The 2025 Federal Budget introduced a range of changes to education funding across Australia, aiming to address resource needs in schools and support student literacy and learning outcomes. But with new agreements between the Commonwealth and every state and territory, we’ve seen a number of significant, complex developments in how education funding will be distributed and used over the next decade.
All seems like a little more than you’ve got time for on a rainy lunch break in the middle of Term 2? Not to worry: our handy Scanning Pens Funding update provides a state-by-state overview of what’s going on with education funding in 2025, with a particular focus on how these changes can help unlock literacy for students where you are.
Grab a coffee – it’s more interesting than it sounds, we promise.
Budget 2025 means some core changes to education funding
Budget 2025 has set out a new direction for education funding in Australia. The numbers are staggering: the government has committed $135.7 billion over the next four years to recurrent school funding, with $31.1 billion allocated for schools in 2025 alone.
A central feature of the shift is the Better and Fairer Schools Agreement, which will gradually increase the Commonwealth’s share of public school funding to 25% of the Schooling Resource Standard (SRS) by 2034, with states and territories covering the remaining 75%.
The new agreements also encourage the use of education funding for evidence-based reforms, including explicit teaching, Year 1 phonics and numeracy checks, and targeted support for students who need additional help. It’s a set of measures are designed to support literacy and numeracy outcomes for every student in every state, and to ensure resources are directed to where they’re needed the most.
So here’s a run-down of the changes Budget 2025 is implementing cross-state, as well as other funding wins it’d be handy for educators to be aware of…
New South Wales:
Increased investment on the horizon
Thanks to those Budget changes, the NSW state government is investing $13.1 billion in public education this year – over $17,000 per student, up more than $2,000 since 2023.
And thanks to that new 10-year SRS deal with the Commonwealth, an extra $4.8 billion is set to flow into NSW schools. So that’s likely to manifest as more support for small group tutoring, extra resources for student wellbeing, and a focus on evidence-based literacy programs – and as all funds now go straight to schools, with no more 4% carve-out for indirect costs, it’s a big financial boost for classrooms across the state.
Victoria:
Mixed news for the ‘education state’
Education funding in Victoria has undergone significant changes in recent years. Again, the Budget delivers major investments in school infrastructure, teacher support, and targeted learning programs.
However, Victoria continues to face challenges: the state’s commitment to fully funding public schools has been pushed back to 2031, and funding for vocational education has been cut, leaving TAFEs struggling to cover course delivery costs. Early childhood education also saw limited new investment in workforce retention, despite ongoing shortages. These shifts mean Victoria now has some of the lowest-funded public schools and vocational education systems in Australia, leading the Australian Education Union Victorian Branch to claim that the funding system makes a mockery of Victoria’s moniker of the ‘education state’.
Queensland:
Investment may combat retention woes
The most significant recent change for Queensland is still the landmark agreement between the Queensland and Federal Governments, which will deliver an extra $2.8 billion in Commonwealth funding to Queensland state schools over the next decade.
This boost is the largest ever for Queensland schools, and it’s hoped it’ll go some way as to combating Queensland’s teacher shortages: a 2024 QTU survey reveals that more than half of state school principals had unfilled teaching positions – the highest rate in Australia.
And although it’s not a funding issue, it’s worth noting that the state is pursuing red tape reduction reforms to ease administrative burdens on teachers and streamline processes for students and parents.
South Australia:
Boosted education funding has a long way to go
Despite the new budget’s commitment, there’s a lot of ground to cover: South Australian public schools remain underfunded by hundreds of millions annually, with a 2024 survey revealing widespread teacher shortages, rising student needs, and declining wellbeing among staff and students.
The state also faces significant funding inequities, with public schools educating a much higher proportion of disadvantaged and First Nations students while private schools continue to receive above-standard funding levels.
On a more positive note, though, the state government has committed to invest $5 million over five years to fund postgraduate scholarships for talented locals to study overseas, joining several other states in supporting advanced education opportunities.
Tasmania:
Early intervention and additional needs support
Tasmania’s education funding is seeing a major boost, with the 2025 Budget locking in $9.9 billion over four years for education, children, and young people – about a quarter of total government spending. The recent federal-state agreement will bring an extra $83 million in Commonwealth funding and aims for full public school funding sooner than other states, while also closing loopholes that previously allowed funds to be diverted from classrooms.
Despite these education funding gains, Tasmania faces challenges: net debt is rising sharply, the government plans to effectively freeze spending over the next four years (which means a real-terms cut after inflation), and public schools are still underfunded by nearly $260 million between 2024 and 2028, which the AEU attribute to ongoing accounting practices.
Australian Capital Territory: Strengthening one-off funding and extra-curriculars
Alongside the headline reforms for education funding, the ACT’s 2025 Budget delivers some targeted good news for families and students. The Equity Fund is being boosted by $600,000 for 2025, supporting an extra 1,000 eligible students with one-off payments for school costs like uniforms, books, and excursions. Funding for free school camps at Birrigai is also extended, with $3.3 million over four years ensuring all ACT public primary students can continue to attend camp at no cost – helping make education more accessible and inclusive.
Northern Territory: Intensive support for unique needs
Like the others, the Northern Territory will see the Commonwealth’s share of education funding rise, hitting 40% of the SRS by 2029 and recognising the unique challenges faced by NT schools.
However, the Territory continues to face some of the steepest education cost increases in the country, with families – especially outside major centres – spending heavily on essentials like electronic devices and school fees. Ongoing challenges also include high rates of student disadvantage, remote and regional access barriers, and persistent teacher shortages, all of which put pressure on the system despite recent funding commitments… so there’s a lot of ground for Budget 2025’s investments to make up.
Why effective use of education funding matters in a literacy crisis
While these education funding increases provide new opportunities for schools, it’s vital that resources are used effectively to address Australia’s ongoing literacy challenges. According to the 2023 NAPLAN results, one in three Year 9 students did not meet the national reading benchmark, and the proportion of students below standard in reading and writing has risen fairly dramatically since 2018. Even if we cast a broader net, the conclusions remain the same: OECD’s 2022 PISA results also show a decline in Australia’s reading performance, with the country now ranked 17th globally, compared to 4th in 2000.
Literacy is on a downturn. And these findings highlight the importance of directing education funding towards evidence-based literacy instruction, early identification of students who need extra help, and targeted support programs.
…But supporting students with reading challenges isn’t always a simple conversation. Decisions have to be made regarding where to target education funding for the most powerful results, how to overcome student disengagement, and how to get the best results from the time we have with these learners. The stakes are high – and a generation of reading futures are on the line.
But we’re here to help you unlock literacy.
At Scanning Pens, we know that the education funding landscape is tricky to navigate: for teachers, system leaders and support professionals, although there’s a very welcome uptick in education funding on the horizon, it doesn’t necessarily make it all that easy to work out what’s the best thing to do with that education funding – let alone know if we’re making it work as hard as it should be. And the caveat that comes with Budget 2025 is that it demands results in order for investment: this one’s all about making sure that schools are gravitating toward support solutions that really put in the work for students, especially when it comes to fostering literacy.
That’s why we’re offering schools and teachers a FREE consultation with our EdTech experts, so that we can explore the options with you, work out which streams of education funding are open to you, and which devices are going to be most able to supercharge literacy in your setting.
You’ve got enough to do this term – we’re here to make this bit simple.
Request your FREE expert consultation on:
📧 auinfo@scanningpens.com
☎️ (02) 8855 7100
