Hazel Ferguson and Marilyn Harrington
Education and training expenses comprise education
expenditure reported in the Budget under the 'Education’ function and vocational
and industry training under the ‘Total labour and employment affairs’
sub-function of the ‘Other economic affairs’ function.
The Education function expenses consist of:
- higher education, which includes higher education course
subsidies for domestic students, primarily at undergraduate level, through the Commonwealth
Grant Scheme (CGS); Research Block Grants
(RBGs) to support higher education research; and a range of smaller supporting
and enabling programs such as the Higher
Education Participation and Partnerships Program (HEPPP)—it excludes
research funding outside the Education and Training portfolio, as well as Australian
Research Council programs and Department of Education and Training expenditure
on research capacity, which are part of the ‘General research’ sub-function of
the ‘General public services’ function, which is discussed in General public service and other purposes
- vocational and other education, which is primarily made up of
Commonwealth funding to the states and territories through the National
Partnership on the Skilling Australians Fund (SAF) for projects to
support apprentices and trainees, as detailed in Budget Paper No. 3, but
also includes special education and adult education programs such as the Adult
Migrant English Program
- school education, which mostly comprises specific purpose funding
for government and non-government schools to the states and territories under
the Australian Education Act 2017 (known as ‘Quality Schools’ funding),
and which is detailed in Budget Paper No. 3
- school education—specific funding, which mainly consists of early
childhood education funding provided under the National
Partnership Agreement on Universal Access to Early Childhood Education
and
- student assistance, which includes student income support
payments such as Youth
Allowance, and student loans through the Higher
Education Loan Program (HELP).
Vocational and industry training expenses includes
expenditure on the Australian Government’s own apprenticeship schemes, such as
the Australian
Apprenticeships Incentives Program and Trade
Support Loans.
Key figures
Education expenditure in 2019–20 will be an estimated $36.4
billion (Table 1 below), representing 7.3 per cent of the Australian
Government’s total estimated expenditure (Table 2 below) and 1.8 per cent of
estimated Gross Domestic Product (GDP) (Table 3 below). From 2019–20 to
2022–23, education expenses are estimated to grow in real terms (accounting for
inflation) by 4.8 per cent.
Expenditure on vocational and industry training in 2019–20 will
be an estimated $1.2 billion (Table 4 below). From 2019–20 to 2022–23,
these expenses are estimated to increase in real terms by
6.8 per cent.
Table 1: Education expenses, $ million
|
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Higher
education |
9
704 |
9
856 |
10
118 |
10
256 |
10
372 |
| Vocational
and other education |
1
675 |
1
699 |
1
697 |
1
723 |
1
620 |
| Schools |
19
641 |
20
880 |
22
513 |
23
917 |
25
365 |
Non-government
schools
|
11
956 |
12
554 |
13
518 |
14
245 |
14
980 |
Government
schools
|
7
684 |
8
326 |
8
995 |
9
673 |
10
385 |
| School
education—specific funding |
691 |
742 |
561 |
209 |
151 |
| Student
assistance |
2
675 |
2
753 |
2
767 |
2
849 |
3
011 |
| General
administration |
388 |
420 |
391 |
385 |
374 |
| Total |
34
773 |
36
350 |
38
047 |
39
339 |
40
893 |
Note: Figures may not add due to rounding.
Source: Australian Government, Budget Strategy and Outlook: Budget
Paper No. 1: 2019–20, p. 5-17.
Figure 1: estimates of Australian Government education
expenses
Source: Australian Government, Budget Strategy and Outlook: Budget
Paper No. 1: 2019–20, p. 5-17.
