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1301.0 - Year Book Australia, 2004  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 27/02/2004   
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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, government expenditure on education refers to expenditure on all sectors of education, such as preschool, primary, secondary, university, and technical and further education (TAFE), but excludes expenditure on courses provided by non-educational institutions, such as the vocational training programs of private businesses.

Government operating expenses include items such as employee expenses (e.g. wages and salaries) and current transfer expenses (e.g. living allowances for students). The total operating expenses for all governments increased from $31,050m in 1998-99 to $37,546m in 2001-02 (table 10.1). As a percentage of gross domestic product, government operating expenses on education were 5.3% in 2001-02, having remained relatively constant since 1998-99.

Over the four-year period, net acquisition of non-financial assets increased from $87m in 1998-99 to $801m in 2001-02. Net acquisition of non-financial assets includes expenditure on new and second-hand fixed assets. Within the context of education, such assets include construction work, and expenditure on equipment and buildings.

Sales of goods and services, which includes items such as student fees and charges made by governments and education institutions in exchange for educational services provided, totalled $6,181m in 2001-02.

10.1 GOVERNMENT EXPENDITURE ON EDUCATION(a)

Units
1998-99
1999-00
2000-01
2001-02

Operating expenses
$m
31,050
32,273
34,957
37,546
Net acquisition of non-financial assets
$m
87
303
471
801
Sales of goods and services
$m
4,615
5,149
5,526
6,181
Gross domestic product (GDP)
$m
591,917
628,621
669,307
712,980
Operating expenses as a proportion of GDP
%
5.2
5.1
5.2
5.3

(a) Figures expressed as current prices. Changes between years will include price effects.
Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2001-02 (5518.0.55.001).

Private expenditure on education (which comprises household final consumption expenditure plus gross fixed capital formation) was $11,445m in 2001-02. Private expenditure data include items such as school fees and the construction of private school buildings, but exclude items such as school books and uniforms. It is important to note that government expenditure on education and private expenditure on education estimates cannot simply be added together to derive an estimate of total expenditure on education because this will result in some double-counting.

Table 10.2 presents the total government operating expenses on education in 2001-02 by purpose. Primary and secondary education expenses were $21,283m, comprising 56.7% of these expenses, followed by university education (25.9%), and TAFE (10.4%). Total government operating expenses include depreciation of fixed assets, but do not include capital expenditure.

10.2 GOVERNMENT OPERATING EXPENSES ON EDUCATION, By purpose - 2001-02

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

Primary and secondary education
5,789
21,092
-
26,883
5,599
21,283
Tertiary education
University education
4,034
121
9,806
13,961
4,243
9,717
Technical and further education
1,137
3,757
-
4,894
998
3,896
Tertiary education n.e.c.
-
23
-
22
-
23
Total
5,171
3,900
9,806
18,876
5,241
13,635
Preschool, special, and other education
190
1,147
-
1,336
191
1,146
Transportation of students
-
900
-
900
-
900
Other education expenses
551
30
-
580
-
581
Total government operating expenses on education
11,701
27,068
9,806
48,578
11,029
37,546

(a) The multi-jurisdictional sector currently contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear. The main type of units falling into this category are public universities.
(b) Total equals total sectors minus intra-sector transfers.
Source: ABS data available on request, Government Finance Statistics.

Table 10.3 shows the components of government operating expenses on education by economic transaction type in 2001-02. Employee expenses accounted for 55.1% of total government operating expenses, with the balance largely in non-employee expenses (23.3%) and current transfer expenses (16.7%).

10.3 GOVERNMENT OPERATING EXPENSES ON EDUCATION, By economic transaction - 2001-02

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

Employee expenses
64
15,178
5,462
20,705
-
20,704
Non-employee expenses
244
5,250
3,269
8,764
17
8,746
Depreciation of fixed assets
9
974
697
1,679
-
1,679
Current transfer expenses
11,015
5,521
377
16,912
10,631
6,282
Capital transfer expenses
370
146
-
517
381
134
Total government operating expenses on education
11,701
27,068
9,806
48,578
11,029
37,546

(a) The multi-jurisdictional sector currently contains units where jurisdiction is shared between two or more governments, or classifications of a unit to a jurisdiction is otherwise unclear. The main type of units falling into this category are public universities.
(b) Total equals total sectors minus intra-sector transfers.
Source: Government Finance Statistics, Education, Australia - Electronic Delivery, 2001-02 (5518.0.55.001).

Table 10.4 summarises Commonwealth Government grants to the states and territories for education in 2001-02. The major beneficiary of Government grants (both current and capital) was primary and secondary education, receiving 52.4% of the total granted (both current and capital) for education. Universities received 36.4% of the total granted, and 9.4% was directed to TAFE.

10.4 COMMONWEALTH GOVERNMENT GRANTS FOR EDUCATION(a)

2000-01
2001-02
$m
$m

Current grants to states, territories and universities
Primary and secondary education
4,852
5,258
Technical and further education
916
997
Universities
3,657
3,844
Other education
107
186
Total
9,532
10,285
Capital grants to states, territories and universities
Primary and secondary education
315
324
Technical and further education
-
-
Universities
42
33
Other education
1
4
Total
358
362
Total grants to states, territories and universities
Primary and secondary education
5,167
5,582
Technical and further education
916
997
Universities
3,698
3,877
Other education
108
190
Total
9,889
10,645

(a) Figures expressed in current prices. Changes between years will include price effects.
Source: ABS data available on request, Government Finance Statistics.

Funding of schools

The primary and secondary education operating expenses of Australian governments totalled $21,283m in 2001-02. Operating expenses associated with preschool, special, and other education were $1,146m. State and territory governments also contributed funds to other aspects of schooling such as student transport, totalling $900m in 2001-02. As shown in table 10.2, preschool, primary, secondary, special school and other education expenses were largely met by state and territory 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 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.

Funding of Vocational Education and Training (VET)

Information supplied by the Australian National Training Authority shows that VET providers in receipt of public funds primarily receive revenue from the state and territory governments (57% or $2,467m in 2002), with additional funds being provided by the Australian Government (22% or $966m). The remaining 21% ($925m) is made up of 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 exclude 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 2002), 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.

Funding of higher education

Most higher education institutions are funded by the Australian Government under the Higher Education Funding Act 1988 (Cwlth). In 2001-02 the operating revenue (before abnormals) of these institutions amounted to $10,202m, 44% of which came from Government grants. 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 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 2001-02, 17.4% of operating revenue was raised from HECS, while other fees and charges accounted for a further 19.8% of operating revenue. These fees and charges included $1,163.5m from fee-paying overseas students, representing 58% of other fees and charges - a rise of 23% since 2000-01.

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 35.0%, 24.6% and 23.0% respectively of their revenue from fee-paying overseas students. This is well above the overall national average of 11.4%.

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