Contents

Current Issues

Commonwealth Education Funding Statistics

E-Brief: Online Only issued 24 October 2001

Kim Jackson, Analysis and Policy
Social Policy Group

Introduction

Parliamentary and public debates about Commonwealth education programs often focus on funding issues, with recourse to various expenditure figures. The purpose of this brief is to describe the sources of these statistics and to provide links to the data available online.

The brief also contains a number of tables which summarise Commonwealth education expenditure.

Australian Bureau of Statistics

The series Expenditure on Education (Catalogue No.5510.0) contained information on both government (Commonwealth, State and local) and private expenditure on education, with an emphasis on the public sector. The latest (and last) issue was for 1997-98, containing data for 1992-93 and subsequent years. This series has been replaced by the Special Data Service Government Finance Statistics Education Australia (Catalogue No.5518.0), which only deals with government expenditure. The 1998-99 data is summarised in this page.

Commonwealth Budget Papers

The Commonwealth Budget Papers for the last six years are available online and can be accessed from this page. The main educational expenditure statistics presented in the 2001-02 Budget Papers can be categorised as follows:

• expenditure by portfolio;
• expenditure by function; and
• specific purpose payments.

These are described in more detail below.

Portfolio Expenditure

Most of the educational expenditure figures in the Budget Papers relate to the activities of the Department of Education, Training and Youth Affairs (DETYA). These are generally presented as estimates for the past and current financial years (2000-01 and 2001-02). The most detailed presentation of these figures is in the Portfolio Budget Statements 2001-02.

In line with the outcome/output framework introduced with accrual accounting in the 1999-2000 Budget, the Department has presented its programs as directed towards three broad outcomes related to:

• school systems (Outcome 1);
• post-secondary education and training (Outcome 2); and
• research training and activity, with international education programs (Outcome 3).

Each outcome is said to be the result of the activity of three or four 'output groups' that are functional groupings of the Department's programs. Output groups in turn comprise:

• 'administered expenses' or 'administered appropriations' - these are the grants, subsidies and benefits paid by the Department; and
• the 'price of departmental outputs' or 'departmental appropriations' - these are essentially the administrative costs of the department.

The breakdown in funding between these categories for each outcome is presented in three tables:

• Total Resources for Outcome 1;
• Total Resources for Outcome 2; and
• Total Resources for Outcome 3.

It should be noted that the departmental outputs of the Australian National Training Authority (ANTA) and the Australian Research Council (ARC) are recorded separately at:

• Resources for ANTA; and
• Resources for ARC.

One particularly useful table is presented in Appendix 4. This contains a breakdown of DETYA's 'Administered Items' for 2000-01 to 2004-05.

The Portfolio Budget Statements are intended to enable the assessment of the financial impact of specific budget measures, but they are of limited value in assessing historical trends and the performance of programs. This is because:

• the introduction of accrual budgeting in the 1999-2000 Budget resulted in a complete break with previous budget statistical presentations; and
• the broadness of the 'Outcomes and Output Groups' structure adopted by DETYA restricts the analysis of current programs.

For example, Output Group 2.1 (infrastructure funding for post-secondary education) incorporates both the higher education system and vocational education and training (VET) activities. Programs for these sectors have quite disparate administrative, legislative, reporting and delivery arrangements and could only be properly evaluated as separate entities.

The output/outcomes presentation is intended to facilitate an analysis of the effectiveness of Commonwealth expenditure by matching it with specific objectives and relevant performance indicators. However, around 80 per cent of DETYA's resources are devoted to Output Groups 1.1 and 2.1. These comprise the Commonwealth's contribution to the infrastructure of the school, VET and higher education sectors. Many of the performance indicators for these items deal with the output of an entire sector and thus are also reflections of decisions made by other stakeholders. The Commonwealth's capacity to influence each sector will vary with its funding role: it provides around 30 per cent of government funding for schools, 25 per cent of the operating revenues for the publicly funded VET system, and just under 50 per cent of university income (excluding HECS). The accrual based outcome/output framework requires meaningful performance information to be effective and this will always be a difficulty when most of the Department's expenditure is necessarily expressed as broad educational outcomes in a federal context.

Expenditure by Function

Before the introduction of accrual accounting in the 1999-2000 Budget, the annual Budget Papers contained a series of historical tables of Commonwealth outlays by function which contained expenditure for the previous ten years. This analysis was also useful because portfolio and functional outlays are not necessarily identical ie. not all education expenditure occurs under the auspices of DETYA or, conversely, some DETYA outlays may not be concerned with education. The functional outlays included the following presentations:

• outlays ($ million) by function and sub-function;
• annual percentage changes in outlays by function;
• outlays on each function as a percentage of total outlays.

The last set of these tables was in the Statistical Appendix of Statement 4 of Budget Paper No.1 1998-99 (this is a pdf file - alternative formats can be downloaded from this page). Users should ignore the figures for 1998-99 and later years as these are outdated estimates and projections.