Table 2: education expenses as a proportion of total Australian
Government expenses, %
|
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Higher education |
2.0 |
2.0 |
2.0 |
1.9 |
1.9 |
| Vocational and other education |
0.3 |
0.3 |
0.3 |
0.3 |
0.3 |
| Schools |
4.0 |
4.2 |
4.4 |
4.5 |
4.5 |
Non-government schools
|
2.5 |
2.5 |
2.6 |
2.7 |
2.7 |
Government schools
|
1.6 |
1.7 |
1.7 |
1.8 |
1.9 |
| School education - specific
funding |
0.1 |
0.1 |
0.1 |
0.0 |
0.0 |
| Student assistance |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
| General administration |
0.1 |
0.1 |
0.1 |
0.1 |
0.1 |
| Total |
7.1
|
7.3
|
7.4
|
7.3
|
7.3
|
Note: Figures may not add due to rounding.
Source: Parliamentary Library estimates.
Table 3: education expenses as a percentage of GDP, %
|
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Higher education |
0.50 |
0.49 |
0.49 |
0.47 |
0.46 |
| Vocational and other education |
0.09 |
0.08 |
0.08 |
0.08 |
0.07 |
| Schools |
1.01 |
1.04 |
1.08 |
1.10 |
1.12 |
Non-government schools
|
0.62 |
0.63 |
0.65 |
0.66 |
0.66 |
Government schools
|
0.40 |
0.42 |
0.43 |
0.44 |
0.46 |
| School education - specific
funding |
0.04 |
0.04 |
0.03 |
0.01 |
0.01 |
| Student assistance |
0.14 |
0.14 |
0.13 |
0.13 |
0.13 |
| General administration |
0.02 |
0.02 |
0.02 |
0.02 |
0.02 |
| Total |
1.79
|
1.81
|
1.83
|
1.81
|
1.80
|
Source: Parliamentary Library estimates.
Table 4: vocational and industry training expenses, $
million
|
2018–19
(est.) |
2019–20
(est.) |
2020–21
(est.) |
2021–22
(proj.) |
2022–23
(proj.) |
| Labour
and employment affairs—Vocational and industry training |
1
172 |
1
173 |
1
216 |
1
259 |
1
344 |
Note: Figures may not add due to rounding.
Source: Australian Government, Budget Strategy and Outlook: Budget
Paper No. 1: 2019–20, p. 5-39.
Key drivers and significant policy
announcements
Early childhood education
In January 2019, the Government announced
the extension of funding ($440.0 million for the 2019 calendar year) for
the National
Partnership on Universal Access to Early Childhood Education. The
2019–20 Budget has extended funding for the National Partnership for another
year (covering the 2020 calendar year) by providing $453.1 million over two
years from 2019–20. This extension is amongst the top ten major initiatives
identified in the Budget
Overview (p. 34).
The noticeable decrease in the forward estimates in the ‘School education—specific funding’ sub-function (Table 1 above)
is accounted for by the non-continuation of the National Partnership after
2020. The extension of the National Partnership on a yearly basis
has been the practice since 2015. This yearly extension of the National
Partnership has continued in spite of continuing concerns by the early childhood education sector about the uncertainty that this creates.
There are also persistent calls, including by
the Review
to Achieve Educational Excellence in Australian Schools through Early Childhood
Interventions which was commissioned by all state and territory
governments, for the National Partnership to be extended to
three-year-olds, particularly as evidence shows that two years of preschool has
more impact than one, especially for developmentally vulnerable children. Labor
has responded to this call by announcing its commitment to extend preschool
access to three-year-olds with its proposed National Preschool and Kindy Program.
School education
School education expenses will be an estimated $20.9 billion
in 2019–20, which is 1.0 per cent of GDP (0.4 per cent for government schools
and 0.6 per cent for non-government schools), and will increase in real terms
by 13.2 per cent from 2019–20 to 2022–23. According to Table 3.1 in Budget
Paper No. 1, funding for government and non-government schools are amongst
the top 20 programs by expenses in 2019–20.
Government school expenses are expected to increase more in
real terms than expenses for non-government schools (16.2 per cent compared to 11.2
per cent) from 2019–20 to 2022–23. However, the ongoing pattern
of Australian Government funding for schools remains; that is, the majority of
Australian Government funding is provided to non-government schools and state
and territory governments provide most of the funding for government schools.
