School Fees and the CPI
A question frequently asked by parents is why there is a difference between the increase in CPI and the annual increase in fees determined by the school.
To use the CPI as a benchmark for the setting of school fees is misleading because the CPI is developed using measures that are related to eleven community costs of which education is one with others including; food, clothing and footwear, housing, health and transport rather than those applicable to the costs incurred by schools.
A better comparison would be the increase in the Average Government School Recurrent Cost (AGSRC), which is calculated by the Australian Government and includes all school recurrent costs that can be measured in dollar terms. The AGSRC is used to index the per capita grants that the Australian Government provides to students at independent schools.
The table below compares the increases in the AGSRC with the corresponding increase in CPI.
| YEAR | AGSRC PRIMARY | AGSRC SECONDARY | CPI |
| 03/04 | 8.7% | 7.2% | 2.4% |
| 04/05 | 3.1% | 4.6% | 2.4% |
There are some items that always have a large impact on fees. Education is a people driven enterprise and hence teachers' salaries, whilst not excessive given the scope of their role, make up a large part of the school budget. The provision of pastoral care for students is another such item as is the cost of providing a breadth of programmes at post-compulsory level and then there is the ever-increasing cost of the provision of ICT. Other costs are hidden and are often due to changes in legislation. Recent examples include changes in Workers' Compensation legislation, and hence premiums; changes to FBT and the ongoing costs associated with compliance with Disability Discrimination Act building standards.
There are also line items that vary significantly and over which the school has no control. They must be paid and it is impossible to find saving offsets. A significant example is the escalation in insurance premiums. For some time the cost of insurance has been increasing at a rate in excess of the CPI. The 'housing boom' continues to affect the cost of employing tradesmen for maintenance and/or construction of new facilities. While construction costs vary from year top year maintenance costs are ongoing and increase as the school plant ages.
So setting fees remains a balancing act between the costs of providing the education for which the school is valued and not increasing fees to a level which will impose an undue burden on families. This is an art not a science and one in which the financial experts in the school and on the governing body and the Principal and the educators must, and do, work creatively and with consideration for their school community.