The following table presents some of this data for the Education function for the years, 1988-89 to 1997-98. Readers should note that these figures are derived from the former cash based system of budget accounting and are not directly comparable with those in Table 2.

Table 1
Commonwealth Outlays on Education, 1988-89 to 1997-98

Source: Statistical Appendix of Statement 4 of Budget Paper No.1 1998-99

Functional analysis of outlays made a limited return in the 2000-01 Budget papers. Table C1 of Appendix C to Statement 6 of Budget Paper No.1 2001-02 contains estimates and projections of Commonwealth General Government Expenses by Function and Sub-function for the years 2000-01 to 2004-05. The 2000-01 final figures or 'outcome' are given in Table B1 of Appendix B (pdf file) to the Treasury paper Final Budget Outcome 2000-01 (September 2001). The following table combines the education data from these sources and the 1999-2000 Final Budget Outcome.

Table 2
Commonwealth General Government Expenses on Education, 1999-2000 to 2004-05

Sources: Table A4 of Appendix C to Statement 6 of Budget Paper No.1 2001-02 and the Final Budget Outcome 1999-2000 and 2000-01.

It should be noted that the huge decline in student assistance from 1997-98 ($1859 million) to 1999-2000 ($644 million) is not due to the new accounting system or a reduction in expenditure, but is a result of the transfer of Austudy payments for those aged less than 25 years to the Youth Allowance, which is classified under the Social Security and Welfare function.

Specific Purpose Payments

Most of Commonwealth expenditure on schools is in the form of specific purpose payments to the States. Details of these grants are given in Appendix B to Budget Paper No.3, Federal Financial Relations 2001-02. The tables include:

• total (all States combined) current and capital payments for each schools program, 2000-01 to 2004-05 (Table B1);
• current and capital payments for each State and Territory, 2000-2001 (Table B2) and 2001-02 (Table B3).

Final outcome figures for 2000-01 are given in Table 30 of Part IV of Final Budget Outcome 2000-01.

DETYA Annual Reports

DETYA Annual Reports since 1995-96 can be obtained from this page.

The 1999-2000 Annual Report is the first presented in the outcomes-outputs format introduced in May 1999 with the 1999-2000 Budget Papers. It contains the final accounting for expenditure for that financial year, namely:

• Table 2 in Chapter 4 for Outcome 1;
• Table 6 in Chapter 5 for Outcome 2; and
• Table 21 in Chapter 6 for Outcome 3.

These tables are analogous to the outcome tables in the Budget Portfolio Statements, except that they present actual, rather than 'estimated actual', expenditure for 1999-2000.

The structural deficiencies of the outcomes-outputs approach when dealing with the performance of broad education sectors in a federal context are discussed in the section on the Budget Papers above. The Annual Report attempts to overcome this problem by presenting a wide variety of performance information delivered, wherever possible, ‘with trend data so that current performance can be measured against historical performance’ (p.20). Unfortunately, no trend data for program expenditure is provided so that it is not possible to correlate movements in the ‘resources invested’ (ie. expenditure) with those in the indicators that are said to reflect the performance of those resources.

The outcomes-output presentation is more pertinent when dealing with the DETYA's own performance, as opposed to that of its programs or 'administered expenses'. Appendix 6 contains an informative range of indicators relating mainly to the Department's own outputs.

The Financial Statements of the Department (Appendix 7) are a detailed accounting of the Department’s operations in terms of the Financial Management and Accountability Act 1997, but necessarily contain little information bearing on the efficacy of the department's programs. However, Note 17 ‘Reporting by Outcomes’ contains a number of summary tables of outcomes data.

Appendix 8 presents a range of financial and other information relating to the Higher Education Contribution Scheme (HECS). This, together with the section on HECS in the Higher Education Funding Report, is the principal source of information on the operation of the scheme. There is no current equivalent to the detailed reports published by the former Higher Education Council, as the section of the Employment, Education and Training Act 1988 requiring them has been repealed. See the Parliamentary Library e-brief on HECS for more information on this subject.

Funding Statistics by Sector

Although the Australian Bureau of Statistics and the Budget Papers report Commonwealth education expenditure for financial years, the main programs for each sector are actually legislated on a calendar year basis. Funds are provided for these programs through the following Acts:

• the Higher Education Funding Act 1988 and the Australian Research Council Act 2001 for universities;
• the States Grants (Primary and Secondary Education Assistance) Act 1996 for schools; and
• the Vocational Education and Training Funding Act 1992 and the Australian National Training Authority Act 1992 for the vocational education and training (VET) sector.

There are a variety of reports and other documents detailing the funding of these programs. Those that are available online are described below.

