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1301.0 - Year Book Australia, 2003  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 24/01/2003   
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Contents >> Education and Training >> Expenditure on education

The estimates of government expenditure on education provided in this section accord with national accounting concepts.

The accruals-based estimates in tables 10.1, 10.2, 10.3 and 10.4 reflect transactions in the period in which income is earned or expenses incurred, regardless of whether a cash payment is made. A conceptual framework, derived from the international standard A System of National Accounts 1993, is used for these estimates.

For the purposes of table 10.1, total expenditure on education includes expenditure on all sectors of education, such as preschool, primary, secondary, university, and technical and further education (TAFE), but excludes expenditure on courses such as vocational training programs not provided by TAFE institutions. Private expenditure data include items such as school fees, but exclude items such as school books and uniforms.

Total expenditure on education in the 2000-01 financial year was $39,981m, with government expenditure of $29,632m and private expenditure of $10,349m. Education expenditure as a percentage of gross domestic product (GDP) was 5.9% in 2000-01, similar to the two preceding financial years.


10.1 TOTAL EXPENDITURE ON EDUCATION(a)

Expenditure on education
Units
1998-99
1999-2000
2000-01

Government expenditure(b)
Operating expenses
$m
31,049
32,323
34,688
Net acquisition of non-financial assets
$m
90
301
486
less
Sales of goods and services
$m
4,620
5,149
5,542
Total
$m
26,519
27,475
29,632
Private expenditure
Household final consumption expenditure
$m
973
1,109
1,001
Gross fixed capital formation
$m
8,271
8,756
9,348
Total
$m
9,244
9,865
10,349
Total
$m
35,763
37,340
39,981
Gross domestic product (GDP)
$m
591,592
629,212
672,046
Total expenditure on education as proportion of GDP
%
6.0
5.9
5.9

(a) Figures expressed in current prices. Changes between years will include price effects.
(b) Total government expenditure on education derived by adding operating expenses and net acquisition of non-financial assets, then subtracting the sales of goods and services.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2000-01 (5518.0.55.001).


In 2000-01, government expenditure on education was 4.4% of GDP, with private education expenditure at 1.5% of GDP. In 2001, some 9,596 schools provided primary and secondary education for 3.3 million school students, 69% of whom attended government schools. VET institutions were well patronised, with 1.8 million clients, and there were 726,400 higher education students. An estimated 621,500 persons were employed in the education industry, representing 6.9% of the civilian workforce.

The total education operating expenses for all Australian governments increased by 7.3% from $32,323m in 1999-2000 to $34,688m in 2000-01. In the latter, total expenditure on acquisition of non-financial assets for all Australian governments, a cash measure, was $2,275m, up from $2,247m in 1999-2000. Cash-based private expenditure on education (which comprises household final consumption expenditure plus gross fixed capital formation) increased by 4.9%, from $9,865m in 1999-2000 to $10,349m in 2000-01.

Table 10.2 presents the total education expenses of governments in 2000-01 by purpose. Primary and secondary education comprised 56% of total operating expenses on education, university education 26%, and TAFE 10%. Total operating expenses include depreciation of fixed assets, but do not include cash payments for expenditure on non-financial assets, a component of the broader financial statements.


10.2 GOVERNMENT OPERATING EXPENSES ON EDUCATION, By purpose - 2000-01

Commonwealth
State and local
Multi-jurisdictional(a)
Total sectors
Intra-sector
transfers
Australia(b)
$m
$m
$m
$m
$m
$m

Primary and secondary education
5,298
19,365
-
24,663
5,174
19,490
Tertiary education
University education
3,849
118
9,191
13,158
4,070
9,089
Technical and further education
1,102
3,416
-
4,518
930
3,588
Tertiary education n.e.c.
-
93
-
93
-
93
Total
4,951
3,627
9,191
17,769
5,000
12,769
Preschool, special, and other education
108
1,087
-
1,195
108
1,086
Transportation of students
-
763
-
763
-
763
Other education expenses
524
55
-
579
-
579
Total education operating expenses
10,881
24,898
9,191
44,970
10,282
34,688

(a) The multi-jurisdictional sector currently includes only universities.
(b) Total for Australia equals total sectors minus intra-sector transfers.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2000-01 (5518.0.55.001).


