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