to have to answer. 

Michelle Grattan: What do you know about it?

Simon Birmingham: Look, I imagine that lobbying power or other things- there’s, I guess, a long history of school funding in Australia and it’s constitutionally the responsibility of state and territory governments. The Menzies Government made the right decision to back parental choice in Australian schools, and began a process of properly funding non-government schools. And that’s an article of faith for the Liberal and National parties, and it’s one that this model absolutely backs in, because what it does is it supports parents to choose where they want to send their child. If they want to send their child to a non-government school then they receive support for that; if they are from a low socioeconomic community they receive more support for it based on their family need; if they’re from a higher socioeconomic community they receive less support for it based on their need. But altogether, this is a model that will ensure Catholic, independent, whatever faith, non-faith, for a non-government school people will be able to get funding support, just as we are increasing, of course, funding support into the government sector as well.

Michelle Grattan: If we can turn to the university changes, students are going to be hit with higher fees, they’re going to have to repay their debts sooner. Now, is there an argument here to say that, at a time when young people are finding it quite hard to get the money together to buy a house and have trouble in some cases getting jobs, this is really a tough extra burden?

Simon Birmingham: Look, I hear those arguments and I’m far from unsympathetic to concerns and cost pressures that exist, but I’m also confronted – and the Government’s confronted – with how it is we maintain a far bigger university system with far greater university access today than has ever been the case in the past, that’s seen more than 30 per cent growth in student numbers, that’s seen more than 70 per cent growth in terms of the revenue from government for teaching and learning operations in universities over a period of time. We’ve really got a significant issue in terms of the financial sustainability of government funding into the university sector. 

Now, our universities have done a great job of achieving economies of scale with their growth in student numbers, they’ve done an outstanding job of managing their finances. And what we can see is that, with the growth in revenue they’ve had versus their cost growth, there is room for them to be able to absorb an efficiency dividend, and that’s the type of measure that we’re applying.

Michelle Grattan: What was your own situation? Did you go through university when there was …

Simon Birmingham: [Interrupts] I’m a post-Dawkins reform student. So yes, I went through under the HECS system, as it was known.

Michelle Grattan: Fees were pretty low.

Simon Birmingham: Fees were different then. Fees haven’t changed at all for about a decade, and our proposal in terms of fees will increase them by 1.8 per cent per annum for a few years. And the result of that is that the taxpayer will still be paying around 54 per cent of student university costs on average, plus subsidising, then, the student loan scheme that’s available that ensures that nobody, regardless of their economic or social circumstances, has to pay one dollar upfront to go to university.

Michelle Grattan: Just to dwell for a second on your own experience, what was your attitude to HECS at the time?

Simon Birmingham: Well, I’m not sure that I was in love with it, but equally, look, I am here today 20-odd years later and having been through a Masters course while I was working, where I paid upfront fees to undertake my Masters degree out of my salary that I was earning at the time. So I appreciate that nobody likes having to pay for those things but you do it, or you go through under the HELP scheme nowadays and defer all of your costs because you believe and know that a university education is worth it – and it is still worth it. The employment outcomes for graduates, the income outcomes for graduates, are still higher than for non-university attendees across the Australian population.

Michelle Grattan: In terms of getting these measures through the Senate, you’ve got some encouragement from the Greens – which is an unlikely source, one would have thought – on the schools program. Senator Xenophon says that his team will want briefings and they’ll make up their minds then. Do you think you have a very good show of getting this through?

Simon Birmingham: Look, I hope that the merits of the argument convince. I hope the Labor Party has another long hard look at this and think about the circumstances, because right now what they seem to be saying is they would rather leave in place arrangements that leave all of the disparity there, and that, in terms of ongoing indexation, will be what happens in the Australian Education Act is as currently the case. Whereas with the reforms we want to put through, we’ll ensure that state systems actually have better growth than what the status quo would be. The alternative is a much better alternative, and if the Labor Party wants to go to the next election promising even more money that’s their business, but they shouldn’t stand in the way right now of reform that will increase investment and will fix a bunch of broken models.

Michelle Grattan: And on the universities and on the schools, are you willing to do some, at least, limited trading to get them through?

Simon Birmingham: The Turnbull Government’s been pragmatic, I guess, in its dealing with the Senate, particularly since the last election, which is how we’ve managed to get $25 billion of Budget savings and significant reforms, whether it’s in my portfolio in getting rid of the old VET FEE-HELP scheme or putting in place a new childcare model for payments in the future. So we’ve shown a pragmatism in dealing with the Senate. Of course, we believe that the reforms we’re putting up are carefully thought through and we hope that people will support them on their merits as they stand, but I’ll talk to all Senate parties just as I talk to all stakeholders.

Michelle Grattan: And just finally, are you now done for the Budget or will we see more education stuff there?

Simon Birmingham: Today we announced an extension of the Universal Access Agreement for early childhood education for preschool, so another step in terms of the education portfolio. I think you can say with the universities, schools, preschools, child care, all largely done that there’s not a lot left in the education portfolio, but everyone will have to wait for Budget night.

Michelle Grattan: But what about vocational education? Can we expect something there, even if you won’t be specific?

Simon Birmingham: Well, Michelle, it would be very irresponsible for me to be drawn on Budget speculation – nice try though.

Michelle Grattan: Well, you are getting it all out beforehand. Thank you very much Simon Birmingham for talking with us today, that’s all from today’s podcast.