Table 10.3 shows the components of operating expenses on education by economic transaction type in 2000-01. Employee expenses accounted for 56% of total operating expenses, with the balance largely in non-employee expenses (22%) and current transfer expenses (17%).


10.3 GOVERNMENT OPERATING EXPENSES ON EDUCATION, By economic transaction - 2000-01

Commonwealth
State and local
Multi-jurisdictional(a)
Total sectors
Intra-sector transfers
Australia(b)
$m
$m
$m
$m
$m
$m

Employee expenses
63
14,319
5,203
19,585
-
19,585
Non-employee expenses
222
4,320
2,982
7,524
18
7,505
Depreciation of fixed assets
10
983
649
1,642
-
1,642
Current transfer expenses
10,210
5,140
357
15,707
9,899
5,808
Capital transfer expenses
377
136
-
513
365
148
Total
10,881
24,898
9,191
44,970
10,282
34,688

(a) The multi-jurisdictional sector currently includes only universities.
(b) Total for Australia equals total sectors minus intra-sector transfers.

Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2000-01 (5518.0.55.001).


Total government operating expenses on education for all Australian governments in 2000-01 were $34.7b. Total government operating expenses are greater than total government expenditure because the total expenditure figure is net of sales of goods and services, but inclusive of net acquisition of non-financial assets.

Table 10.4 summarises Commonwealth grants for education to the states and territories in 2000-01. The major beneficiary of Commonwealth grants (both current and capital) was primary and secondary education, receiving 52% of the total granted (both current and capital) for education. Universities received 37% and 9% was directed to TAFE.


10.4 COMMONWEALTH GRANTS FOR EDUCATION - 2000-01

$m

Current grants to states, territories and universities
Primary and secondary education
4,852
Technical and further education
916
Universities
3,657
Other education not definable by level
107
Total
9,532
Capital grants to states, territories and universities
Primary and secondary education
315
Technical and further education
-
Universities
42
Other education not definable by level
1
Total
358
Total grants to states, territories and universities
Primary and secondary education
5,167
Technical and further education
916
Universities
3,698
Other education not definable by level
108
Total
9,889

Source: ABS data available on request, Public Finance Collection.


Funding of schools

On an accruals basis, the primary and secondary education expenses of Australian governments totalled $19,490m in 2000-01. Expenses associated with preschool, special, and other education were $1,086m. State, territory and local governments also contributed funds to other aspects of schooling such as student transport, totalling $763m in 2000-01. As table 10.2 shows, preschool, primary, secondary, special school and other education expenses were largely met by state, territory and local 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 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)

VET providers in receipt of public funds primarily receive revenues from the state and territory governments (57% in 2001), with additional funds being provided by the Commonwealth Government (22%). The balance of revenue (21% in 2001) comes from fee-for-service activities, ancillary trading, and student fees or charges.

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. Nationally, in 2001 around 4% of recurrent revenue for VET institutions was provided through student fees and charges. An additional 11% of total revenue was generated through services provided to full-fee paying overseas clients, employers and other individuals or organisations under contracts or commercial arrangements ('fee-for-service' arrangements).

Funding of higher education

Most higher education institutions are funded by the Commonwealth Government under the Higher Education Funding Act 1988 (Cwlth). In 2000 the operating revenue (before abnormals) of these institutions amounted to $9,328m, 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.

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 2000, 18% of operating revenue was raised from HECS, while other fees and charges accounted for a further 18% of income. These fees and charges included $947m (representing 56% of the fee income) from fee-paying overseas students - a rise of 20% since 1999.

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 25%, 23% and 23% respectively of their revenue from fee-paying overseas students. This is well above the overall national average of 10%.

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