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1301.0 - Year Book Australia, 2005  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/01/2005   
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Contents >> Education and training >> Expenditure on education

National funding

Total expenditure on education has two components: public and private. In this chapter, the data for the public component is compiled in accordance with the International Monetary Fund's Government Finance Statistics (GFS) framework, while the private component is sourced from the Australian System of National Accounts.

It is not possible to simply add the public expenditure on education aggregate to the private expenditure on education aggregate to get a figure for total expenditure on education for two main reasons. First, the data presented here are for the general government sector only and do not cover expenditure on education by other sectors of the government. Secondly, double counting may also occur because the Australian (Commonwealth) Government records expenses when supplying grants to private schools which in turn spend these grant amounts, thus producing two expenditure transactions.

Data for individual time periods are expressed 'in current prices', or in terms of prices prevailing at the time. Consequently, changes from period to period in, for example, the value of operating expenses may be affected by price changes.

Public expenditure

The GFS provides a framework for measuring and analysing the financial activities of government. The GFS data presented in this chapter is recorded on an accrual accounting basis. This means that transactions are recorded in the period in which income is earned or expenses incurred, regardless of when a cash payment is made. Further information on the GFS framework may be obtained from Australian System of Government Finance Statistics: Concepts, Sources and Methods (5514.0.55.001).

Operating expenses on education include employee expenses, non-employee expenses, depreciation of fixed assets, and current and capital transfer expenses. Operating expenses for all levels of government classified by purpose are shown in table 10.32. Operating expenditure in 2002-03 was $41,004m, an increase of $3,195m from the previous year. This largely reflects increases in expenditure on primary and secondary education of $2,017m, and tertiary education of $1,212m.


10.32 GOVERNMENT OPERATING EXPENSES ON EDUCATION(a), By purpose

1998-99
1999-2000
2000-01
2001-02
2002-03
$m
$m
$m
$m
$m

Primary and secondary education
17,242
18,089
19,588
21,247
23,264
Tertiary education
11,495
11,832
12,932
13,890
15,102
Preschool and education not definable by level
1,123
1,100
1,140
1,191
1,120
Transportation of students
769
817
826
900
853
Education n.e.c.
384
408
590
581
665
Total
31,013
32,246
35,075
37,809
41,004

(a) All levels of government.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2002-03 (5518.0.55.001).


Table 10.33 shows the operating expenses on education for each level of government for the period 1998-99 to 2002-03. Total operating expenses of state and local government increased by $2,047m from 2001-02 to 2002-03, while operating expenses for the Commonwealth government increased by $408m. Intra-sector transfers are transfers or transactions that occur between different levels of government for the purposes of education.


10.33 GOVERNMENT OPERATING EXPENSES ON EDUCATION, By level of government

1998-99
1999-2000
2000-01
2001-02
2002-03
$m
$m
$m
$m
$m

Commonwealth Government
9,739
9,988
10,881
11,701
12,109
State and local government
22,393
23,241
25,099
27,048
29,095
Multi-jurisdictional(a)
8,288
8,651
9,323
10,073
11,194
Less Intra-sector transfers
9,406
9,634
10,228
11,013
11,393
Total
31,013
32,246
35,075
37,809
41,004

(a) The multi-jurisdictional sector currently contains units where jurisdiction is shared between two or more governments, or the classification of a unit to a jurisdiction is otherwise unclear. The main type of units falling into this category are public universities.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2002-03 (5518.0.55.001).


Sales of goods and services (table 10.34), from a GFS perspective, is defined as the revenue from the direct provision of goods and services by general government. In the context of education, this would include fees paid by students for the provision of education services. Tertiary education has by far the highest value for sales of goods and services of any level of education with a total of $6,481m in 2002-03. Sales of goods and services from tertiary education institutions increased by $629m (11%) from 2001-02 to 2002-03. Primary and secondary education institutions had sales of good and services of $564m in 2002-03.


10.34 SALES OF GOODS AND SERVICES, By level of education

1998-99
1999-2000
2000-01
2001-02
2002-03
$m
$m
$m
$m
$m

Primary and secondary education
390
416
453
549
564
Tertiary education
4,171
4,691
5,109
5,852
6,481
Preschool and education not definable by level
42
50
53
44
5
Transportation of students
-
-
1
1
2
Education n.e.c.
37
28
4
8
21
Total
4,640
5,186
5,619
6,454
7,073

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2002-03 (5518.0.55.001).


Table 10.35 shows the amount of Australian (Commonwealth) Government grants to different levels of government by level of education. Primary and secondary education was the major recipient of grants from the Commonwealth in 2002-03 with $5,818m, while the universities sector received a total of $3,940m for the same period.


