09 Sep 2019
People have their own views on the merit of a private education but one thing is certain: it costs a lot of money and the average Australian household doesn’t have the disposable income it once did.
That’s a revenue challenge for non-government schools. Meanwhile those schools are facing more competition than ever before with an increased number of schools available and quality improvements across the government schooling sector.
"On average, schools with tuition fees between $A10,000 and $A20,000 have seen a reduction in student numbers, sluggish tuition fee growth and an increased reliance on debt.”
Clearly there are important structural challenges for the non-government schooling sector. On average schools with tuition fees between $A10,000 and $A20,000 have seen a reduction in student numbers, sluggish tuition fee growth and an increased reliance on debt.
The improvement in government schools has led to the percentage of students enrolled in increasing for the first time in 50 years – primarily at the expense of Catholic schools.
Macroeconomic conditions in the Australian economy have also deteriorated considerably over the last few years so it is unsurprising parents are reassessing private education costs and where they send their children.
Real gross disposable income has come under considerable pressure over the last three years, largely due to sluggish wage growth and rapidly increasing costs of living. The debt-to-income ratio for households in the 60 to 80 per cent income quintile is considerably higher and the cost of secondary education is three times more expensive than what it was at the start of the millennium.
Blue chip schools with tuition fees greater than $A20,000 are also facing an “arms race” in the form of capital expenditure. These high-tuition schools are spending over $A4,000 on capital expenditure per student - more than double the rest of the sector.
Although capital expenditure across the sector varies considerably, many schools are focusing strategic investment in sporting, arts, science, technology, engineering and mathematics enhancements.
“ANZ has a long standing history of supporting the education sector with some relationships spanning over 150 years.
Education is a cornerstone to both communities and the economy and we take pride in our ability to partner with schools and support their growth”
Shayne Elliott – CEO, ANZ
Tim Suffield is a Director, Client Insights and Solutions for ANZ Institutional
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The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
09 Sep 2019
10 Jul 2017