Julia Gillard rings the bell on school inequity but one question remains - who will pay?

THE nation's neediest schools will receive the fastest rate of funding increase under an overhaul of the education system.

THE nation's neediest schools will receive the fastest rate of funding increase under an overhaul of the education system but Labor is yet to reveal how the commonwealth will pay for the radical reforms.

Julia Gillard yesterday guaranteed real funding increases to every school, public and private, regardless of need but, in her formal response to the independent Gonski review of school funding, failed to explain how the government would meet its share of the extra $6.5 billion a year it expects the states and territories to contribute.

Premiers yesterday immediately criticised the Prime Minister for failing to provide any further detail of the government's plans since releasing the Gonski report in February, warning the commonwealth would have to provide the bulk of new funding, while the independent and Catholic school systems were concerned about the uncertainty facing schools in 2014.

In a speech light on detail but heavy on political rhetoric, Ms Gillard called on Australians to join a "national crusade" and support the tough budget decisions required to end "this moral wrong" whereby the quality of education depended on the school attended.

"What we need is improvement in every single one of our 9500 Australian schools," she said. "I want each of you, the whole of our nation, to join me in this crusade."

Staff and students at Merrylands High School in Sydney's west yesterday welcomed the focus on funding the individual needs of students. Principal Lila Mularczyk said the debate was not about public versus private schools but a moral issue and a community responsibility.

"One would hope that, whatever the election outcome is, the government of the day would recognise the absolute need and responsibility to meet all the student needs despite what system they attend and what particular support they need," she said.

Ms Mularczyk echoed a central tenet of Ms Gillard's speech, in which she argued that reforming the school funding system, was "about all students".

"Funding should recognise that children are individuals, not standardised widgets," said Ms Mularczyk, the president of the NSW Secondary Principals Council. "The resources needed to get a great quality education for children vary and improving every child's education will need more resources in the future than have been available in the past.

"(The Gonski model) strips away all the old debates about private versus public and puts children at the centre of the system."

The new funding model adopted by the government, and based on the Gonski recommendations, sets a benchmark payment for every student in every school, supplemented by loadings for disadvantage and disability. The payments for non-government schools will be adjusted by a parent's capacity to pay, as under the present system.

The Gonski report calculated on 2009 figures that the extra funding required to enable all schools to educate students to a high standard was $5bn a year and Ms Gillard yesterday confirmed that figure was now $6.5bn a year, as revealed in The Australian.

The extra money will be implemented gradually across six years from 2014. It is believed the government's plan is to introduce the extra funding in equal increments of about $1bn across the six years, with schools receiving extra funding plus their rate of indexation each year.

The government will use variable rates of indexation to meet its commitment of more money for all, so that schools now receiving funding below the amount calculated under the new model will receive a higher rate of funding increase. Schools funded at a level higher than their needs will have their funding rise at a lower rate but covering inflation.

The government must finalise school funding arrangements next year, with the current agreement expiring at the end of next year. Ms Gillard said she would introduce legislation this year that tied the extra funding to school systems agreeing to a national school improvement plan.

Ms Gillard said she would lead discussions with the states and territories to "win their support" for the details of the new funding.

"I'm not going to flag here today questions of funding shares," she told the National Press Club. "We do expect the states and territories to step up to the plate and to put in their fair share. The discussions are about to start."

The head of the review panel, businessman David Gonski, described the government's plans as a "historic step forward" but warned Australia would "continue to drift and fall further behind the rest of the world" if the school sectors could not reach agreement.

Victorian Premier Ted Baillieu said the states were in no position to say whether they would support the new funding model because they did not know who would pay for what, and there had not been any discussion about it at the last Council of Australian Governments meeting last month.

NSW Education Minister Adrian Piccoli said "any significant increase" in funding had to be "largely funded" by the commonwealth and the states needed a "more substantial response than a drip feed of information".

West Australian Premier Colin Barnett was disappointed by the lack of substance in Ms Gillard's speech, and said his government already provided more funding per student to schools than the base indicative levels contained in the Gonski report.

Queensland Premier Campbell Newman suspected the commonwealth did not have the money to fund the reforms. South Australian Labor Premier Jay Weatherill, a former state education minister, said the state was not in a position to be able to make a major financial contribution and the commonwealth would have "to do the lion's share of the heavy lifting, certainly in the early years".

Opposition education spokesman Christopher Pyne questioned the government's aspiration to be among the top five education countries by 2025, asking what Australia had in common with homogenous populations such as South Korea's or Finland's.

Mr Pyne refused to repeat a commitment that a coalition government would repeal any funding legislation, saying it would have to see the details of any legislation before deciding how to deal with it.

Additional reporting: Staff reporters