10.35 COMMONWEALTH GRANTS TO OTHER LEVELS OF GOVERNMENT, By level of education - 2002-03

Primary and secondary education
Technical and further education
Universities
Other
Total
$m
$m
$m
$m
$m

State and local government
New South Wales
1,934
359
-
40
2,334
Victoria
1,488
262
-
9
1,759
Queensland
1,088
184
-
34
1,306
South Australia
446
86
-
11
543
Western Australia
558
99
-
32
689
Tasmania
130
31
-
4
165
Northern Territory
62
16
-
40
118
Australian Capital Territory
113
21
-
2
135
Total
5,818
1,058
-
172
7,049
Multi-jurisdictional(a)
0
0
3,940
0
3,940
Total
5,818
1,058
3,940
172
10,989

(a) The multi-jurisdictional sector currently contains units where jurisdiction is shared between two or more governments, or the classification of a unit to a jurisdiction is otherwise unclear. The main type of units falling into this category are public universities.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2002-03 (5518.0.55.001).


Private expenditure

Private sector expenditure on education (sourced from the Australian national accounts) consists of gross fixed capital formation by private non-profit organisations (private schools) and household final consumption expenditure on education services. Gross fixed capital formation is expenditure on new fixed assets plus net expenditure on second-hand fixed assets, including both additions and replacements. For education, gross fixed capital formation covers expenditure on items such as the construction of new buildings and facilities. Household final consumption expenditure encompasses transactions such as spending by households on fees charged by educational institutions, and the purchase of school uniforms and textbooks.

Table 10.36 provides data for private sector expenditure on education. Both gross fixed capital formation and household final consumption expenditure have increased in every year since 1998-99. For 2002-03, household final consumption expenditure comprised 86% of the $12,443m total for private expenditure on education.

10.36 PRIVATE EXPENDITURE ON EDUCATION

1998-99
1999-2000
2000-01
2001-02
2002-03
$m
$m
$m
$m
$m

Gross fixed capital formation
960
1,155
1,296
1,491
1,685
Household final consumption expenditure
8,484
8,798
9,415
10,068
10,758
Total
9,444
9,953
10,711
11,559
12,443

Source: ABS data available on request, Australian System of National Accounts, 2002-03.


Funding by sector

Schools

The primary and secondary education operating expenses of all levels of government totalled $23,264m in 2002-03 (table 10.32). Operating expenses associated with preschool, special, and other education were $1,120m. Preschool, primary, secondary, special school and other education expenses were largely met by state and territory governments. State and territory governments also contributed funds to the transportation of students, totalling $853m in 2002-03.

While primary and secondary education is free in government schools in all states and territories, fees may be charged for the hire of text books and other school equipment (particularly in secondary schools). Voluntary contributions may also be sought from parents.

In addition to funding schools directly, most state and territory governments provide financial assistance to parents (under specified conditions) for educational expenses of school children. Assistance includes scholarships, bursaries, and transport and boarding allowances, many of which are intended to assist low-income families. The Australian Government also provides a number of assistance schemes to facilitate access to education.

Vocational education and training (VET)

Information supplied by the National Centre for Vocational Education Research shows VET providers in receipt of public funds primarily receive recurrent revenue from the state and territory governments (56% or $2,580m in 2003), with additional funds being provided by the Australian Government (23% or $1,041m). The remaining 21% ($1,001m) is made up of on-going (recurrent) revenue.

Recurrent revenue comprises revenues appropriated by the Australian Government and state and territory governments to fund the normally occurring business activities of the sector and specifically excludes funds for capital asset construction, improvement or replacement. It also includes revenues earned by the sector from fees and charges arising from 'fee-for-service' activities (11% in 2003), student fees and charges (4%) and other ordinary operating activities (6%).

Most providers charge students fees for the administration of VET courses, for tuition, for materials or for student amenities. These fees vary according to the type of course and its duration.

Higher education

Most higher education institutions are funded by the Australian Government under the Higher Education Funding Act 1988 (Cwlth). In 2002-03 the operating revenue (before extraordinary items) of these institutions amounted to $11,224b, 42% of which came from Government grants. Government funding is also provided to higher education institutions through various research programs by the Australian Research Council and the National Health and Medical Research Council.

In addition to government funding, institutions receive revenue from students who are required to contribute to the cost of their education through the Higher Education Contribution Scheme (HECS), and from other fee-paying students. Higher education fees and charges have increased in importance in recent years. In 2002-03, 16.3% of operating revenue was raised from HECS, while other fees and charges accounted for a further 21.1% of operating revenue. These fees and charges included $1,449.8m from fee-paying overseas students, representing 59% of other fees and charges - a rise of 20% since 2001-02.

Some institutions rely more heavily than others on fees paid by overseas students. For example, the Central Queensland University, Curtin University of Technology in Western Australia and the Royal Melbourne Institute of Technology received 37.7%, 23.3% and 21.5% respectively of their revenue from fee-paying overseas students. This is well above the overall national average of 12.5%.

Adult and community education (ACE)

ACE programs are typically provided by adult migrant education centres, evening colleges, language centres, welfare organisations and other community-based organisations. Educational institutions including universities and TAFE may also offer ACE programs. ACE complements the formal programs and qualification pathways provided by the schools, VET and higher education sectors. However, separate funding information for ACE is not available.

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