Page 1436 - Week 05 - Thursday, 13 May 1993
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Madam Speaker, the ACT's forward estimates included in the 1992-93 budget papers had anticipated an historically large reduction in Commonwealth funding in future years, including a 9.3 per cent real reduction in 1993-94. If the Commonwealth were to apply the Grants Commission report's assessed relativities, the real reduction in 1993-94 would be 21 per cent in real per capita terms, with significantly smaller reductions in the following years. This larger than anticipated impact of the commission's report in 1993-94 is a result of a number of factors which impact particularly harshly on the ACT. A major factor is the much greater reduction in transitional allowances in 1993-94 than would have applied had the commission's previous methodology been continued. The previous task of $18.3m has now increased to $42.8m.
This greater reduction is explained by the impact of the new methodology on 1989-90, the starting point of the transitional allowances previously assessed by the commission. This additional $24.5m transitional task could not have been anticipated or planned for and is the result of the retrospective impact of methodological changes. The ACT could not have made the adjustments required in the initial four-year transitional period now completed. The ACT will be seeking recognition of this anomaly by the Commonwealth, including transitional assistance to cover the phasing out of this adjustment over the next few years.
There are other aspects of the new approach adopted by the commission which have a particularly adverse impact on the ACT. They result in a further reduction in general revenue assistance of $25m in addition to the impact on the transitional allowances. The Government intends to pursue these matters in negotiation with the Commonwealth. The first among these is the commission's changed treatment of retention rates in the post-compulsory years of secondary education, years 11 and 12. This is a significant factor in the large reduction in the ACT's assessed relativity factor. This change alone is estimated in the report to reduce funding to the ACT by $18m.
Previously the commission had assessed relative needs for post-compulsory secondary education based on actual enrolments. Differences between actual and national average enrolments were discounted by 20 per cent to have regard to the influence of State policies. The changed treatment in this inquiry has an exceptionally adverse impact on the ACT, given the high actual retention rates in the ACT. These high retention rates are attributable to structural elements of the ACT's social and economic environment. Furthermore, over the last two decades movements in retention rates have reflected national changes such as moves to expand Australia's education and training base and changing employment demands.
Secondary education is a demand driven program with an obligation on all governments to find places for students wishing to complete secondary education. The different treatment afforded by the commission between compulsory and non-compulsory years of secondary education is an anachronism. This is especially the case at a time when national policies are specifically directed towards ensuring that all students are able to have a choice of fully completing secondary education and when employment opportunities for school leavers who leave once completing year 10 are restricted. This is particularly the case in the ACT, with its unique employment and industry structure compared to the States.
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