Fran Kelly: Australia’s largest Muslim school may be forced to close after the Federal Government revoked $19 million in annual funding. Located in south-western Sydney, Malek Fahd is one of six Islamic schools under review due to financial mismanagement and governance failures. The Education Minister Simon Birmingham is in our Parliament House studios.

Minister good morning, welcome to Breakfast.

Simon Birmingham: Good morning Fran, great to be with you.

Fran Kelly: Malek Fahd in Greenacre has over 2000 students, it’s quite a big school. You’ve announced that you’re going to stop its funding, its federal funding, from 8 April. That’s $19 million a year, it’s a pretty big step. Why are you doing this?

Simon Birmingham: Well Fran we have very strong standards in place which we expect of all schools in receipt of federal funding. Those standards require schools to operate on a not-for-profit basis, to dedicate all funding received to the benefit, welfare, and educational advancement of the students, to ensure that they are independent in their operations. And so all of those factors are matters that have been weighed up since then department launched its investigation into six schools that are associated with AFIC last year. This is a conclusion of one of those investigations in relation to the school in New South Wales, Malek Fahd, and unfortunately it’s been found that the processes the school has in place do not meet the high standards that we expect, and therefore this decision has been made. 

Fran Kelly: So what standards, can you be more specific? What standards aren’t being met, what lack of independence is there, what did you formal review find?

Simon Birmingham: Well the review does look very closely at the governance structures of the school, whether the school board or at least the board of the approved authority to receive the funds is independent from any other entity, and there are concerns about that. It equally has a very close look at matters in relation to how the funds are used and whether those funds are used exclusively for the school, and again, there are concerns that exist in those areas. Now I don’t want to go …

Fran Kelly: [Interrupts] Can you tell us more about that? Because I mean is basically what you’re saying is this school has been getting $19 million a year from the Federal Government for schooling, but some of that money is being funnelled off somewhere else, it’s got nothing to do with education. Is that what you’re saying?

Simon Birmingham: And Fran there’s a limit to how far I want to go, because there is an opportunity for the school in question to appeal the decision …

Fran Kelly: [Interrupts] But you’ve taken a major step here, so …

Simon Birmingham: … and of course a high possibility they may do so.

Fran Kelly: But you’d think- most people would think that the Federal Government wouldn’t do this lightly, and it’s got to be linked to misappropriation of funds. 

Simon Birmingham: It’s certainly not done lightly, and we do consider this to be a very, very serious step. We have undergone a very thorough investigation. This is a decision that is undertaken at arm’s length from me as the Minister, or any political process, so the decision …

Fran Kelly: [Talks over] Who did it? What is that process?

Simon Birmingham: … the decision is a departmental delegate who undertakes the assessment and makes that final determination.

Fran Kelly: There are six …

Simon Birmingham: [Interrupts] The school now has an opportunity to seek an internal review within the department, so a further or senior departmental official can consider the matter, and the school of course then has recourse either to the Administrative Appeals Tribunal, or ultimately to the courts.

Fran Kelly: Okay. There are six Muslim schools under review, including Malek Fahd, though you haven’t taken the step with the others yet. The schools are in Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. They’re all run by the same body, AFIC, the Australian Federation of Islamic Councils. Is financial management a concern amongst all these schools?

Simon Birmingham: Financial management and governance protocols were a concern that caused us to initiate the review across all six schools. All schools were given the opportunity to respond to the concerns of the department, and to outline how they would address those concerns. And the department is carefully going through each of those responses before reaching a determination. It would be inappropriate …

Fran Kelly: [Interrupts] Is the issue with the Federation? Is the issue with the Federation of Islamic Councils that runs the schools, or is it at the financial management at the school level?

Simon Birmingham: Well, AFIC does not actually run the schools Fran, or it should not be running the schools. The schools have their own individual approved authority who is meant to be, and who is the authority that we pay funds to for the support of those schools. And that authority is meant to operate independently for the exclusive benefit of those schools. So these are not in that sense AFIC schools, although that is often written up in that way. 