Thus, in 2022–23, government schools will receive an estimated 40.9 per cent
of total Australian Government school funding.
School education expenses include additional funding for
non-government schools as part of the Government’s response to the National
School Resourcing Board’s review of the socio-economic status (SES) score
methodology. The SES score determines, for most non-government schools, a
school community‘s ‘capacity to contribute’ to their school’s operating costs
and hence the level of Australian Government base per-student funding.
The additional funding was first
announced by the Prime Minister and the Minister for Education in September
2018 and the initial tranche provided in the Mid-Year
Economic and Fiscal Outlook (MYEFO) 2018–19 (pp. 170–71). The
funding includes: $3.2 billion over 11 years from 2019–20 to implement the new
methodology (based on parental income) for calculating a school’s capacity to
contribute; $170.8 million to provide ‘funding certainty’ for
non-government schools in 2019; and $1.2 billion over ten years from 2020–21 to
establish a new fund to address ‘specific challenges’ in the non-government
school sector.
The Shadow Minister for Education, Tanya Plibersek, has stated
that Labor has ‘matched the government on funding for Catholic and independent
schools.’ Labor
has also committed to providing an additional $14.0 billion for public
schools over the next decade, $3.3 billion of which will be provided ‘in
the first three school years’.
The 2019–20 Budget announcements do not substantially alter
existing arrangements (Table 5 below sets out expenses for significant policy
announcements). A one-year Local School Community Fund (LSCF), which will
provide ‘equipment, upgrades or programs’ to ‘local’ schools, appears to be a
small-scale program—the Minister for Education in his budget
media release advises that $200,000 will be provided to each federal
electorate. Given the number of schools in each electorate, it is possible that
not all schools will receive funding—there is no information in the budget
documents about how LSCF projects will be determined.
The initiatives to support students and teachers build on a
suite of related MYEFO
2018–19 measures
(pp. 170–171). These measures included: $9.8 million over four years for
non-government distance education schools (details of this funding was not
provided); $2.9 million over two years for non-government schools experiencing
‘unforeseen, short-term financial difficulties’; $2.8 million to extend the Flexible
Literacy for Remote Primary Schools Program pilot; and $0.5 million over
two years for the Music Count Us
In program.
Among the new initiatives, the Government extends its
commitment to arts
education programs, and provides $9.5 million over four years for online
mathematics and phonics teaching and learning resources.
The Budget also continues funding for the National
School Chaplaincy Programme (NSCP) by providing $61.4 million in
2022–23 (Budget
Paper No. 3, p. 32), in accordance with the Government’s
commitment in the 2018–19 Budget to fund the NSCP on a permanent basis.
Higher education
Higher education expenses will be an estimated $9.9 billion
in 2019–20, and are estimated to decrease by 1.9 per cent in real terms from
2019–20 to 2022–23. This decrease is driven primarily by constraints on CGS and
RBG funding growth, introduced in the MYEFO
2017–18 (p. 143) and MYEFO 2018–19
(p. 169), respectively. The CGS is one of the top twenty programs by expenses
in 2019–20, and 73.2 per cent of higher education expenditure.
Sector stakeholders represented by Universities
Australia favour demand driven funding under the CGS, which was in place
from 2010 and fully implemented from 2012 to 2017. However, this Budget estimates
CGS expenses below the level provided in the 2018–19 Budget—that is, funding
growth is predicted to be lower than that expected in the wake of the MYEFO
2017–18 announcement which effectively ended the demand driven system by
constraining CGS funding increases to the level of population growth in the 18‑year‑old
to 64‑year‑old age bracket. This is likely influenced by declines
in aggregate higher education demand, which does not appear to have grown
beyond 2017 levels based on Department
of Education and Training analysis (p. 7), although these figures can
obscure unmet demand in particular courses or regions.
