Auditor-General says new spending falls $2bn short

THE Auditor-General has found that the Gonski education reforms contain only $879 million in new spending over their first four years.

THE Auditor-General has found that the Gonski education reforms contain only $879 million in new spending over their first four years, compared with the $2.9 billion reflected in the budget and that spending will decline in two of the first four years.

In a letter to opposition education spokesman Christopher Pyne, Auditor-General Ian McPhee calculates that net spending on education will fall $20.6m in 2014-15 and $135.6m in 2015-16.

Mr Pyne seized on the letter to write to Victorian Premier Denis Napthine, expressing "deep reservations about the federal government's proposed new funding model and its impact on Victoria".

The revelation came on the same day Dr Napthine made a $10.5bn play on education, seeking $7bn from the commonwealth in exchange for a $3.5bn contribution from Victoria to reform its schooling.

Legislation setting up the framework for the Gillard government's education agenda passed the Senate without amendment yesterday.

Dr Napthine acknowledged his concerns about the Gillard government's spending on education over the budget's forward estimates after being sent the letter from Mr Pyne.

Mr Pyne says in his letter that the federal budget "does not reflect the claims being made about additional funding".

"You will note the Auditor-General has confirmed that only $875.8m in net new money has been allocated across the forward estimates in dollar terms for the National Plan for School Improvement," he wrote.

"This letter also confirms that for two of the next three years, net new funding goes backwards in dollar terms ($206m in 2014-15 and $135.6m in 2015-16)."

In the letter to Mr Pyne, Mr McPhee says the measures for the Better Schools - National Plan for School Improvement included in the 2013-14 budget and the forward estimates total $2.98bn with associated funding redirection measures of $2.106bn.

This results in net additional spending of $879m over the period 2012-13 to 2016-17.

The $9.8bn in funding for the National Plan for School Improvement mentioned in the budget starts from 2014-15 for a period of six years. Of this, $2.3bn is included in the forward estimates, in the New School Funding Model, with the balance falling outside the forward estimates.

Mr McPhee says the Department of Finance and Deregulation has also advised the Australian National Audit Office that some funding has been set aside for the NPSI in the contingency reserve over the forward estimates for the purposes of negotiating with the states and territories.

Mr Pyne attacks the new indexation arrangement for schools which he says are much lower than the historical commonwealth average.

"The 2013-14 budget estimates for commonwealth recurrent funding to schools (based on the new NPSI proposal) also results in a reduction of some $1.2bn over the forward estimates in real dollar terms in comparison to last year's budget," he writes in the letter to Dr Napthine.

A spokeswoman for School Education Minister Peter Garrett said education funding would increase each year under Labor.

"As the budget papers clearly show, funding for schools will increase each and every year under Labor's national plan," she said.

"The only ones planning to cut education funding to the bone is the federal coalition. If the coalition is elected they will be a disaster for schools. The true cost of the coalition's plan to stick with a broken funding model is $16.2bn over six years."