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The estimates of government expenditure on education provided in this section accord with national accounting concepts. An explanation of these concepts is contained in Government Finance Statistics: Concepts, Sources and Methods (5514.0); Information Paper: Developments in Government Finance Statistics (5516.0); Information Paper: Accruals-based Government Finance Statistics (5517.0); and Expenditure on Education, Australia (5510.0).
Table 10.2 shows the components of operating expenses on education by economic transaction type in 1999-2000. Employee expenses accounted for 54%, with the balance largely in non-employee expenses (22%) and current transfer expenses (19%).
Table 10.3 summarises Commonwealth grants for education to the States and Territories in 1999-2000. The major beneficiary of Commonwealth grants (both current and capital) was primary and secondary education, receiving 59% of the total granted (both current and capital) for education. Another 27% of Commonwealth grants for education was directed to universities.
Funding of schools
On an accrual basis, the primary and secondary education expenses of Australian governments totalled $18,455m in 1999-2000. Expenses associated with preschool education and education not definable by level were $1,111m. State, Territory and local governments also contributed funds to other aspects of schooling such as student transport, costing $817m in 1999-2000. As table 10.1 showed, preschool, primary, secondary, and other special education expenses were largely met by State, Territory and local governments.
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 levies 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 Commonwealth Government also provides a number of assistance schemes to facilitate access to education.
Funding of Vocational Education and Training
VET recurrent revenue is provided primarily by the State and Territory Governments (58% in 2000), with additional funds being provided by the Commonwealth Government (21%). The balance of revenue (21% in 2000) comes from fee-for-service activities, ancillary trading, and student fees or charges.
All States and Territories charge most students some form of administration fee for VET courses. This varies according to the type of course and its duration. Nationally, in 2000 around 4% of recurrent revenue for VET institutions was provided by student fees and charges. Another 11% was received as fee-for-service revenue from full-fee paying overseas clients, employers and other individuals or organisations.
Funding of higher education
Most higher education institutions are funded by the Commonwealth Government under the Higher Education Funding Act 1988. In 1999 the operating revenue (before abnormals) of these institutions amounted to $8,730m, 45% of which came from Commonwealth government grants. Commonwealth government funding is also provided to higher education institutions through various research programs, mostly on the advice of the Australian Research Council (ARC).
In addition to government funding, institutions receive payments 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 1999, 19% of operating revenue was raised from HECS, while other fees and charges accounted for a further 18% of income. These fees and charges included $79m (representing just over half of the fee income) from fee-paying overseas students. Some institutions rely more heavily than others on fees paid by overseas students. For example, the Royal Melbourne Institute of Technology University and the Curtin University of Technology in Western Australia received some 22% and 21% respectively of their revenue from fee-paying overseas students. This is above the overall national average of 7.3%.