Recent data analysed by Sydney Catholic Schools from the past five budget papers indicates that Treasury officials regularly overestimate the levels of funding indexation contained in the Gonski 2.0 model by around 1% each year.
Based on prior Treasury estimates, the new funding legislation may only deliver annual increases in the range of 2.3% instead of an indexation level of 3.3% as the Minister suggests.
If this is the case, all Australian schools, not just Catholic schools, could potentially lose funding in real terms.
Sydney Catholic Schools Executive Director, Dr Dan White, says: “The revelation of the failure of the Treasury to accurately predict indexation rates over an extended time period calls into question the validity of the long-term funding projections in the Gonski 2.0 model.”
Whilst Minister Birmingham has sought to reassure the Catholic education sector that his treasury modelling of the Gonski 2.0 formula will deliver long-term benefits, Dr White has raised concerns about the information being used to make an informed judgement.
“Previous performance is often the best indicator of success, or lack thereof,” said Dr White.
If the Treasury has consistently overestimated the proposed indexation rate by nearly 1% each year over the past five years, this could lead to a significant overestimation of funding to Catholic schools in the order of over $1 billion across the life time of the Gonski 2.0 plan.
“Ultimately there will be a major shortfall in funding from 2021. This impact will fall heavily on low-fee Catholic primary schools.”
Many inner city, inner west and schools in the East and Sutherland Shire could face fee rises between $4000-$5,200. Fr John Therry Catholic primary at Balmain would see a fee hike of $5200. At St Joseph’s Catholic Primary Como fees would increase by $2,000. In Concord west, St Ambrose’s Catholic Primary faces increases up to $1,700 per student.
“Once again, we call on the Minister to present his detailed financial analysis and enter into meaningful discussions with the Catholic education authorities. At this stage the figures don’t appear to add up,” Dr White said.
“Put simply, Catholic families want a fair deal not a special deal.”
Proposed Education Funding Index – Gonski 2.0
From 2021, school funding from the Australian Government will be indexed by
a variable rate based on two economy-wide indexes: the Wage Price Index
(WPI) and the Consumer Price Index (CPI). The Australian Government has
told schools that the new index will be weighted at 75% of WPI and 25% of
The below table shows the Treasury forecasts for the combined CPI and WPI Index for the past five years. The forecast on average suggested an average indexation rate of 3.23% (very close to the Minister’s forward projection of 3.3% post 2021).
However, at the end of the budget cycle, the actual indexation rate would have been only 2.27%
Bernadette Bain (02) 9568 8223