n8426 government schools in australia industry report

37
2 About this Industry 2 Industry Definition 2 Main Activities 2 Similar Industries 2 Additional Resources 3 Industry at a Glance 4 Industry Performance 4 Executive Summary 4 Key External Drivers 5 Current Performance 9 Industry Outlook 13 Industry Life Cycle 15 Products & Markets 15 Supply Chain 15 Products & Services 16 Demand Determinants 17 Major Markets 18 International Trade 20 Business Locations 23 Competitive Landscape 23 Market Share Concentration 23 Key Success Factors 24 Cost Structure Benchmarks 25 Basis of Competition 26 Barriers to Entry 26 Industry Globalisation 27 Major Companies 30 Operating Conditions 30 Capital Intensity 31 Technology & Systems 32 Revenue Volatility 32 Regulation & Policy 34 Industry Assistance 35 Key Statistics 35 Industry Data 35 Annual Change 35 Key Ratios 36 Jargon & Glossary IBISWorld Industry Report N8426 Government Schools in Australia March 2012 Ee Jen Lee Funding flow: Public schools benefit as government sharpens its focus on education www.ibisworld.com.au | (03) 9655 3881 | [email protected]

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N8426 Government Schools in Australia Industry Report, IBIS Report

TRANSCRIPT

Page 1: N8426 Government Schools in Australia Industry Report

2 About this Industry2 Industry Definition

2 Main Activities

2 Similar Industries

2 Additional Resources

3 Industry at a Glance

4 Industry Performance4 Executive Summary

4 Key External Drivers

5 Current Performance

9 Industry Outlook

13 Industry Life Cycle

15 Products & Markets15 Supply Chain

15 Products & Services

16 Demand Determinants

17 Major Markets

18 International Trade

20 Business Locations

23 Competitive Landscape23 Market Share Concentration

23 Key Success Factors

24 Cost Structure Benchmarks

25 Basis of Competition

26 Barriers to Entry

26 Industry Globalisation

27 Major Companies

30 Operating Conditions30 Capital Intensity

31 Technology & Systems

32 Revenue Volatility

32 Regulation & Policy

34 Industry Assistance

35 Key Statistics35 Industry Data

35 Annual Change

35 Key Ratios

36 Jargon & Glossary

IBISWorld Industry Report N8426Government Schools in AustraliaMarch 2012 Ee Jen Lee

Funding flow: Public schools benefit as government sharpens its focus on education

www.ibisworld.com.au | (03) 9655 3881 | [email protected]

Page 2: N8426 Government Schools in Australia Industry Report

www.IbISwOrLd.COM.Au Government Schools in Australia March 2012 2

The industry consists of government-administered schools that provide primary, secondary, or combined education. Some schools within the

industry charge voluntary fees to families; however, schools cannot deny access to students if a family decides not to pay the fees.

The primary activities of this industry are

Agricultural high school operation (government operated)

Area school operation (government operated)

Primary school operation (government operated)

Primary school operation (government operated)

Industry definition

Main Activities

Similar Industries

Additional resources

IBISWorld writes over 500 Australian industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com.au

The major products and services in this industry are

Combined school education

Primary school education

Secondary school education

Special school education

About this Industry

N8440 Language and Other Education in AustraliaThis industry provides tutoring services to school aged children.

N8425 Private Schools in AustraliaThis industry provides school education through privately administered institutions.

For additional information on this industry

www.abs.gov.au Australian Bureau of Statistics

www.deewr.gov.au Department of Education, Employment and Workplace Relations

www.myschool.edu.au My School

www.pc.gov.au/gsp/reports/rogs Productivity Commission Report on Government Services

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www.IbISwOrLd.COM.Au Government Schools in Australia March 2012 3

Market ShareThere are no major players in this industry

Key External driversState funding for primary and secondary educationNumber of government school studentsFederal funding for primary and secondary educationreal household discretionary income

Key Statistics Snapshot

Industry at a GlanceGovernment Schools in 2011-12

revenue

$37.9bnProfit

$.0 ‘000wages

$24.1bnbusinesses

6,709

Annual Growth 12-17

2.8%Annual Growth 07-12

3.2%

Industry Structure Life Cycle Stage Mature

Revenue Volatility Low

Capital Intensity Low

Industry Assistance High

Concentration Level Low

Regulation Level Heavy

Technology Change Medium

Barriers to Entry High

Industry Globalisation Low

Competition Level Low

FOR ADDITIOnAL STATISTICS AnD TIME SERIES SEE THE APPEnDIx On PAGE 35

Mill

ion

50000

10000

20000

30000

40000

1501 03 05 07 09 11 13Year

State funding for primary and secondary education

SOURCE: WWW.IBISWORLD.COM.AU

% c

hang

e

8

−2

0

2

4

6

1804 06 08 10 12 14 16Year

Revenue Employment

Revenue vs. employment growth

Government schools

32.3%NSW

3.0%TAS

23%VIC

2.2%NT 1.2%

ACT

18.3%QLD

11.4%WA

8.6%SA

SOURCE: WWW.IBISWORLD.COM.AU

p. 27

p. 4

SOURCE: WWW.IBISWORLD.COM.AU

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www.IbISwOrLd.COM.Au Government Schools in Australia March 2012 4

Key External drivers State funding for primary and secondary educationThe majority of the industry’s funding comes from state and territory governments, therefore fluctuations in state funding have a large impact on this industry’s revenue. Furthermore, higher levels of funding to government schools will help to improve their quality, thereby increasing enrolment demand.

