The ongoing operating costs of schools are met through parent contribution and government funding.
Independent schools are funded by a combination of parental contribution (usually in the form of fees) and Australian Government and state and territory government funding. Of the two broad categories of government funding to schools, recurrent and capital, it is recurrent funding that supports the ongoing operating expenses of schools and is by far the most significant.
The Commonwealth Government has the primary role in providing government funding for non-government schools. This recurrent funding supports the ongoing operating expenses of all schools. State and territory governments are the primary source of support for government schools.
In 2019-20, Commonwealth and state and territory governments spent a total of $70.6 billion on school education. As the table below shows, $52.6 billion of this public investment went to government schools and $18.0 billion went to non-government schools.
Recurrent funding for school education, 2019-20 ($ billion)
Source: Productivity Commission Report on Government Services, Australian Government Department of Education, Skills and Employment Financial Questionnaire.
In 2019-20, some 66 per cent of school enrolments were in government schools, which received 75 per cent of total government expenditure on schooling. In comparison, non-government schools accounted for 34 per cent of enrolments and 25 per cent of total government expenditure.
On a per student basis, in 2019-20 total government spending on students in government schools averaged $20,182, while in non-government schools (both Catholic systemic and Independent schools) this was $13,189 per student. Average government expenditure on students in Independent schools is estimated to be about $11,620 per student, or 58 per cent of the average spending per student in government schools. Independent school students receive considerably less government funding than their counterparts in government schools.
Average per student government funding by sector, 2019-20
Source: Report on Government Services
State and territory government funding made up around 22 per cent of total government recurrent funding for Independent schools in 2019-20. While the amount of funding provided by each state and territory government to the non-government school sector varies, the contribution can be significant to individual schools.
The proportion of government funding for individual Independent schools varies greatly from school to school. Some Independent schools receive as little as 10 per cent of their funds from governments, while others, where the parents and school community have extremely limited capacity to contribute, are almost fully funded by government.
Source: Non-Government Schools Financial Questionnaire
Most of the income from private sources comes to Independent schools through fees charged to parents. In 2020 this accounted for 94 per cent of their private source income. Income from donations, fundraising, sponsorship and investments made up the remaining 6 per cent of their income.
Independent school fees vary widely and are influenced by the community the school serves, the level of schooling, the types of education programs offered, and the level of government funding provided to the school.
Independent schools by annual parent fees, 2020
The amount of government funding per Independent school student, from both state and territory governments and the Australian Government, is considerably lower than the level of funding for Catholic systemic and government school students however families make up the difference in total per student funding in the Independent sector through school fees, donations and fundraising.