There are few higher education measures in the 2019–20
Budget. The Government has maintained its focus on regional universities,
building on its response in the 2018–19
Budget to the Review
into Regional, Rural and Remote Education with a $93.7 million commitment
over four years from 2019–20 (and $23.7 million per year ongoing) for Destination
Australia scholarships, as part of the Population Package (Budget Paper
No. 2 does not include a separate line item for the Destination Australia
scholarships).
These scholarships would provide $15,000 per year for up to
4,720 domestic and international students studying at a regional campus of a
university or vocational education and training provider, as announced in Planning
for Australia’s Future Population (p. 35). This measure is funded by
terminating the Endeavour
Leadership Program.
Vocational education and training
Vocational and other education expenses will be an estimated
$1.7 billion in 2019–20, and are estimated to decrease by 11.1 per cent in real
terms from 2019–20 to 2022–23. This decrease is driven primarily by the
decision in the 2018–19
Budget to run the SAF over five years rather than four while retaining the
same total expenditure allocation, and $649.0 million lower expenditure from
2018–19 to 2021–22, due to non-participation in the SAF by Queensland and
Victoria (based on comparison of SAF expenses in Budget Paper No. 3 in
the 2018–19 Budget and 2019–20 Budget).
The vocational and industry training expenses growth of 6.8
per cent in real terms from 2019–20 to 2022–23, cited above, is primarily due
to the $525.3 million budget measure Skills Package—Delivering Skills for
Today and Tomorrow, which is being funded largely from the shortfall in SAF
spending.
The quantum of funding for these vocational education and
training (VET) sub-functions is notably lower when compared with higher education,
reflecting in part the Commonwealth’s shared
responsibility with the states and territories for VET.
Key sector stakeholders, such as TAFE
Directors Australia, have ‘called for a reframing of the policy debate’
towards more policy and funding coherence across tertiary education. The
centrepiece of the 2019–20 Budget for VET, the response to the Independent Review of
Australia's Vocational Education and Training System (Joyce Review), commissioned
in November 2018, does not appear to address this issue.
The Skills
Package—Delivering Skills for Today and Tomorrow comprises a
large number of VET-specific initiatives, including the establishment of a National
Skills Commission and Skills Commissioner, National Careers Institute and
Careers Ambassador, ten national training hubs to support school-based VET in
regions with high youth unemployment, additional payments for employers and
apprentices in certain occupations, and support for a foundation language,
literacy, numeracy and digital literacy skills program.
Although there is only limited information available about
the newly announced programs, it appears Delivering Skills for Today and
Tomorrow will partially restore funding for skills training for some
disadvantaged groups, which ceased as part of the creation of the Industry
Skills Fund at the 2014–15
Budget (p. 74).
As these announcements relate to the Australian Government’s
own programs, their introduction is not subject to negotiation with the states
and territories, however the Government has committed to consultations with the
VET sector, and the states and territories about arrangements for the National
Skills Commission and Skills Commissioner.
Table 5: significant policy announcements, $ million
| Budget measure |
2018–19 |
2019–20 |
2020–21 |
2021–22 |
2022–23 |
| National Partnership on Universal
Access to Early Childhood Education—further extension |
- |
136.2 |
318.3 |
- |
- |
| Local School Community Fund |
- |
30.2 |
- |
- |
- |
| School Funding—initiatives to
support students and teachers |
- |
6.8 |
5.3 |
4.3 |
3.3 |
| Skills Package—delivering skills
for today and tomorrow(a) |
-138.8 |
-23.2 |
-11.2 |
30.7 |
181.3 |
Australian Government, Budget Measures: Budget Paper No. 2:
2019–20, pp. 67–70.
(a) The expense figures for the ‘Skills Package—delivering
skills for today and tomorrow do not reflect the $525.3 million estimated to be
provided over five years for this measure, discussed above. The budget papers
appear to offset the Education and Training portfolio spending on this measure
against the reduced spending on the SAF from the Treasury portfolio.
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