The government’s education funding announcements over the weekend significantly clarify the Gonski process but still leave some major questions unanswered. And that’s before we get to what the states will do between now and June 30.

First, the spending cuts. Yesterday Prime Minister Julia Gillard was asked whether higher education funding cuts announced by Craig Emerson (and Wayne Swan) on Saturday were all the budget cuts needed to fund the Gonski funding model reforms. The Prime Minister offered a tortuous response, the clearest response being “but yes, we do believe that those changes announced are appropriate to have the resources necessary for this new work in schools, which is so pivotal to our nation”.

When Craig Emerson had been asked the same question on Saturday, he declined to say that would be the end of savings measures aimed at Gonski.

Emerson is more likely to be correct than the PM. Of the four cuts announced on the weekend, the second-biggest, the “efficiency dividend” imposed on universities, worth $900 million, is a one-off (or, more accurately, two-off). The ongoing cuts — capping self-education expenses for tax purposes at $2000, the conversion of student start-up scholarships into loans and the removal of the discount for paying HECS fees upfront — will total less than $2 billion over forward estimates. Even when combined with the superannuation tax concession cuts and education cuts last November, it won’t be enough to fund the Gonski increases proposed by the government on an ongoing basis. More cuts will be needed in the budget.

Capping education expenses at $2000 isn’t going to inflict too much pain, although The AFR insists today we should feel sorry for people planning to do MBAs, so presumably it fits within the now vast parameters of “class warfare”, which seem to include merely requiring high-income earners to pay the same tax as people on lower incomes. Ending the upfront HECS discount also removes a mechanism that favoured higher-income earners (I speak as one who paid upfront for a postgrad degree, thousands of years ago). Changing scholarships to loans will presumably have some deterrent effect on participation, and the “efficiency dividend” — or as it’s more correctly known, budget cuts — will translate into poorer education outcomes, although they are occurring in the context of overall increasing funding.

“… the real benefits may well lie not in the extra dollars but in the changes to performance information and allocation of decision-making within large systems.”

More broadly, to the extent that the cuts do partly feed into the Gosnki funding model, they’re a resource transfer from the tertiary sector to the primary and secondary sectors, and from those on higher incomes (who disproportionately go on to tertiary study) to those on lower incomes and those with educational disadvantage. It’s presumably only because they haven’t yet worked this out that the government’s critics have yet to also label this “class warfare”.

But by drawing on the tertiary education sector as a source for Gonski-related funding, Labor is both confusing its message on one of its key strengths — its support for education — and punishing the tertiary sector, which has lost money when other sectors continue to enjoy handouts, tax breaks and government largesse. Around $600 million a year, for example, goes to propping up 40,000-odd jobs in car manufacturing.

The $9.4 billion in additional funding offered by the government, based on an additional $4.5 billion from the states, is also well short of the total quantum of funding identified by the Gonski report, of up to $39 billion. It is, however, a significant increase on current funding, which critics like Andrew Wilkie seem to miss. Moreover, it is tied to a series of reforms. Like the government’s health and hospitals reforms, the real benefits may well lie not in the extra dollars but in the changes to performance information and allocation of decision-making within large systems. In effect, for that extra $9.4 billion, Gillard wants the state to sign up to more rigorous entry and assessment standards for teachers, more power for school principals and greater performance information for parents.

For the “it’s not about extra money” crowd, who mainly reside in the Coalition, even if we accept their argument that our education system doesn’t need extra money, they need to explain exactly how the Commonwealth can drive these sorts of improvements in performance information, performance management and decision-making by state governments without bribing the states to do so.

And all this has to be thrashed out in the shadows of an election that the Coalition is heavily favoured to win. Conservative states won’t be in any hurry to sign up to something that will improve Gillard’s slender re-election chances. But they also know that they’ll get precisely zero new money from the Coalition. Friday’s Council of Australian Governments meeting will be fascinating.