Crunching Numbers and Calming Nerves: School Budget Insights for the New Financial Year

With the End of Financial Year (EOFY) fast approaching, our attention inevitably turns to expense reviewing, budgets, and other financial aspects important for keeping your school and community running smoothly. In light of this, we felt it best to reflect on the ever-changing landscape of school fees for 2024. 

Edstart, one of our certified integration partners, performs annual research into non-government school fees and Australian household income. We’ve combined this with some other educational resources and our understanding of the industry to build some key considerations for the years ahead. As schools across the nation navigate the delicate balance between financial sustainability and educational quality, the annual adjustments in school fees reveal much to dive in to from both the school, and the parent’s, perspective. 

What do school fees look like across the country this year? 

First, we can look at increases from 2023 to 2024 when it comes to school fees, against the national average (5.85%). 

We can see here South Australia continuing the trend of being the state that increases the least amount, going from 1.94% to 2.96%. While ACT holds the largest increase up to 10.08%, the actual largest jump is from Tasmania, which increased their school fees by 4.14% from last year. You can see these changes by state below; 

Further analysis of these results, including a breakdown of fees per regions within states, school types and fee tiers, is available in the full Edstart School Fees Report of 2024.

So, what is impacting School Budgets? 

Of course, this is never just a simple equation. Last year, as we touched on in our blog “Balancing School Budgets and School Fee Stress,” the sharp rise in inflation was not matched with a drastic increase in school fees, instead opting for something gradual. The knock-on effect of an inflation high of 7.3% in 2023 has caused schools to continue this gradual increase from 2023-2024, despite a drop in the Consumer Price Index (CPI). As Edstart puts it in their latest School Fees Report, 

“[Inflation is] continuing to cascade through to the cost of operations for schools, increasing the price of expenses such as construction and maintenance, utilities, insurance, and school supplies, in turn, forcing schools to adjust their fees to cover these costs.” [Edstart School Fees Report of 2024, Pg 4].

An increase in staffing costs 

As we touched on in our previous blog, “Beyond the Grades: Rethinking Academic Reports”, there is a significant increase in expectation from our teachers which is causing disenfranchisement among those involved, highlighting the potential teacher shortage issue and a decline in existing teachers leaving the profession. Of course, this creates a sort of “arms race” for talent, with well-funded and “elite” schools, leading to increases in pay and causing state governments to increase the pay within public schools, thus attempting to retain teachers and help them combat the current pressures on the cost of living. State governments in New South Wales, Queensland, and Tasmania have all increased the salaries of state school teachers, with the other states negotiating a catch-up. Where that leaves non-government schools, Edstart sums this up; 

“For non-government schools, this means they are having to match these salary increases in order to attract and retain quality staff, especially given the current teacher shortage and cost-of-living crisis. With salaries comprising around 70% of a school’s expenditure, this can place significant pressure on their budget.” [Edstart School Fees Report of 2024, Pg 4].

Government Initiatives 

While only a localised issue, the Victorian Government’s announcement in May 2023 of adjustments to the payroll tax will lead to an obvious increase in operating costs for schools in the State. With it coming into full effect towards the end of the year, we still don’t know how much of an effect this will have on school budgets for now, but we are seeing “State Payroll Tax Surcharge” starting to appear on parent’s fee schedules, according to Edstart, as the future starts to take shape. 

As always, The Capacity to Contribute (CTC) score, which determines the amount of recurring funding each school receives from the Australian Government by measuring a school community’s capacity to contribute to the ongoing costs of running a school, continues to influence school fees. As presented by Edstart, the continual trend shows that a CTC score of 100 or less results in lower school fee increases. This can likely be drawn because of increased government funding, with the schools tending to service families on lower median incomes. However, once the CTC score rises above 120, we start to see larger increases in school fees that are perhaps more reliant on their community than the government, with scores between 121-130 increasing by 7.30%. 

How does this affect the parents? 

The obvious effects are stress and financial pressures, which are not unique to the world we live in today. According to the annual national McCrindle Cost of Education survey run by Futurity Invest, 66% of respondents said that Australia’s cost of education was having a significant impact on their household finances, with a similar 66% not feeling like they are financially equipped to contribute to lifelong education for their children.  

With these increased school fees, parents also need to be acutely aware of the increased cost of school life associated with it. The same research showed that 88% of the total education cost within government schools was ancillary or “hidden” costs, with that number going down to 56% in Catholic and 48% in independent schools.  

Is cost the most important factor when choosing schools now? 

While it would be naïve to ignore the strains on parents regarding schooling and the financial pressures they are dealing with, it’s still not the most important factor when parents consider moving schools. We are still a nation that highly values education; the Cost of Education survey showed that 85% of respondents believed that schooling is essential for their students to thrive in life. Along with this, a survey completed by Edstart at the end of 2023 showed that 69% of their respondents value the “Happiness and wellbeing of my child” as the most principal factor should they be faced with moving schools.  

Furthermore, when it comes to desired support that parents were seeking, any financial request (or more specifically “More flexibility of school fee payments”), was the fifth most important factor that parents were seeking support according to Edstart at 16%. The top three being “More attention to individual students” (24%), “Student wellbeing programs” (23%) and “Career pathways support for students” (20%).  

Despite everything going on at home and the rising cost of living, the fluctuating CPI and interest rates uncertainty, parents value, more than anything else, feeling that their child is happy, supported, and on a pathway to success. 

In conclusion, as we reflect on the evolving landscape of school fees for 2024, it becomes evident that the financial dynamics impacting both schools and parents are multifaceted and interconnected. The 2024 Edstart School Fees Report highlights significant trends, such as varying fee increases among states and the broader economic factors driving these adjustments. From inflationary pressures affecting operational costs to increases in staffing expenses amidst a competitive environment for qualified educators, schools face complex challenges in managing their budgets effectively. 

Despite these financial pressures, it's clear that parents' key decisions on schooling remain deeply rooted in their children's well-being and prospects. While financial considerations are significant, they are not the sole determining factor in choosing a school. Parents prioritise their children's happiness, well-being, and educational opportunities above all else, seeking schools that offer robust support systems and a nurturing environment conducive to their child's growth. 

By understanding and addressing these complexities and perspectives by both parties, we can work towards fostering an educational landscape where every child has the opportunity to thrive and succeed.