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EXPENDITURE ON EDUCATION
Graph 10.35 summarises operating expenses on education for each level of government from 1998-99 to 2004-05. Over this period, total operating expenses of state and local government increased by 51%, while expenses for the Australian Government increased by 49%. Intra-sector transfers are transfers or transactions that occur between different levels of government for the purposes of education, the net effect of which is to reduce total government operating expenses on education.
General government revenue
Sales of goods and services (graph 10.37, table 10.38), 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 (domestic and overseas) for the provision of education services. Tertiary education has by far the highest value for sales of goods and services at $7,366m in 2004-05, and accounts for 90% of the total of goods and services across all levels of education within the general government sector. Sales of goods and services from tertiary education institutions increased by $192m (nearly 3%) from 2003-04 to 2004-05. Primary and secondary education institutions had sales of goods and services of $738m in 2004-05, an increase of 19% on the previous year.
Table 10.39 shows Australian (Commonwealth) Government grants to different levels of government by level of education. Primary and secondary education was the major recipient of Government grants at $7,268m in 2004-05, while the universities (within the multi-jurisdictional sector) received a total of $4,693m in the same period. These represented increases of 11% and 7% respectively from 2003-04.
Private sector expenditure on education (sourced from the Australian National Accounts) consists of gross fixed capital formation by private educational institutions and household final consumption expenditure on education services.
Gross fixed capital formation in the field of education is estimated from statistics of the value of work done on new building and major additions to buildings of private educational institutions.
Household final consumption expenditure on education services is estimated as: fees paid by persons to government schools (including technical and agricultural colleges); fees (other than boarding fees) and gifts to universities, independent schools, business colleges, etc; plus current expenditure of non-profit educational institutions (net of fees and other current receipts). Expenditure on such items as school books, uniforms, fares for students' travel, etc. and expenditure by parents' associations on school equipment are not included.
Table 10.41 provides data for private sector expenditure on education. Both gross fixed capital formation and household final consumption expenditure increased every year between 1998-99 and 2003-04. For 2004-05, gross fixed capital formation fell 6% on the previous year, while household final consumption expenditure rose by 11%. Of the total private expenditure on education ($19,719m), household final consumption expenditure comprised $18,271m (or 93%).
FUNDING BY EDUCATION SECTOR
The primary and secondary education operating expenses of all levels of government totalled $26,232m in 2004-05 (table 10.34). Operating expenses associated with preschool, special, and other education were $1,978m. 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 $1,145m in 2004-05.
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)
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. The Australian Apprenticeship Scheme received an additional $729m in 2005.
Information supplied by the National Centre for Vocational Education Research shows that VET providers in receipt of public funds primarily receive recurrent revenue from the state and territory governments (48% or $2,758m, in 2005) with additional funds being provided by the Australian Government (33% or $1,897m). The remaining 19% ($1,106m) is made up of on-going (recurrent) revenue earned by the sector from fees and charges arising from fee-for-service activities (11%), student fees and charges (4%) and other ordinary operating activities (4%).
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 Support Act 2003 (Cwlth). In 2005 the operating revenue (before extraordinary items) of these institutions amounted to $13,904m, 42% of which came from Australian Government grants, including those provided 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 2005, 15% of operating revenue was raised from HECS, including 'up-front' student payments. Other fees and charges accounted for a further 23% of operating revenue. These fees and charges included $2,140m from fee-paying overseas students, representing 67% of other fees and charges - a rise of 10% since 2004.
Some institutions rely more heavily than others on fees paid by overseas students. For example, the Central Queensland University, Macquarie University, and the Royal Melbourne Institute of Technology received 46%, 27% and 25% respectively of their revenue from fee-paying overseas students. This is well above the overall national average of 15%.
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.