David Speers: As we saw on Friday after the COAG Leaders’ Meeting, the Prime Minister withdrew his policy proposal to allow the states to raise their own income taxes. What’s been left unresolved, though, is where the Government now wants to go on education funding in particular. Public schools: does it want to continue playing a role as a Commonwealth in contributing to the funding of state schools? The Education Minister Simon Birmingham joins me now from Adelaide. Minister, thank you very much for joining us, and before we get to public schools, can I start with higher education? Because this is a little confusing as well. You’ve now been in the job some seven months. When are you going to unveil your plans for the higher education sector?

Simon Birmingham: David, we have plans and policies that are in the Budget in relation to the higher education sector. They’ve been the Government’s plans and policies for some period of time. I’ve been clear to the sector that I am willing to work with them in relation to areas where we can refine or improve those plans, where we can make sure that we get the policies better to incentivise innovation in higher education and to meet important budget sustainability targets. The growth in higher education spending over the last 20 years or thereabouts has essentially gone at double the rate of the growth of the economy, so that’s not, of course, a sustainable financial trajectory for higher education to continue on. So we have a financial challenge to meet. We have a commitment to make sure that higher education is innovative and part of the change in our economy in terms of making sure that they really are responsive to what students, employers, and the new job market will need in the future. We do have policies that have been laid out there. We’re willing, though, to work with the sector to improve those policies, and that’s certainly what I’ve been seeking to do and what we will take through the election campaign.

David Speers: Let’s just be clear on this, because when you took the job you said you’d consult with the sector. You shelved Christopher Pyne’s deregulation plans, but from my understanding you only said funding would be normalised for this year that we’re in now, 2016. Are you saying that from the end of this year, funding continues along the same lines, or will there be a change next year?

Simon Birmingham: Well no, David, we only ever said that we were deferring implementation of those reforms by 12 months. That is what’s reflected in the Mid-Year Economic Update. That’s been crystal clear ever since I made that announcement, and that remains the Government’s position unchanged.

David Speers: [Talks over] Which means there’s a 20 per cent funding cut for universities in those Budget papers, the MYEFO at the end of last year. The 20 per cent funding cut remains in your forward estimates, is that right?

Simon Birmingham: And as I said to you before, that is recognising the fact that over the recent history, we’ve seen growth in spending on higher education run at twice the rate of the general economic growth. So there is a real financial sustainability problem there.

David Speers: [Talks over] So you do still want a 20 per cent funding cut?

Simon Birmingham: We still certainly want to find savings in higher education. We know that we have to make sure that that is done in a way that doesn’t stop universities from accessing the funding they need to be able to provide high quality education, high quality research, and contribute to Australia’s future, which is why this is not just a funding cut. It is a reform program, and a reform about making sure that we inspire innovation and transparency in universities around what it is they’re offering their students as well as of course looking at how we can be more financially responsible.

David Speers: All right. But- 20 per cent funding cut certainly fits with the live within our means line of the day, but how does it fit with the other Turnbull Government-favoured line of transforming or transitioning from the mining boom to the ideas boom, being agile and innovative, if you’re taking that much money away from universities?

Simon Birmingham: We’re not taking money away from universities in terms of what they overall have to spend. There is an argument to say that you need to have a look at the balance of what students contribute versus what the Government contributes. We have one of the most generous student loan schemes in the world, and one of the most accessible higher education sectors in the world, and I don’t want to see either of those things damaged or changed. So we firmly stand by the principle that students should access higher education without having to pay upfront fees. They should be able to defer their contributions, but whether they pay closer to 50 per cent of the share of the cost of their degree rather than 40 per cent of the share of the cost of their degree is something that is open for discussion and is a worthy way of looking at whether we can provide that generous high quality access to tertiary education without continuing to erode the Budget position.

David Speers: [Talks over] So how long did this discussion go- will you be clear in this Budget that’s coming up in one month, or indeed before the election, what you’re going to do?

Simon Birmingham: David, we are quite clear. There’s a Budget task to be met. There are reforms on the table. We’re willing to negotiate changes to those reforms and consult on changes to those reforms.

David Speers: [Talks over] What’s your timeframe?

Simon Birmingham: But we do have to meet that. Now ultimately, that depends on when the election is and what the legislative possibilities around that are.

David Speers: [Talks over] Well, we’ve got a Budget in a month. Will it be in the Budget?

Simon Birmingham: Well, there will certainly be higher education policies reflected in the Budget.

David Speers: So we’ll know what students are being asked to contribute after this year in this year’s Budget?

Simon Birmingham: The Budget parameters for higher education will be clearly reflected in the Budget. Ultimately, any of these things require legislation, and that’s why I want to make sure that I work through a cooperative process, so that the next time we bring legislation to the Senate, we actually do have broad public understanding of why these reforms need to be instigated – to deliver on innovation, to deliver on the financial sustainability objectives we have – and the best possible chance of securing support to actually bring them into law. There’s no point continuing to just say this is…

David Speers: [Talks over] Okay. No, that makes sense. That makes sense, but I’m just wanting to establish…

Simon Birmingham: [Talks over] No no David, David, Da- no no David, David, but this is a very important point.

David Speers: [Talks over] Okay.

Simon Birmingham: There is no point just continuing to say this is it in a rigid way, we’ll keep putting up to the Senate and being defeated. I actually want to make sure that I work through those processes and I will continue to have an open mind as we go through them – right through the Senate legislation if need be – so that we actually bring finality to this process and long-term certainty to universities and students.