Schools

Section 90 of the States Grants (Primary and Secondary Education Assistance) Act 1996 requires the production of an annual report detailing the grants made under the legislation. The most recent report (1999) can be downloaded from this DETYA page. The reports for 1997 and earlier years contained the recurrent and capital grants received by each non-government school in Australia, but subsequent reports provide only summary tables for each State.

Appendix D of the Quadrennial Administrative Guidelines for Commonwealth Schools Programs contains a table summarising the total grants available for each program in 2001.

The National Reports on Schooling published annually by the Ministerial Council on Education, Employment and Youth Affairs (MCEETYA) contain a large number of funding and other statistics. The reports since 1996 can be accessed from this page. The most recent is the National Report on Schooling in Australia 1999. The main funding tables are:

• Table 16.1 Commonwealth grants for schools by program and category of school, States and Territories, 1999 (in Chapter 16 - a pdf file);
• Tables 26-38 (in Appendix 1 - a pdf file), which describe the resources available from all sources in government and non-government schools.

The table below summarise Commonwealth grants for schools since 1990.

Table 3
Commonwealth School Programs, 1990 to 2000

Sources: annual reports on financial assistance granted under the States Grants (Primary and Secondary Education Assistance) Act 1996 and 1992.

Vocational Education and Training (VET)

The Annual National Report of the Australian Vocational Education and Training System produced by the Australian National Training Authority contains VET financial statistics. Tables 1 and 2 in Volume 1 of the Report give a breakdown of operating and capital revenue, by source of funds and by State. ANTA Annual National Reports and other publications can be accessed from this page.

The following table gives Commonwealth sourced revenue that has been paid through ANTA or directly to state and territory training authorities or public providers. It does not include direct payments to private providers made by DETYA, as these are not reported in the Annual National Report of the Australian Vocational Education and Training System.

Table 4
Commonwealth Grants for the Public VET System, 1995 to 2000

Source: ANTA, Annual National Report of the Australian Vocational Education and Training System.

Information on current programs can be obtained from the document Directions and Resource Allocations 2001 available from the ANTA web site, although the download procedure is extremely cumbersome.

The National Centre for Vocational Education Research has tables of financial data for 2000.

Higher Education

Section 119 of the Higher Education Funding Act 1988 requires the Minister to table an annual report setting out the funding determinations made under the Act. However, the Department does not seem to have made these available online.

The Higher Education Report for the 2001 to 2003 Triennium (March 2001) published by DETYA contains many funding tables relating to Commonwealth programs. The most useful of these are:

• Table 3.2 (Commonwealth funding available for higher education, 2000-2003) which contains the annual allocations for each program over the triennium; and
• Table 4.11 (Commonwealth fully-funded places and operating grants, 2001-2003) which provides the annual operating grant and student load for each institution.

Funding figures in the above tables are expressed in a nominated price levels which change each year. This precludes a ready comparison with the figures for previous years contained in earlier triennial funding reports, unless adjustments are made using the Higher Education Cost Adjustment Factors.

DETYA, Selected Higher Education Finance Statistics contains a breakdown of revenue and expenditure for each higher education institution. The most recent issue, relating to 1999, can be downloaded from this page.

DETYA, Selected Higher Education Research Expenditure Statistics contains a breakdown of research expenditure, by institution, field of research, type of activity, source of funds and socio-economic objectives. The most recent issue, relating to 1998, can be downloaded from this page.

The Australian Vice-Chancellors' Committee (AVCC) has produced Key Statistics on Higher Education (September 2001) which contains many tables of funding and other data. To obtain this document, click on the links labelled 'University Funding and Expenditure' on this page. The funding information in this publication is largely derived from the AVCC's funding tables. These are particularly useful because they present figures for the period 1983 to 2003 adjusted for cost factors. There are also a number of tables which contain per student funding figures. This permits a more accurate assessment of the actual resources available to higher education institutions and funding trends over time.

The following table presents some of the AVCC data relating to Commonwealth higher education grants since 1983.

Table 5
Commonwealth Funding Available to Higher Education Institutions, 1983-2003 (constant 2001 price levels)

Source: AVCC, Key Statistics on Higher Education (September 2001), Table A.1.

Recent Reports and Studies

Bob Lenahan, Gerald Burke and Hing Tong Ma, Selected Asian Economies and Australia: An Overview of Educational Expenditure and Participation (1998). This report was commissioned by DETYA. Countries examined were China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

Phil Aungles, Tom Karmel and Tim Wu, Demographic and Social Change: Implications for Education Funding (May 2000). A DETYA paper containing funding projections for the next twenty years.

Sally Borthwick, Overview of Student Costs and Government Funding in Post-compulsory Education and Training (October 1999). Covers government funding, unit costs, the cost to individuals and public subsidies to students.

Review of Higher Education Financing and Policy (April 1998). The final report of the review, submissions and discussion papers are available online.

For copyright reasons some linked items are only available to Members of Parliament.

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