Federal funding for primary and secondary educationThe Commonwealth Government contributes funding to government schools, and this is vital to industry revenue.

Real household discretionary incomeThere has been a growing trend for

families to send their children to private schools rather than government schools. However, private education can be unaffordable for families with low to average income levels. A rise in household discretionary income will increase the affordability of private education and reduce enrolments in government schools.

Number of government school studentsDemand for government school places is driven by the number of school students. Government funding is directly related to the number of students that are enrolled at government schools; therefore, an increase in the number of government school students will lead to an increase in industry revenue.

Executive Summary

Government schools continue to lose students to private schools (including Catholic and independent schools, covered in report N8425) despite slowing economic growth in 2009. About two-thirds of full-time school students (2.29 million people) were enrolled in government schools in 2010, but this share is slowly falling. Enrolment is measured by the school academic year, beginning January and ending in December. In the five years through 2012, private school enrolment is forecast to grow 1.8% annually, outstripping government enrolment growth of just 0.3% per annum over the same period. Over 10 years, the trend is the same. Hampered by low growth in the school-aged population, enrolments in government schools fell between 2003 and 2005, and in 2008.

Government schools are almost entirely supported by government funding from federal, state and territory governments. Each state manages its own system of education, leading to various differences between them. For example, government schools in Queensland and Western Australia have experienced the strongest funding growth compared with

other states. An overall trend has been consolidation – school numbers have been falling since 2005 and will number 6,709 schools in 2011-12. Industry revenue is forecast to grow 2.5% in 2011-12, totalling $37.9 billion, which makes the Government Schools industry the largest in the Australian education sector. In the five years through 2011-12, IBISWorld estimates industry revenue will grow 3.2%

Although the states distribute funding to schools, the Federal Government controls the purse strings, and has used its influence to push various state education departments towards a more unified national structure. This has meant reforms to the school starting and leaving ages, new report cards, a national curriculum and a series of literacy and numeracy benchmarks to be established by the schools.

Challenges ahead include low projected growth of the school-age population, continued competition from private schools and issues of teacher recruitment, retention and career development. The industry is forecast to grow at an annualised 2.8% in the five years through 2011-12 to $43.5 billion.

Industry PerformanceExecutive Summary | Key External drivers | Current Performance Industry Outlook | Life Cycle Stage

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Industry Performance

revenue performance Industry revenue is expected to increase by 3.2% per annum in the five years to 2011-12 to total $37.9 billion. This is due to the sharp rise of 6.6% recorded in 2009-10, while in 2011-12 industry revenue is forecast to grow 2.5%. State governments supply over 90% of industry revenue, and the remainder is supplemented by Commonwealth Government funding and other revenue, such as parents’ contribution.

State government funding is projected to grow 6.3% per annum over the five years through 2011-12 to total $33.3 billion. Queensland and Western Australia experienced the highest growth in schools funding over the five years through 2009-10 (latest available data). Queensland and Western Australia have also had the highest growth in government school enrolments in the past four years. Queensland’s expenditure has grown steadily from 2003-04, whereas funding

in the Northern Territory spiked by at around 19% in 2005-06, followed by an 8.8% boost in 2008-09.

New South Wales and the Australian Capital Territory reduced their operating expenditure in 2005-06 and 2006-07, and WA’s school funding also stalled in these years, before rebounding by 7.2% in

Current Performance

Government schools in Australia are almost completely supported by the federal and state governments. School education is primarily controlled by the various state and territory governments. However, the Federal Government has increased its influence over education policy in recent years.

By placing conditions and requirements on grants to state and territory governments, it has exerted pressure on the states to follow its lead in reform. Reforms aim to increase school performance and accountability, and improve the consistency of government schools across all states.

Key External driverscontinued

'000

2400

2200

2250

2300

2350

1501 03 05 07 09 11 13Year

Number of government school students

SOURCE: WWW.IBISWORLD.COM.AU

Mill

ion

50000

10000

20000

30000

40000

1501 03 05 07 09 11 13Year

State funding for primary and secondary education

% c

hang

e

8

−2

0

2

4

6

1804 06 08 10 12 14 16Year

Industry revenue

SOURCE: WWW.IBISWORLD.COM.AU

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Industry Performance

revenue performancecontinued

2008-09. Overall, revenue growth was highest in 2002-03, due to strong funding by the WA, NSW, and Queensland state governments. Revenue grew slowly over the next four years, to rise by just 1.0% in 2006-07. State funding remained flat in 2007-08 and was up 3.3% in 2008-09.

