Scotch College

Government funding and the School's 2006 budget

Michael Robinson, AO

The Commonwealth and Victorian Governments each contribute to the annual cost of educating students at Independent Schools. This contribution is generally described as per capita grants (or perhaps more accurately as ‘fee subsidy’) and Scotch receives no other financial benefit from either Government.

The per capita grants are applicable only to Australian resident students and do not apply to non Australian resident students, of which we expect there to be 38 at Scotch in 2006.

Commonwealth Government The contribution is a percentage of the annual recurrent cost of educating a student at a Government School; i.e. the total cost of teachers’ salaries and other recurrent expenses, but specifically excluding the cost of depreciation of physical facilities or other capital works. It is called the Annual Government School Recurrent Cost or ‘AGSRC ’.

The contribution payable to an independent school varies from 13.7% to 70% of AGSRC , with the applicable percentage for each school being determined by the perceived socio-economic circumstances of that school’s fee paying parents.

These ‘socio-economic circumstances’ are assessed by the locality in which parents reside.

In the case of Scotch College, the relevant percentage is 21.2% which in 2006 translates into a contribution of $1,913 for each secondary student and $1,465 for each primary student.

Victorian Government The contribution varies from $324–$903 for each primary school student and from $476–$1,284 for each secondary student. The actual amount payable to a school is determined by the level of fees charged. The higher the school fees charged to parents, the less the subsidy paid by the Victorian Government. In the case of Scotch parents, the amount paid is the minimum, i.e. $324 for primary students and $476 for secondary students.

The Government contribution for students at Scotch in 2006, therefore, is:

	Primary Students ($)	Secondary Students ($)
Commonwealth	1,465	1,913
Victorian	324	476
TOTAL	1,789	2,389

In accordance with the standard practice adopted by Scotch over many years, these amounts are credited to parents’ fee accounts and the amount actually payable by parents reduced accordingly. Any variation in the fee subsidy from Governments will flow directly to parents’ fee accounts. In substance, the contributions from Governments are not for the benefit of the School but are a subsidy to fee-paying parents.

As contributions are not received in respect of non-Australian resident students, their fee accounts do not include the reduction given in respect of all other students.

2006 Budget At its meeting in August 2005, the School Council adopted the 2006 Budget, which determines the fees payable by parents in respect of the forthcoming year. Tuition fees for 2006 are payable by three instalments in September 2005 and February and May 2006. Boarding fees also are payable by three instalments but in February, May and September 2006.

The School’s income for 2006 is expected to be $39.1m, made up as follows:

	$ m
Tuition fees	35.51
Boarding fees	2.65
Other income (incl. endowed scholarships)	0.94
TOTAL	39.1

Of the tuition fees $4.06m (or 11.4%) will be contributed by Governments with the remaining $31.45m (or 88.6%) being payable by parents.

The budget expenses for 2006 are:

	$ m	%
Teaching salaries	17.21	44.0
Other salaries	6.73	17.2
Property maintenance, grounds, cleaning and depreciation	6.29	16.1
Other academic expenses	3.36	8.6
Boarding expenses	2.25	5.8
General expenses	2.29	5.8
Contingency & surplus	0.98	2.5
TOTAL	39.11	100

As can be seen from the table above, the major part of expenditure at Scotch is for salaries (over 60%). In 2006 expenditure on salaries and on costs is expected to increase by 7.725% compared with a fee increase of 6.5%.

The quality of the teaching staff is fundamental to what we do at Scotch. The policy of the School is to provide financial reward and opportunity for professional development to ensure that we recruit and retain staff of the highest calibre, and provide an environment in which their professionalism can flourish.

Over the last 10 years enrolments at Scotch have been stable, but there has been a significant increase in teaching staff and in ancillary and computing staff. The student staff ratio has declined from 13.4 in 1995 to 11.3 in 2005 which alone has added over 2% pa to school fees during the last 10 years. During that time there has been no increase in administration staff or in maintenance and ground staff.

Michael Robinson AO
Chairman