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NSW school funding cuts highlights state underspending on public schools

By Scott Prasser - posted Wednesday, 17 April 2024

The announcement last week that the NSW government will cut spending on its own public schools by 1.25 per cent again highlights the failure of state governments to meet their share of the Gonski Student Resource Standard (SRS) as required by the Australian Education Act and subsequent agreements between the Commonwealth and the states and territories.

NSW like most, but not all states and territories, fails to meet its obligations concerning funding public schools while blaming the Commonwealth which has met its legislated agreements for both public and non-government schools.

Under the 2017 amended Australian Education Act the states were to increase their spending to meet 80 per cent of the SRS for public schools by 2023. The Commonwealth would increase its share to 20 per cent. 


Arguing the required increases were too onerous, NSW and other states had the SRS target reduced to 75 per cent. The states were also allowed to include in their funding items not previously counted as contributing to education. This has been estimated to have “saved” the states some $11 billion in funding over 2019-2023.

Despite this extension and reduced contribution requirements only three states in 2023 met the new reduced 75 per cent target – Western Australia, ACT and South Australia. Only the ACT achieved the full 80 per cent requirement.

NSW in 2023 was at 72.2 per cent of the SRS. The new Labor government agreed to    increase funding to get to 75 per cent by 2025 – two years earlier than previously planned. Tasmania will be there by 2027, Victoria by 2028 and Queensland, presently at just 69 per cent, not until 2032.

Now, the just announced 1.25 per cent cuts makes it difficult to see how or when NSW will reach 75 per cent of the SRS by 2025 as was agreed and promised.

All this means that NSW public schools, the largest school system in Australia, will not receive the funding that had been deemed necessary for all students to reach an acceptable education standard.

NSW’s sudden announcement of cuts highlights how state education expenditure is part of the budget process, can be changed at any time and is affected by short term political considerations. By contrast, Commonwealth school funding increases are legislated and must be implemented,


We should not forget that NSW and some of the other states reduced their school funding in real terms between 2013-17 thus negating the extra funding the Commonwealth government was providing as it introduced the new Gonski school funding model at that time. This was typical state cost shifting prevalent in our federal system under which as federal funding increases are accompanied by state funding cuts.

The other factor driving NSW cuts is declining enrolments of 25,000 since 2019 in public schools. This reflects a nation-wide trend. Across Australia between 2019 to 2023 public school enrolments increased by 0.7 per cent compared to 4.8 per cent for Catholic schools and 14.1 per cent for the independent sector.

At the same time increases in non-government school enrolment represents a cost saving for the states as the Commonwealth is a major public funder for that sector though at a lower level than states support for public schools.  

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This article was first published on Policy Insights.

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About the Author

Dr Scott Prasser has worked on senior policy and research roles in federal and state governments. His recent publications include:Royal Commissions and Public Inquiries in Australia (2021); The Whitlam Era with David Clune (2022) and the edited New directions in royal commission and public inquiries: Do we need them?. His forthcoming publication is The Art of Opposition reviewing oppositions across Australia and internationally. .

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