New South Wales Premier Barry O'Farrell.
New South Wales Premier Barry O'Farrell. Cameron Spencer - Getty Images

Gillard, O'Farrell close $5b Gonski reforms deal for NSW

UPDATE: More than $5 billion will be spent to overhaul the New South Wales education system, after Prime Minister Julia Gillard and Premier Barry O'Farrell today signed a deal on the Gonski reforms.

Described by both leaders an "an historic day", the deal makes NSW the first state to sign on to the long-awaited education reforms.

It will see the Commonwealth give the state government $3.3 billion, with the state to contribute $1.7 billion to deliver changes to the largest state education system in the country.

While Ms Gillard failed to get the backing of any of the states for the reforms just last week, the deal puts pressure on other state governments to come on board.

She said each of the 1.1 million school children in NSW would benefit from the deal, citing the federal offer of $2 for every $1 state and territory government can come up with.

The deal will provide an average of $9271 for every primary school student and $12,193 for every secondary school student in the state.

It will also include extra funding for groups, including indigenous students, children with a disability and schools in remote areas.

Ms Gillard said the agreement marked five years since the government began pursuing major reforms to the education system, with the agreement ensuring no child and no school would be left behind.

"This deal is in the best interests of NSW and is also setting a benchmark, and I'm determined that we see this type of agreement right around the country," she said.

Premier O'Farrell said the state government's share of the funds would likely come from changes to TAFE fees and subsidies, deferring the abolition of some state taxes and a new public service efficiency dividend to find budget savings.

He said the state had always supported the thrust of the reforms and he was not ignoring that not signing up would have come with a "sting in the tail" - with threats of other federal cuts to education in the state.

While several states have remained open to the offer, none have yet signed, with Queensland Education Minister John-Paul Langbroek unlikely to back the plan.

Mr Langbroek said on Tuesday he would not "rob Peter to pay Paul" just to have the state's education system re-branded as a Gonski reform.

He said the NSW Government had cut $1.7 billion from their education budget last year, only to bring it back in as part of the new agreement.

While the deal was largely welcomed by the education sector, it came a day after Grattan Institute research confirming major long-term problems for the Commonwealth budget.

Opposition Leader Tony Abbott said while he knew some states might sign up to the Gonski reforms; he remained concerned about the federal budget.

Coalition Education spokesman Christopher Pyne said the Opposition noted the signing of the agreement, but would await further negotiations with other jurisdictions.

The Opposition has remained opposed to the Gonski reforms, instead proposing other measures including an initiative to improve teacher quality.

Under the deal reached on Tuesday, the Federal Government will have to legislate the reforms before July 1 this year, and include its $3.3 billion in the coming May budget.


What they said:

"All eyes will now be on the leaders of the other states and territories.Parents outside NSW will rightly be asking why their leader would wait any longer to commit to Gonski. By signing up, there would be $14.5 billion in additional funds across the country. No leader should knock that back." - Australian Education Union federal president Angelo Gavrielatos.

"In the last year they (NSW Govt) cut $1.7 billion from their education system, now in Queensland this year, the total education spending has gone up by 4%. We're not going to rob Peter to pay Paul to re-brand our education system a Gonski reform." - Queensland Education Minister John-Paul Langbroek.

"We will await the outcome of the continuing negotiations between other states and territories as we respect their views. An agreement between one state and the Commonwealth on school funding is not a national school funding agreement." - Coalition Education spokesman Christopher Pyne.

"The children of New South Wales, both today and in the future, will be immensely grateful for Mr O'Farrell's willingness to put their interests above politics." - Australian Greens Education spokeswoman Senator Penny Wright.

"The NSW Premier has shown today that he is serious about the education opportunities for all children, no matter if they live in Sydney or on the NSW mid-north coast," - Federal Independent Rob Oakeshott.



EARLIER: School students in New South Wales are each set to receive an education worth more than $9000 a year from 2014, after the state and federal governments signed an agreement over the Gonski reforms on Tuesday.

Prime Minister Julia Gillard failed to get the majority of state governments on board to contribute to the costs of the reforms during COAG meetings last week.

But she joined with Premier Barry O'Farrell in Sydney today to ink the final $5 billion Gonski deal for the nation's most populous state.

The deal will see the Commonwealth pump $3.3 billion into the state on the condition the state delivers $1.7 billion for the reforms.

On average, that total funding agreement would deliver more than $9000 for every school student in the state starting January next year.

While Ms Gillard described it as an historic day for Australia's education system, Mr O'Farrell also referred to a "sting in the tail", with a likely withdrawal of education funding if NSW did not sign up.

However, he said he believed the deal was in the best interests of the state, and he remained confident the money would be in the Commonwealth's May budget.