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The previous Conservative administrationhad pushed through a number of education changes, including the unpopular self-governing status which entitled schools to extra money.
School standards minister Estelle Morris visited Victoria with a group of UK headteachers earlier this year to see how the system worked.
Labor's education minister Mary Delahunty told the state parliament in Victoria: "From next year, all schools will enjoy the same funding and employment conditions. We believe all students should have the opportunity to achieve excellence
wherever they are."
Despite the cash incentives, only 51 of Victoria's 1,644 state schools applied to become self-governing - far below the Conservative government's expectations. This was largely because of vehement opposition from parent and teacher organisations and threats by Labor that if elected it would scrap the scheme.
The schools which did eventually become self-governing included 12 specialist schools intended to be "centres of excellence". They were to receive $150,000 (pound;61,000) each in bonus payments over three years.
The self-governing schools were given almost complete autonomy from the education department, including the right to hire and fire their own staff.
The salaries of teachers were funded on an annual average of pound;18,000 per teacher whatever their qualifications and experience. (The average wage in Australia is pound;11,400 compared to pound;20,900 in the UK.) Schools also received a one-off pound;122,000 start-up grant plus pound;51 per student to cover services such as welfare, psychology, and remedial classes.
The minority Labor government - which relies on the support of three independents - will redistribute the pound;3 million set aside for the scheme to all state primary and secondary schools.