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This section provides an overview of the sources and distribution of funds in the delivery of education and training in Australia. As most of these funds can ultimately be traced back to government outlays, most of the tables relate to government finance statistics (GFS). GFS data are compiled in accordance with the International Monetary Fund's Government Finance Statistics Manual 2001. GFS education data relate to the activities of the Australian, state and territory governments and, for the purposes of the data presented here, represent the general government sector only. (The general government sector refers to the main functions of government, that is, the provision of non-market services, the regulation of economic and social conditions, and the redistribution of income within the community; these activities are primarily financed by taxation and carried out by government entities.)
While government finance statistics provide an important perspective on education funding, a wider presentation using national accounting data is also important. National accounts data are compiled in accordance with the United Nations System of National Accounts. Within the national accounts framework, the household sector includes both individuals and private non-profit institutions serving households (e.g. non-government schools).
Data for individual time periods are expressed in 'current prices', that is, in terms of prices prevailing at the time. Consequently, changes over time may be affected by price changes.
EDUCATION EXPENSES
Final expenditure on education
Between 2006–07 and 2010–11, national education expenditure in Australia rose from $64 billion to $94 billion (table 12.30). Education spending as a proportion of Australia's GDP rose over the same period from 5.3% to 7.1%.
This peak in education spending featured a doubling of government expenditure on gross fixed capital formation, from $5.5 billion in 2008–09 to $11.1billion in 2009–10, stabilising around this level in 2010–11. The spending increase was associated with the Commonwealth Government's Building the Education Revolution program.
12.30 FINAL EXPENDITURE ON EDUCATION
2006–07
2007–08
2008–09
2009–10
2010–11
Final consumption expenditure
General government
$m
35 273
37 045
41 033
43 425
45 994
Household
$m
21 813
23 427
25 873
28 366
31 071
Total
$m
57 086
60 472
66 906
71 791
77 065
Gross fixed capital formation
General government
$m
3 883
4 349
5 459
11 144
11 538
Private
$m
2 832
3 217
3 182
5 411
5 362
Total
$m
6 715
7 566
8 641
16 555
16 900
National education expenditure
$m
63 801
68 038
75 547
88 346
93 965
Gross domestic product (GDP)
$m
1 201 563
1 246 899
1 263 934
1 293 380
1 320 057
National education expenditure as proportion of GDP
Operating expenses on education are categorised into five main economic types: capital transfers, current transfers, depreciation, non-employee expenses and employee expenses (graph 12.31). The total of all levels of government employee expenses, at 49%, comprised just under half of the total education expenditure. Non-employee expenses and current transfer expenses were each 22% of the total education expenses recorded in 2009–10.
Between 2008–09 and 2009–10, government contributions to operating expenses of primary and secondary education increased by 18% from $33b to $39b (table 12.32). Over the same period, corresponding government contributions to tertiary education, whether university or technical, rose from $23b to $24b. Operating expenses attributed to Education ‘not elsewhere classified’ (n.e.c.), which covers outlays on education affairs and services that cannot be assigned to a particular level of education, also grew, from just under $2b to almost $4b.
12.32 GOVERNMENT CONTRIBUTIONS TO OPERATING EXPENSES ON EDUCATION(a), By purpose
From 2008–09 to 2009–10, there was a 63% increase in Commonwealth government spending on education (graph 12.33). Education expenditure at the state, territory and local government level increased by 13%, while multi-jurisdictional expenses grew by 4%. Overall, education expenditure by Australian governments, once intra-sector transfers areexcluded, grew by 15% from 2008–09 to 2009–10, to a total of $71 billion.
EDUCATION FUNDING
Funds to support educational facilities and the delivery of education services originate from a variety of sources, predominantly grants from the Australian and state and territory governments. Funding is also derived from sales of goods and services including fees and charges for tuition and materials, which vary considerably within the education sector. Other sources of funds may include items such as donations or returns from investments.
Primary and secondary school tuition is free in government schools in all states and territories. Fees may be charged for the hire or purchase of personal educational equipment such as text books or art supplies, and schools may also seek voluntary contributions from parents.
Most non-government schools charge fees which can vary considerably based on educational philosophy and level of government funding. Additional fees may be charged for textbooks, subject materials and extra-curricular activities.
Most vocational education and training (VET) providers charge students fees for the administration of VET courses, for tuition, materials or for student amenities. These fees vary according to the type of course and its duration, and the institution providing the course.
Higher education institutions receive direct grants from government, but also receive revenue from students who are required to contribute to the cost of their education through the Higher Education Loan Program, and from other fee-paying students including overseas students. Many on-campus facilities and services are funded through additional fees, either directly or through a general services fee.
Adult and community education (ACE) courses are usually provided on a fee-paying basis, including when delivered through institutions that may also offer formal VET, schooling or higher education programs. The extent of the fees for ACE may vary considerably due to the diversity of courses and providers available in the sector.
Trade in education services
The total export value of education-related fees and sales of goods and services for Australia in the 2010–11 financial year was $15.8 billion, a 12% reduction compared to 2009–10. This was in contrast to the rapid growth of previous years during which the total export value of the education sector more than doubled from $8.3 billion in 2004 to almost $18 billion in 2009–10.