David Speers: All right, let me turn to school funding, and let’s cut to the chase on this: do you believe the Commonwealth should no longer fund public schools?

Simon Birmingham: Well the Commonwealth will continue to support public schools; the Commonwealth provides significant support via GST payments, other grants to states and territories, but it should be clear to everybody the Commonwealth does not make a decision of what money goes into any government school in Australia. So state and territory ministers make determinations about what the local primary school or high school down the road actually receive. We provide them with some funding that is notionally identified for schools, but they then recalibrate that and often give quite different amounts to those schools, because they already have complete autonomy over that.

Now what we were talking about last week was whether, rather than having the debate we have at present, which is where there are continued squabbles over how much everybody puts into the public school system, wouldn’t it be better if parents around Australia, if mums and dads around Australia, if they had a complaint about the funding of their local school knew entirely which level of government to blame, to complain to, to agitate for, rather that watching essentially a buck passing between the two levels of government about who was responsible for it. Well state governments do make decisions about how much a school gets, they will continue to have autonomy because the constitution gives them autonomy for that, we never proposed withdrawing any funding. What we did propose was an alternative that gave them a revenue stream that grew even faster if that’s what they wanted to put into the school systems.

David Speers: Okay, but the revenue stream that is now being discussed is to give them a slice of income tax revenue, not the power to raise it but a slice of what the Federal Government collects. Is the plan here, if that happens, to then- for the Commonwealth to withdraw from school funding, from public school funding?

Simon Birmingham: That would be up to the states and territories to nominate which areas of …

David Speers: [Interrupts] But is that the Federal Government’s goal here? That’s what I’m asking you as the Minister.

Simon Birmingham: Well the Federal Government’s goal is certainly to ensure that we have clarity around school funding into the future; that we also have greater accountability and autonomy around the states …

David Speers: [Talks over] And does that mean any role for the Federal Government?

Simon Birmingham: Well the Federal Government will continue to provide significant funds.

David Speers: [Talks over] Yeah, and [indistinct].

Simon Birmingham: Let’s be clear, on funding the Federal Government will continue to provide significant funds for the states and territories. The Federal Government will continue to provide leadership in terms of areas such as NAPLAN, national assessment reporting around literacy and numeracy skills, around MySchool so that parents can across the nation compare the performance of schools and of different school systems and how they are performing from one state and territory to another state or territory. There are key roles that we will continue to play …

David Speers: [Talks over] Yeah, but funding, you are saying- yeah absolutely, but on funding you are saying an ongoing role for the Federal Government.

Simon Birmingham: Well the Federal Government has never proposed, never proposed, that there would not be funding flowing from the Federal Government to states and territories. Whether that was via income tax collection, whether that’s via specific purpose grants, there has always, under our policy platform, been increased funding growing into the horizon available for schools into the future.

But the big question we have is who should be responsible for the quality of the use of that funding, and why it is that the national debate is so fixated on how much money is available rather than how that money is used when we are spending around twice as much in real terms now than we were around 20 years ago. Twice as much, and yet according to international comparisons our performances in reading, in writing, in mathematics, in science have actually gone backwards. So that’s why for so much of this term we’ve sought to change that debate to one of looking at teacher quality, of parental engagement, of the national curriculum – things that actually make a difference to student outcomes, not just a continued battle about funding.

David Speers: And the Prime Minister has said that he’ll settle that funding question though early next year with the states and territories. Can you really go to an election without telling us what you’re willing to offer on school funding? Surely you’ve got to at least say it’s nothing or this is what we’re offering at an election.

Simon Birmingham: Well again, we do have built into the budget projections in relation to school funding, and they are projections for continued growth in school funding off of what is already a record level of Commonwealth contribution to schools around Australia.

David Speers: And that’s just what I wanted you to be clear about, at the election you won’t be offering anything above that?

Simon Birmingham: Well that is what our policy is; that’s what’s in the budget at present, it’s there for all to see. I make no bones about the fact that given we have a significant federal budget deficit, and given the record funding that’s in schools at present, we are proposing a lower trajectory of growth than the Labor Party. But what we want to focus the debate on are the things that will make a real different to student outcomes: those issues of teacher quality and of parental engagement. Let’s actually have the debate about the things that can be done to improve our schools, rather than just a debate about the inputs of how much money is spent on our schools.

David Speers: Final question, Simon Birmingham. I know you’re in the Senate – although that didn’t stop John Gorton – but would you be prepared to challenge for the Liberal leadership should the circumstances be right?

Simon Birmingham: [Laughs] Well, when John Gorton stepped up to the leadership the incumbent had met a rather tragic fate. I certainly hope and trust that we never see those circumstances repeated.

David Speers: Indeed, wasn’t helpful though for Kevin Andrews …

Simon Birmingham: [Talks over] And just in case there’s too much doubt in that, the answer is no.

David Speers: Okay, well that’s more than Kevin Andrews has been willing to say. Was that helpful for him today to be suggesting that he might one day? And he’s since said he was taken out of context, but only that Malcolm Turnbull is at present the Prime Minister and will lead to the election.

Simon Birmingham: Well look, I think it’s crystal clear to everybody that Malcolm is the Prime Minister, the leader, and I don’t believe there is anybody who can foresee any circumstances in which they think that he would be replaced by Kevin Andrews.

David Speers: Indeed. Simon Birmingham, thank you very much for joining us.