Hard economic times providing a tough lesson for Australia’s private schools

Government school enrolments are outpacing those at non-government schools for the first time in 50 years.

Government school enrolments are outpacing those at non-government schools for the first time in 50 years. Photo: Shutterstock

The weak economy, high household debt and sluggish wage growth are fuelling an exodus from private schools to public ones, a study has found.

The Non-Government Schools Industry Report by ANZ found that tuition fees for secondary schools had more than trebled since 2000, which combined with tougher economic times, was pushing more families to choose government schools over non-government schools.

Report co-author Tim Suffield said it marked the first time in 50 years government schools were taking “market share” off non-government schools.

The proportion of children in government schools grew in 2016, 2017 and 2018, while those choosing Catholic schools have fallen consistently since 2010.

While non-government schools generally have shed students to government schools, enrolments at non-government schools in the top tier – those charging $20,000 or more a year – had been more robust, Mr Suffield said.

By contrast, the middle-tier schools – those charging between $10,000 and $20,000 a year – had seen a “reduction in student numbers”.

And that had not only put pressure on those schools’ ability to increase their revenue, but also fuelled an increasing reliance on debt.

Mr Suffield told The New Daily that with the cost of secondary education having increased 300 per cent since 2000 – compared with 160 per cent for the consumer price index – it had stretched disposal income for “upper middle class” families.

(Note that the consumer price index includes rents but not housing costs.)

Higher living costs, record household debt and anaemic wage growth had combined to make it increasingly harder for those families to keep their children in the non-government school, he said.

“We can’t say it definitively, but when you look at the dynamics at play, we know that families in that bracket are experiencing forms of financial stress and falling disposable income … that would lead you to conclude that there’s a link between that and their ability to pay for an education in the private sector,” Mr Suffield said.

The increasing competition for students had forced many of the top-end schools (those charging $20,000 or more) to boost capital spending to attract students – something Mr Suffield called an “arms race” among the high-end schools.

Those schools, he said, were outlaying more than $4000 in capital investment per student each year, which was double the rest of the sector.

David Gillespie, author of Free Schools, How to Get Your Kids a Great Education without Spending a Fortune, told The New Daily that the ANZ report tallied with his own analysis.

That analysis showed a decline in “mid-market” private schools, but a growth in the “cheap end of town”.

That is Islamic, Brethren and Christian Schools Australia schools, while schools under the traditional denominations such as Uniting, Catholic and Presbyterian were in decline.

Source: Independent Schools Council of Australia/ABS

“This matches the decline in Catholics noted by the [ANZ] report,” Mr Gillespie said.

“In short, the new mid-market entrants are suffering as the economy contracts. If it keeps contracting, the low end will be next.”

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