The interruption to growth in education-related exports was recorded across all education levels, including higher education, VET and schooling, as well as non-award education services. Higher education remained the largest sector contributing to education exports, with $9.4 billion representing 58% of education export earnings. VET contributed a further $4.1 billion, or 28%, of earnings. Overall, 40% of education export earnings were in the form of fees, with the remaining 60% being goods and services. Fees accounted for a slightly larger share of VET income (42%) than higher education income (37%).
The total value of imports of education services, including study overseas, was $914 million in the 2010–11 financial year, resulting in a net international income from education-related goods, services and fees of $14.8 billion.
Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.
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This page first published 24 May 2012, last updated 11 November 2015
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FINANCING EDUCATION
This section provides an overview of the sources and distribution of funds in the delivery of education and training in Australia. As most of these funds can ultimately be traced back to government outlays, most of the tables relate to government finance statistics (GFS). GFS data are compiled in accordance with the International Monetary Fund's Government Finance Statistics Manual 2001. GFS education data relate to the activities of the Australian, state and territory governments and, for the purposes of the data presented here, represent the general government sector only. (The general government sector refers to the main functions of government, that is, the provision of non-market services, the regulation of economic and social conditions, and the redistribution of income within the community; these activities are primarily financed by taxation and carried out by government entities.)
While government finance statistics provide an important perspective on education funding, a wider presentation using national accounting data is also important. National accounts data are compiled in accordance with the United Nations System of National Accounts. Within the national accounts framework, the household sector includes both individuals and private non-profit institutions serving households (e.g. non-government schools).
Data for individual time periods are expressed in 'current prices', that is, in terms of prices prevailing at the time. Consequently, changes over time may be affected by price changes.
EDUCATION EXPENSES
Final expenditure on education
Between 2006–07 and 2010–11, national education expenditure in Australia rose from $64 billion to $94 billion (table 12.30). Education spending as a proportion of Australia's GDP rose over the same period from 5.3% to 7.1%.
This peak in education spending featured a doubling of government expenditure on gross fixed capital formation, from $5.5 billion in 2008–09 to $11.1billion in 2009–10, stabilising around this level in 2010–11. The spending increase was associated with the Commonwealth Government's Building the Education Revolution program.
General government expenses
Operating expenses on education are categorised into five main economic types: capital transfers, current transfers, depreciation, non-employee expenses and employee expenses (graph 12.31). The total of all levels of government employee expenses, at 49%, comprised just under half of the total education expenditure. Non-employee expenses and current transfer expenses were each 22% of the total education expenses recorded in 2009–10.
Between 2008–09 and 2009–10, government contributions to operating expenses of primary and secondary education increased by 18% from $33b to $39b (table 12.32). Over the same period, corresponding government contributions to tertiary education, whether university or technical, rose from $23b to $24b. Operating expenses attributed to Education ‘not elsewhere classified’ (n.e.c.), which covers outlays on education affairs and services that cannot be assigned to a particular level of education, also grew, from just under $2b to almost $4b.
From 2008–09 to 2009–10, there was a 63% increase in Commonwealth government spending on education (graph 12.33). Education expenditure at the state, territory and local government level increased by 13%, while multi-jurisdictional expenses grew by 4%. Overall, education expenditure by Australian governments, once intra-sector transfers are excluded, grew by 15% from 2008–09 to 2009–10, to a total of $71 billion.
EDUCATION FUNDING
Funds to support educational facilities and the delivery of education services originate from a variety of sources, predominantly grants from the Australian and state and territory governments. Funding is also derived from sales of goods and services including fees and charges for tuition and materials, which vary considerably within the education sector. Other sources of funds may include items such as donations or returns from investments.
Primary and secondary school tuition is free in government schools in all states and territories. Fees may be charged for the hire or purchase of personal educational equipment such as text books or art supplies, and schools may also seek voluntary contributions from parents.
Most non-government schools charge fees which can vary considerably based on educational philosophy and level of government funding. Additional fees may be charged for textbooks, subject materials and extra-curricular activities.
Most vocational education and training (VET) providers charge students fees for the administration of VET courses, for tuition, materials or for student amenities. These fees vary according to the type of course and its duration, and the institution providing the course.
Higher education institutions receive direct grants from government, but also receive revenue from students who are required to contribute to the cost of their education through the Higher Education Loan Program, and from other fee-paying students including overseas students. Many on-campus facilities and services are funded through additional fees, either directly or through a general services fee.
Adult and community education (ACE) courses are usually provided on a fee-paying basis, including when delivered through institutions that may also offer formal VET, schooling or higher education programs. The extent of the fees for ACE may vary considerably due to the diversity of courses and providers available in the sector.
Trade in education services
The total export value of education-related fees and sales of goods and services for Australia in the 2010–11 financial year was $15.8 billion, a 12% reduction compared to 2009–10. This was in contrast to the rapid growth of previous years during which the total export value of the education sector more than doubled from $8.3 billion in 2004 to almost $18 billion in 2009–10.
The interruption to growth in education-related exports was recorded across all education levels, including higher education, VET and schooling, as well as non-award education services. Higher education remained the largest sector contributing to education exports, with $9.4 billion representing 58% of education export earnings. VET contributed a further $4.1 billion, or 28%, of earnings. Overall, 40% of education export earnings were in the form of fees, with the remaining 60% being goods and services. Fees accounted for a slightly larger share of VET income (42%) than higher education income (37%).
The total value of imports of education services, including study overseas, was $914 million in the 2010–11 financial year, resulting in a net international income from education-related goods, services and fees of $14.8 billion.