Fran Kelly: Right.

Simon Birmingham: And certainly though a matter that has been explored through these investigations is the independence of those individual approved school authorities from any other external organisations.

Fran Kelly: Is the suggestion that the school authorities are being influenced, what, in the direction they take, or the way they spend their money, or that money has to come back to the parent body if you like, AFIC?

Simon Birmingham: Concerns exist about the independence of board members, those board members being independent and therefore the good governance of the school and the welfare and educational benefit of the students, and indeed to the utilisation of some of the funds in question.

Fran Kelly: I know that you’re limited in what you can say because of appeals, but I’m just trying to get a handle on the issue. If the issue is the independence of board members, is the suggestion not that the money’s being funnelled into someone’s pocket or anything like that, but perhaps the proper emphasis and all the resources aren’t being spent on educating the students? Is that the issue? And if so, where else- how else could it be being spent?

Simon Birmingham: Fran, it could be that funds are not exclusively used in the school environment for the school, and that is a matter that’s being investigated. So as I said, it’s a matter in part of the independence around the governance protocols, and then the direction and utilisation of the funds. Now, I think people will obviously draw conclusions from those two areas of investigations that have been a particular focus of what the department has had a look at, but I can’t go into the specifics of each individual allegation or suggestion at present, because that is a matter that we need to give the school, and the approved authority for that school appropriate appeal procedures that they can manage to pursue.

Fran Kelly: I understand. It’s a sensitive time, isn’t it, relations with the Muslim community at the moment are a bit strained, or certainly a lot of money and effort is being spent on trying to make them better. Are you concerned that this decision is open to misinterpretation, that Muslim Australians might be feeling picked on, singled out?

Simon Birmingham: Well the department has undertaken similar initiatives in the past in relation to other non-government schools who are of different denominations or faiths. So, this should not be seen as purely a matter relating to Islamic schools, this is a matter that relates to school governance and school accountability. But I do appreciate that there are sensitivities in the community at present, and what I would urge all parties to do, especially those other five schools, is to work cooperatively, as a number of them have been doing, with the department. We want to make sure that these independent non-government schools are afforded all the same opportunities, but also all the same rights and responsibilities as every other independent non-government school. 

Fran Kelly: In the meantime, if this goes ahead, the government says after 19 April the $19 million of federal funding will be withdrawn. Presumably the school can’t keep functioning. These students are broadly the responsibility of the New South Wales Department of Education, what happens to them if Malek Fahd is forced to close?

Simon Birmingham: Well yesterday in addition to speaking to my Opposition counterpart and ensuring that local MPs were all given the opportunity to access departmental briefings, I did speak with the New South Wales Education Minister, Adrian Piccoli. They have been well informed through each step of these investigations and are well aware of that. They have been giving consideration to what necessary contingency arrangements may need to be in place, and I am certainly confident that if the school were to close at some point in the future those students would be able to be accommodated in other schools. We’ve also been in discussions with the other non-government school sectors and representatives in New South Wales, the Independent Schools Council and the Catholic Education Commission, to make sure that all bases are covered and all parties are willing to work cooperatively if we do have a situation of school closure.

Fran Kelly: Yeah, it’s going to be tricky at the school for now I’d imagine. It’s 14 past eight.

Simon Birmingham: And the students must be put first in those instances of course.

Fran Kelly: Simon Birmingham is the Federal Education Minister. Can we speak about school funding now. Labor and the states too say that the Government will spend $30 billion less over 10 years than Labor was promising when it was in government, and the premiers, some of them, have been pushing for a rise in the GST to help meet that shortfall. That seems to be off the table? Some of the premiers and chief ministers will meet tomorrow to come up with a new plan.

I know that you have been visiting some of the schools and looking at first-hand seeing what the Gonski funding reforms have done with schools. Are you convinced of the value of the Gonski funding?

