Victorian principals rallied at state parliament on Thursday opposed to new state government funding legislation that will see 25 per cent of funding for state schools shifted to private schools.

Australian Education Union president Meredith Peace said the government’s controversial new legislation for non-government school funding was disappointing and would increase inequity in the state’s education system.

Horsham West and Haven Primary School principal Brendan Bush said funding was a major concern for Wimmera schools.

‘‘The current funding model was fairly simplistic and we need a model that is more fine-tuned to the needs of individual students,’’ he said.

‘‘We have had to make some pretty serious and tough decisions about prioritising our dollars.

‘‘As a result, we are increasingly not running intervention programs for students.

"We are concerned we are in a funding model that disadvantages both students who are struggling and excelling.’’

Nhill College principal Joanna Day said Wimmera schools had to be careful with their budgets

‘‘Extra funding would allow schools to run more programs to support student learning, along with intervention programs for students with lower levels of achievement and programs to extend students achieving above expected levels,’’ she said.

Dr Day said a recent Auditor-General’s report showed the Department of Education and Training did not know the cost of running a school.

‘‘Schools are not funded based on what it costs to deliver free instruction, hence the department does not know whether the school resource package actually covers the cost of the free instruction program,’’ she said.

‘‘It was also noted that Victoria’s funding was below the national average for funding by 14.4 per cent for primary schools and 11.4 per cent for secondary schools.’’

The union has called on the state government to commit to the final two years of the Gonski school funding agreement, which was signed by the former state government and the federal government in 2013.

Dr Day said the agreement would give schools more certainty about their budgets.

‘‘It does make planning difficult when schools are unsure of the following year’s budget until the end of term three, when an indicative budget is received,’’ she said.

‘‘Changes in student numbers can still cause large changes to a school’s budget between then and when the confirmed budget is announced in March.

‘‘Staff are employed on the basis of the previous year’s predicted numbers and a fall in enrolments can cause budget deficits.’’

Mr Bush said it was vital the state government committed to Gonski.

‘‘We haven’t had any substantial increases in funding and our costs are increasing dramatically,’’ he said.

‘‘We are becoming more reliant on fundraisers and the parents do a fantastic job, but that money should be the cream on the cake, not an essential income.’’

A spokesman for Education Minister James Merlino said the legislation did not reduce the amount of funding available to state school students and was consistent with the Gonski reforms.

He said the government was committed to the Gonski reforms.