By law, all Australian schools are not-for-profit entities. Non-government schools do not make ‘profits’ – instead they set their fees to ensure that they are able to cover the costs of delivering an on-going, quality education to their students.
Different schools set different fees according to the range of services that they provide to students. When determining the levels of fees that an individual school will charge to parents, schools take into account:
- the operational costs required to provide the range of educational and extra-curricular services
- the capital costs associated with maintaining and upgrading building and facilities
- the amount of funding received from government sources.
Within these constraints, schools also consider the capacity of parents to meet fee increases, with a trade-off sometimes being required between increases in fees and the provision of services, particularly extra-curricular activities.
In 2009, Victorian independent schools received, on average, 36 per cent of their income from the Victorian and Australian Governments – the rest was paid for by parents.
As the cost of delivering education increases, non-government school fees need to rise to maintain that quality. In recent years, both the Australian Government School Recurrent Cost (AGSRC), which measures the cost to government of educating one student in a government school for one year and the education Consumer Price Index, which, by showing the cost to consumers of accessing education services, reflects the increased costs of providing education, have consistently increased more quickly than the national CPI. These economic indicators highlight a significant increase in recent years in the cost to schools of providing a quality education for students.