Simon Birmingham: Well Fran I think what we should import- should define first is that school funding is at a record level, and it will continue to grow. Now there is a policy differential between ourselves, the Turnbull Government, and the Labor Party about how fast school funding will grow in the future. Labor are out there promising some $37 billion of extra spending over the next decade; we have serious reservations about whether or not that is affordable. But everybody should know that this is not a question of school funding cuts, this is about how fast funding grows off of what are already record levels.

Fran Kelly: I think people understand that and it’s the extension of the Gonski funding reform when a lot of it kicked in in those out years, so no one is expecting you’re going to cut the money, you’re just going to cut what they were expecting and what Gonski says is needed. But and your refrain is that well it’s not all about money it’s about teaching, but if I can quote for you some of the findings of the PISA test that have just been released. A report showed that family income has a bigger impact on academic performance in Australia than in most other developed countries, so students from low income backgrounds are not getting the education they deserve. Isn’t that more proof of the argument for the continuation of the Gonski needs-based funding to make education standards equal for all?

Simon Birmingham: It’s absolutely proof of a couple of things Fran. Yes, that we need to make sure that funding is directed on the basis of need, and I am determined to ensure that school funding arrangements from 2018 onwards within whatever envelope of funds are available are best targeted to those who are most in need. So I have no qualms about that, and they’re discussions that I have had with numerous individuals, including David Gonski, and they’re discussions that will certainly continue into the future. It’s also a demonstration, when you see that decline in relation to school performance, that funding is not necessarily the answer. Because we have seen, as I said before, growth in funding to record levels; in fact since 1988 the state and federal contributions to school funding in Australia have doubled in real terms – real terms, taking inflation into account – yet enrolments have only gone up by 18 per cent in that time. And yet we have this decline in terms of performance and outcomes in literacy, numeracy, science. That’s unacceptable, but we can’t kid ourselves and say that more money is automatically the answer, when throughout that timeframe of declining results we have been spending ever more money year on year. So we do have to look at issues of teacher quality, ensuring the curriculum is well developed and appropriate, getting parents more involved and engaged, especially from the early years in their child’s education, really lifting those outcomes.

Fran Kelly: Okay.

Simon Birmingham: Now there are some very good things happening in schools around the country, and the reason I emphasise the point that the debate we have at present is about the rate of growth in school funding rather than cuts, is because due to Labor’s misinformation campaign there are schools who are concerned that they could see a reduction in funding in future years. Well that is not the case. Funding will keep growing, and for those who are doing good things with the record funding they are getting right now, that is the benchmark on which funding will grow in the future. We just don’t believe that the nation can afford the type of largesse Labor is suggesting at present.

Fran Kelly: Alright Minister, just one final question. Your colleague, Human Services Minister Stuart Robert’s in the spotlight, Bill Shorten earlier saying there’s serious questions about his conduct in that trip to China when he was the Assistant Defence Minister. Did he do the wrong thing by attending a signing ceremony in China for an Australian mining company whose owner is a friend and a generous donor to the Liberal Party?

Simon Birmingham: Malcolm Turnbull expects high standards of all of his ministers, and has upheld high standards of all of his ministers to date. He also applies a very independent and proper process over these matters. And in this case the Independent Secretary of the Department of Prime Minister and Cabinet has been asked to have a look at these allegations, and to consider whether or not any breach of the Ministerial Code of Conduct has occurred. And that’s the …

Fran Kelly: [Interrupts] Would you have done that? Would you have gone on that trip, and gone to that signing ceremony?

Simon Birmingham: Well I don’t know all of the circumstances, but Martin Parkinson, as Secretary of the Department of Prime Minister and Cabinet, I have complete faith will get to the bottom of the matter, will be able to assess all of the circumstances, and ensure that the Ministerial Code of Conduct is upheld, and that natural justice is afforded to Mr Robert.

Fran Kelly: Simon Birmingham, thank you very much for joining us.

Simon Birmingham: A pleasure, Fran.

Fran Kelly: Simon Birmingham is the Federal Education Minister. 

Senator Birmingham’s media contact:                  James Murphy 0478 333 974
                                                                                    Nick Creevey 0447 644 957
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