With the federal election looming, the Victorian and South Australian governments have agreed to sign 10-year school funding agreements with their federal Labor counterparts.
Under reforms set out by the Gonski 2.0 review, states are required to fund public schools at 75 per cent of the Schooling Resource Standard.
The federal government chips in 20 per cent, leaving a five per cent shortfall.
It reached deals with WA and Tasmania in 2024 to boost federal funding by 2.5 per cent but other states were holding out for a bigger slice of the pie.
The latest agreements will lift the federal contribution up to 25 per cent by 2034, delivering an extra $2.5 billion for Victoria and $1 billion for SA.
In exchange, Victoria and SA will stop using an "accounting trick" that allowed the states to claim four per cent of public school funding for indirect school costs such as capital depreciation.
The deals will be tied to a bilateral agreement that includes increased national targets for students leaving school with a Year 12 certificate, reading and numeracy skills and attendance rates.
"This will mean more money than ever for public schools but it's not a blank cheque," Prime Minister Anthony Albanese told the National Press Club on Friday.
"Our new funding is for real reform and it will deliver real results."
Education opens the doors of opportunity and changes lives.— Anthony Albanese (@AlboMP) Today we're making sure that every child in public schools gets the support they need, with new schools funding agreements with South Australia and Victoria.With six of the states and territories now signed up to the… pic.twitter.com/dIevMUFh30January 24, 2025
Victorian Education Minister and Deputy Premier Ben Carroll said the federal government had backed down after 12 months of discussions.
"It's been tortuous," he told reporters in Melbourne on Friday.
"But it's all been worth it ... there were times that I wondered if we'd get to the five per cent. In fact, we were happy to just roll over the existing agreement."
The money will go directly to primary and secondary public schools and fund resources for students, teaching practices and more mental health support.
SA Education Minister Blair Boyer said the deal delivered on the original vision of David Gonski's landmark 2011 review.
"In South Australia, when fully implemented the five per cent is worth as much as $248 million of extra funding for public schools every single year," he said.
The Australian Education Union hailed agreements as "life changing" for students, teachers and support staff.
"Teachers, students and parents will finally see their public schools funded to the level needed for every child to reach their potential," federal president Correna Haythorpe said.
NSW and Queensland are the remaining holdout states and the prime minister said his government would work towards striking a deal with them.
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