Fee Increases Outstrip Cost Increases in Elite Private Schools in Victoria

School fees in Victoria’s elite private schools are set to increase by nearly 6% in 2012. At Geelong Grammar they will top $30,000 for the first time. Several others will pass $25,000 for the first time. At the same time, they are raking in millions and millions of dollars in government funding. The Gonski Review of School Funding must put a stop to this upper class welfare.

In 2012, Year 12 fees at 20 elite Victorian schools will increase by an average of 5.8% over 2011 fees [see table]. Geelong Grammar’s Year 12 fees will be $30,820, up $1,600 over 2011. Fees will exceed $25,000 in five other schools – Lauriston, Melbourne Grammar, Melbourne Girls Grammar, Scotch College and St. Catherine’s.

The schools with the largest fee increases are MLC – up by 9.5% to $23,490; Strathcona – up by 7.9% to $21,564; Trinity Grammar – up by 7.8% to $23,516; and Carey Grammar – up by 6.5% to $23,408.

Schools claim that the fee increases are necessary to cover increasing costs. However, the increases far exceed cost increases in private education and training. The quarterly labour price index increased by only 3.9% in 2010-11 compared to the average fee increase of 5.8%. Only one school – St. Leonard’s College – kept its fee increase below the increase in the labour price index.

Some claim that the fee increases are in line with the increase in the education component of the consumer price index. However, this misrepresents cost increases facing schools.

The education consumer price index measures the increase in prices paid by families not the increases in labour and other costs faced by schools. It is actually a measure of the fee increases paid by families. So, schools are using their own past fee increases to justify further increases.

Others justify the increases by citing increases in average government school recurrent costs (AGSRC). However, this too is a deception. AGSRC is a misleading measure of costs facing private schools because it combines both pure cost increases and actual increases in resources in government schools. For example, it covers both the increase in costs of existing resources such as higher salaries for teachers as well as expenditure on additional teachers and new programs.

The labour price index in education and training is a more appropriate measure of costs faced by private schools. Labour costs account for 70-80% of school costs.

Fee increases have far exceeded cost increases in elite private schools since the SES funding arrangements were introduced by the Howard Government in 2001, even thought the scheme was supposed to enable schools to reduce their fees and make them more accessible.

Fee increases in all schools since 2001 have outstripped cost increases over the period. Since 2001, average Year 12 fees in 16 elite Victorian private schools have almost doubled, increasing by 96% to 2012. The annual labour price index for private education and training increased by 50% between 2001 and 2011 compared to fee increases of 86% over the same period.

Former Prime Minister, John Howard, said that fees at many private schools would fall as a result of the increase in funding for private schools provided by the scheme [ The Australian, 30 September 2000]. The former Education Minister, David Kemp, argued that the SES funding scheme would put downward pressure on school fees and make them more affordable for families [for example: Sydney Morning Herald, 12 May 1999; The Age, 29 September 2000; The Age, 10 October 2000; The Age, 4 October 2001]. He even said that the scheme would have a “democratising impact” on private schools The Age, 24 November 2000].

Principals of schools such as Scotch College, St. Michael’s Grammar and Wesley College said at the time that the SES scheme would allow them to reduce fees [ Herald-Sun, 24 August 2000; Herald-Sun, 31 August 2000; The Age, 29 September 2000]. Many others said it would serve to curb future fee increases.

None of this has come to pass. These claims have proved to be false time and again since 2001 as private school fees have gone ever upwards.

Some schools have increased their fees by over 100% since 2001 – Geelong Grammar (106%), Melbourne Grammar (103%), Melbourne Girls Grammar (107%), MLC (114%) and Trinity Grammar (113%). Not one school constrained its fee increases to cost increases.

Far from being “democratised”, elite private schools have become more exclusive with fees nearly doubling since 2001. Only the very wealthy can afford school fees of $20,000-$30,000 a year and more. These schools remain as exclusive as ever – 80% or more of their enrolments are from the highest socio-economic status (SES) quartile and only 1% is from the lowest SES quartile.

The high fee increases, and increases in government funding, are being used by schools to add to their financial reserves. For example, Geelong Grammar made a profit of $10.7 million last year [ Herald-Sun, 27 August 2011]. Melbourne Grammar was the second-most profitable school, reporting a surplus of $7.75 million. Presbyterian Ladies’ College recorded a profit of $7.6 million, Haileybury College $6.8 million and Scotch College $4.9 million.

These reserves are being used to gold-plate their facilities, pay higher salaries to teachers, purchase modern education technology and to make property and other investments. Many boards of elite private schools want larger surpluses to expand their already lavish facilities [ The Age, 9 June 2007].

In recent years, many have added indoor sports centres, swimming pools, libraries, etc. For example, Geelong Grammar has just completed a new $16 million Wellbeing Centre comprising a multi-purpose sports hall, an indoor swimming and diving pool, a fitness centre, a dance studio, a medical centre and classroom facilities. It is now planning for a new indoor cricket centre and an indoor equestrian centre.

All this is being supported by millions and millions in government funding. The twenty schools will get nearly $100 million in Federal Government funding in 2012. Haileybury alone will get over $14 million and Caulfield Grammar will get nearly $11 million. Geelong Grammar with the highest Year 12 fees in Australia will get $5 million.

This funding is completely wasted. Elite private schools in Victoria do no better than high SES government schools in terms of student achievement. High SES government schools achieve similar average results on the national literacy and numeracy tests with less than half the total resources per student of elite private schools [ Dissent, Spring 2011].

Despite generous government funding wasted on the wealthiest schools and families in Victoria, the organisation representing these and other Independent schools – Independent Schools Victoria – wants even more. It has proposed a universal voucher funding model to the Gonski Review of School Funding which would deliver about $300 million in government funding to these 20 schools according to a separate analysis of the funding implications of the model by Save Our Schools. The model would also strip hundreds of millions of dollars from government schools in Victoria.

At the same time, Independent Schools Victoria has proposed to the Gonski review that no additional funding be provided to students from low SES families. It claims that the relationship between low SES and education outcomes is “weak” and “inconclusive” and that “low SES has a minor influence on student performance”. This is refuted by literally hundreds of studies in Australia and overseas.

This proposal is a case of outright shameless greed. At the same time, the elite private schools continue with fee increases to ensure their exclusivity and gold-plate their already lavish facilities.

The Gonski Review must totally reject this proposal. It must also completely overhaul the current system of funding private schools which delivers hundreds of millions in government funding to the wealthiest schools in the country while disadvantaged government and private schools are denied the funding they need to deal with the challenges they face.

It is time to turn off what a columnist of the Herald-Sun has called “the gravy train of government funding for Australia’s richest private schools” [28 February 2011]. It is nothing but “a brazen case of resources greed” [ Daily Telegraph, 5 March 2011]. As the Herald-Sun columnist urged, “It’s time to fund need rather than greed”.

Mr. Gonski has stated repeatedly that the focus of the Review is on improving equity in education. Let’s hope it delivers.

Trevor Cobbold

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