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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.
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.
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.
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.
Funding by sector
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.
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.