Feds reach $4.8bn funding deal with Australia’s biggest state

Anthony Albanese says the extra commonwealth funding for NSW will be tied to ‘real reforms’ including phonics and numeracy checks; Queensland is now the only state in a stand-off with federal Labor.

Prime Minister Anthony Albanese (left), and NSW Premier Chris Minns shake hands after signing the Better and Fairer Schools Agreement during a visit to Carlton South primary School in Sydney, Tuesday, March 4, 2025. Picture: AAP Image/Bianca De Marchi

Anthony Albanese says $4.8bn in additional commonwealth funds on NSW public schools over the next 10 years will be tied to “real reforms” including phonics and numeracy checks, making the announcement alongside NSW premier Chris Minns in Sydney.

Federal Labor finally reached a pre-election deal with NSW following prolonged negotiations, with Queensland the only state now in a stand-off with the Albanese government.

The commonwealth will provide an additional 5 per cent of the Schooling Resource Standard to NSW, doubling the federal government’s share of public school funding across the next 10 years.

At a public school in Carlton in Sydney’s south, the Prime Minister said “every single dollar of additional funding will go towards helping children learn”.

“It’s not a blank cheque, we want to make sure it’s tied to real reforms like evidence-based teaching practices, phonics and numeracy checks, catch-up tutoring, more mental health support.”

He questioned the Coalition’s commitment to education funding, telling reporters: “this is a great day but we need to acknowledge the contrast which is there”.

Mr Albanese claimed that the school system had been playing “catch-up” as a result of the Coalition’s 2013 budget measures, pointing to the decline in public school completion rates.

“There are real world consequences for young Australians as a direct result of those cuts that were made,” he added.

The deal lifts the federal contribution from 20 per cent to 25 per cent of total costs by 2034, with the NSW government agreeing to increase its share of funding to 75 per cent.

As a condition of the bonus ­federal cash provision, NSW will need to stop siphoning off 4 per cent of its provision to non-school expenditure such as curriculum development, school buses and capital depreciation – a condition for each state under the new agreement.

CANBERRA, AUSTRALIA – NewsWire Photos – February 12, 2025: Minister for Education of Australia, Jason Clare during Question Time at Parliament House in Canberra. Picture: NewsWire / Martin Ollman

The federal funding will be tied to NSW-specific school performance targets including year 1 phonics and early years numeracy checks; targeted and intensive supports such as small-group or catch-up tutoring; greater access to mental health professionals; and initiatives to improve the attraction and retention of teachers.

The agreement is also tied to national targets, released last week, which include improvements to NAPLAN proficiency levels for reading and numeracy across all years; better outcomes for priority equity cohorts in NAPLAN; increased student attendance rates and more students completing year 12; and an uptake in the engagement rate of student teachers.

Federal Education Minister Jason Clare said “the biggest state in the country has now signed up”.

“This will help more than 780,000 kids in more than 2200 public schools,” he said.

“It’s not a blank cheque. I want this money to get results. That’s why funding will be directly tied to reforms that we know work.”

Federal Labor’s record spending on public schools is on track to blow out by $30bn across the next decade, after Anthony Albanese intervened to double the federal cash offered in a 10-year funding deal for public schools.

Mr Clare announced in 2024 that the federal government would lift its share of public school funding from 20 per cent to 22.5 per cent of total costs, handing over an additional $16.2bn across 10 years. Only Western Australia, Tasmania and the ACT signed the deal, while other states demanded the offer be doubled.

In the Northern Territory, the federal government doubled its share of spending from 20 per cent to 40 per cent in a bid to improve the education of Aboriginal and remote students.

Prime Minister Anthony Albanese. Picture: Nikki Short

The Prime Minister pulled rank in February, authorising Mr Clare to offer to pay all states and the ACT 25 per cent of school ­running costs, announcing it would provide $1bn in additional funding to South Australian public schools and about $2.5bn to Victorian public schools across the next 10 years.

By doubling its original offer, the federal government stands to commit future governments to $30.2bn in additional outlays across the decade, compared with the original $16.2bn estimate.

NSW Premier Chris Minns said the deal was “vital as we work to lift education standards across the state by ensuring there is a qualified, dedicated teacher at the front of the classroom”.

NSW Education and Early Learning Minister Prue Car said the state’s “commitment to rebuilding public education will now be underpinned by an agreement that delivers full funding for public schools.”

“This incredible outcome for public schools will allow us to deliver on the ambitious targets we have set for the public education system in NSW,” Ms Car said, adding that the Minns government “inherited a teacher shortage crisis and falling outcomes after a decade of underfunding by federal and state Liberal and National governments”.

Federal opposition education spokeswoman Sarah Henderson said that despite calls for transparency, Labor continued to hide the terms of the school funding deals it has struck with Victoria, South Australia and Western Australia.

“The Prime Minister was happy to stand up and make these announcements, but won’t disclose how these agreements will improve student learning outcomes in our schools,” Senator Henderson said. “The Senate has ordered these agreements to be produced, and Labor’s shameless attempt to claim public interest immunity has been rejected.”

NSW Teachers Federation President Henry Rajendra said the agreement “is the culmination of more than a decade of committed campaigning by teachers, parents and students”.