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The estimates of government expenditure on education provided in this section accord with national accounting concepts.
Private expenditure on education (which comprises household final consumption expenditure plus gross fixed capital formation) was $11,445m in 2001-02. Private expenditure data include items such as school fees and the construction of private school buildings, but exclude items such as school books and uniforms. It is important to note that government expenditure on education and private expenditure on education estimates cannot simply be added together to derive an estimate of total expenditure on education because this will result in some double-counting.
Table 10.2 presents the total government operating expenses on education in 2001-02 by purpose. Primary and secondary education expenses were $21,283m, comprising 56.7% of these expenses, followed by university education (25.9%), and TAFE (10.4%). Total government operating expenses include depreciation of fixed assets, but do not include capital expenditure.
Table 10.3 shows the components of government operating expenses on education by economic transaction type in 2001-02. Employee expenses accounted for 55.1% of total government operating expenses, with the balance largely in non-employee expenses (23.3%) and current transfer expenses (16.7%).
Table 10.4 summarises Commonwealth Government grants to the states and territories for education in 2001-02. The major beneficiary of Government grants (both current and capital) was primary and secondary education, receiving 52.4% of the total granted (both current and capital) for education. Universities received 36.4% of the total granted, and 9.4% was directed to TAFE.
Funding of schools
The primary and secondary education operating expenses of Australian governments totalled $21,283m in 2001-02. Operating expenses associated with preschool, special, and other education were $1,146m. State and territory governments also contributed funds to other aspects of schooling such as student transport, totalling $900m in 2001-02. As shown in table 10.2, preschool, primary, secondary, special school and other education expenses were largely met by state and territory governments.
While primary and secondary education is free in government schools in all Australian 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.
Funding of Vocational Education and Training (VET)
Information supplied by the Australian National Training Authority shows that VET providers in receipt of public funds primarily receive revenue from the state and territory governments (57% or $2,467m in 2002), with additional funds being provided by the Australian Government (22% or $966m). The remaining 21% ($925m) is made up of 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 exclude 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 2002), 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.
Funding of higher education
Most higher education institutions are funded by the Australian Government under the Higher Education Funding Act 1988 (Cwlth). In 2001-02 the operating revenue (before abnormals) of these institutions amounted to $10,202m, 44% of which came from Government grants. Government funding is also provided to higher education institutions through various research programs, mostly on the advice of the Australian 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 2001-02, 17.4% of operating revenue was raised from HECS, while other fees and charges accounted for a further 19.8% of operating revenue. These fees and charges included $1,163.5m from fee-paying overseas students, representing 58% of other fees and charges - a rise of 23% since 2000-01.
Some institutions rely more heavily than others on fees paid by overseas students. For example, the Central Queensland University, Royal Melbourne Institute of Technology University and the Curtin University of Technology in Western Australia received 35.0%, 24.6% and 23.0% respectively of their revenue from fee-paying overseas students. This is well above the overall national average of 11.4%.