Education and skills - overview


Budget Review 2010-11 Index

Budget 2010–11: Education and skills

Overview

Marilyn Harrington and Coral Dow

An estimated $33 billion will be spent on education in 2010–11. The budget estimates in Budget Strategy and Outlook: Budget Paper No. 1: 2010–11 indicate a decline in funding from 2009–10 to 2011–12, which mostly reflects the end of the Building the Education Revolution (BER) economic stimulus initiatives. From 2010–11 the Budget estimates and projections show a progressive return, in nominal terms, to the usual pattern of Commonwealth support for education, particularly school education.[1]

The education focus of the 2010–11 Budget is the vocational education and training (VET) sector, presented under the banner, Skills for Sustainable Growth. However, in spite of this focus, VET expenditure is expected to decline by 10.7 per cent in real terms from 2010–11 to 2013–14. As explained in the separate analysis of the VET budget measures which follows, these measures are essentially a restructuring of Commonwealth VET programs, with expenditures offset partly by declines in expenditure resulting from the cessation of programs or a redirection of funding from other programs.

School education and higher education are not a particular focus of the 2010–11 Budget. Higher education was a feature of the 2009–10 Budget which funded the Government’s response to the Review of Australian Higher Education (the Bradley Review) and introduced new indexation arrangements. The new school education policy framework, particularly for government schools, was embedded through the new federal financial relations framework, set in place in 2009 by the Intergovernmental Agreement on Federal Financial Relations.[2]

School education

In 2010–11 ongoing funding for school education, as provided through the National Schools Specific Purpose Payment (SPP), amounts to an estimated $10.5 billion, of which two-thirds ($6.9 billion) is allocated to non-government schools and the remainder ($3.5 billion) to government schools. There is also funding for the various National Partnerships (including teacher quality, assisting low socio-economic status school communities, literacy and numeracy, the Digital Education Revolution and Trade Training Centres National Partnerships) as well as the remaining BER funding ($5.4 billion). The Budget projects that ‘core’ funding for government schools is expected to increase at a real average annual rate of 4.3 per cent over the forward estimates. Although the Budget does not provide a similar calculation for non-government schools, applying a similar methodology to the non-government schools SPP amounts, calculations using the Budget’s CPI forecasts indicate that funding for non-government schools will increase at a real average annual rate of 5.1 per cent over the forward estimates.

While funding for school education is not a feature of this Budget, it will be a focus of attention as the Government’s school funding review (due to conclude in 2011) gets underway. Originally announced as a review of the non-government schools funding system, the review’s ambit has been broadened to include funding for government schools.[3]

Higher education

Higher education was a highlight of the 2009–10 Budget when the Government resourced significant reforms of the sector. As a result, the 2010–11 Budget has no new higher education initiatives. Funding for higher education is an estimated $8.1 billion in 2010–11, with an expectation that expenses will ‘increase by 4.0 per cent in real terms over the forward years’. The increased expenses are largely the result of funding to student places which have been higher than estimated since the Government allowed universities to over-enrol by ten per cent in 2010 and 2011. Despite commencement of the student demand driven ‘voucher’ system in 2012, the Government expects student demand to ‘moderate from 2011–12’.

The student assistance sub-function includes expenses relating to the Higher Education Loan Program (HELP). Reflecting the increased 2010 enrolments, HELP expenses are estimated to be $1.0 billion in 2010–11 and then, despite the Government’s expectation that student demand will moderate from 2011–12, ‘to rise by 11.7 per cent in real terms from 2010–11 to 2013–14’.

The 2009–10 revised estimates for higher education are down from $8.0 billion to $7.5 billion. This is partly due to the expectation in 2009 that infrastructure spending from the Education Investment Fund (EIF) and Higher Education Special Projects would significantly increase expenses in higher education.[4] EIF Round 3 projects, due to be announced in early 2010, are now expected in July 2010. Consequently, estimated expenses from the EIF, initially expected to tail off by 2012–13, now show a rise in 2013–14.[5]



[1].    The budget figures in this brief have been taken from the following documents unless otherwise sourced: Australian Government, Budget strategy and outlook: budget paper no. 1: 2010–11, Commonwealth of Australia, Canberra, 2010; and Australian Government, Australia’s federal relations: budget paper no. 3: 2010–11, Commonwealth of Australia, Canberra, 2010. 

[2].    For further information, see ‘Education’, in Australia. Parliamentary Library, Budget review 2009–10, Research paper, no. 33, Parliamentary Library, Canberra, 2009, pp. 123–35, viewed 13 May 2010, http://www.aph.gov.au/library/pubs/rp/2008-09/09rp33.pdf

[3].    For further information, see Department of Education, Employment and Workplace Relations (DEEWR), ‘Review of funding for schooling’, DEEWR website, viewed 14 May 2010, http://www.deewr.gov.au/Schooling/Programs/Pages/FundingReview.aspx

[4].    Australian Government, Budget strategy and outlook: budget paper no. 1: 2009–10, Commonwealth of Australia, Canberra, 2009, p. 6-18.

[5].    Australian Government, Portfolio budget statements 2010–11: budget related paper no. 1.6: Education, Employment and Workplace Relations Portfolio, Commonwealth of Australia, Canberra, 2010, p. 88; and Australian Government, Portfolio budget statements 2009–10: budget related paper no. 1.5: Education, Employment and Workplace Relations Portfolio, Canberra, Commonwealth of Australia, 2009, p. 108.

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