It appears that government schools tend to be funded on a needs basis, as one year of strong revenue growth is often followed by several years of flat growth. The combined state revenue

does not reveal a broader trend, because in effect each state or territory is running its own education system. In most states, there has been a trend towards placing greater responsibility for the management of funds in the hands of school principals and school councils. This gives greater control over staff budgets and other major expenses at the local level. Localised control over funding has motivated government schools to raise additional revenue from the community.

Federal Government funding

Federal Government funding is forecast to account for about 10% of industry revenue in 2011-12, or $3.79 billion. This proportion has risen from a 7.2% share in 2005-06, and this reflects increased attention from the Federal Government on schools. The former Rudd Government and current Gillard Government have made education a priority, with the Education Revolution the centrepiece of schools funding and policy. This has involved spending on computing equipment, school infrastructure and other services. Federal funding will rise by an estimated 9.82% per annum over the five years to 2011-12, boosted by a surge in Commonwealth funding in 2008-09.

The Federal Government distributes much of its school funding through grants to tackle literacy and numeracy and teacher professional development programs (refer to the Industry Assistance section of this report for more information). Additionally, in 2009-10 and 2010-11, the Commonwealth Government increased its funding for schools through the Building the Education Revolution (BER) economic stimulus program. This was a once-off $16.2 billion injection into the education sector to fund capital projects such as the construction and upgrades of education facilities.

Private income and private schools

Government schools have increased their reliance on private sources of funding over recent years. In Victoria, parents may be asked to pay voluntary contributions to assist the school to pay for particular resources, or for general donations to the school. However, these contributions are wholly voluntary and no student can be refused enrolment into a particular school if they refuse to pay. Other states do not have such established forms of parental contribution schemes, but are increasingly seeking to implement them.

Much funding of schools is based on enrolment levels, which have been stable over the past five years. Government school full-time students numbered 2.25

million in 2006, and this number is forecast to rise to 2.3 million in the 2012 school year. This represents an annual increase of just 0.3%, and reflects an increasing trend towards private schooling. Although government school enrolments have increased marginally over the past five years, private school enrolments have grown at a faster pace. Between 2006 and 2012, private school enrolments are estimated to grow by 1.8%. Over a longer period, between 2001 and 2011, the proportion of students attending government schools declined from 69.2% to 65.3%. This was largely due to a perceived higher quality of the private school system.

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Industry Performance

Private income and private schoolscontinued

Notably, the economic slowdown from late 2008 did not slow the loss of enrolments to private schools. In 2009,

private school enrolments rose 1.5%, in comparison to a lower 0.4% increase in government school enrolments.

Consolidation and employment

Many public schools are undergoing consolidation, some closing and others merging to develop larger, better funded schools. Over the five years through 2011- 2012, government school numbers are forecast to decline by 0.4% per year to 6,709 schools. School numbers have been falling in each year from 2005. The decline is partly a result of government efforts to increase schools’ productivity. There have been calls to close smaller schools, which are unable to provide a strong curriculum, and to create larger schools instead, which can attract greater funding. For example, the SA Government has been pushing for the creation of super schools – institutions which are developed using public-private partnerships and would offer state-of-the-art facilities to students. Poor government school facilities have been identified as one of the major reasons why students are leaving the public system. For example, 70 Victorian schools closed and merged in the three years to 2009 (The Age, June 2009). Mergers allow a number of smaller schools to pool their funds in order to provide better education to their students.

Employment is forecast to grow by 1.3% over the five years through 2011-12 to total

about 283,383 full-time and part-time employees. The breakdown of total staff (full-time and part-time employees) is about two-thirds teaching staff, 2.5% specialist staff and 30% other staff. However, in full-time-equivalent terms, 73% of staff are engaged in teaching, 22.5% in administration and clerical work, 2.5% in specialist support roles and 1.9% in building and maintenance. Over the past five years, the main change in this breakdown has been a decrease in the proportion of teaching positions to administration and clerical staff.

The number of teachers is expected to grow by 0.8% per annum over the five years through 2011-12, while the number of non-teaching staff is forecast to grow by 2.5% per annum. Teacher numbers have increased at a higher rate than student numbers, thereby reducing the staff to pupil ratio. This figure is notably smaller in government schools than in private schools, meaning that there are more teachers for each student in government schools.

Most of the employment growth can be attributed to the rise in administration and clerical staff – between 2006 and 2011 this group will

Enrolments in schools

year*

Public school enrolments

(’000 students) (% change)

Private school enrolments

(’000 students) (% change)

2004 2,250.0 n/C 1,082.2 n/C2005 2,246.1 -0.2 1,102.1 1.82006 2,248.2 0.1 1,120.5 1.72007 2,268.4 0.9 1,148.1 2.52008 2,264.5 -0.2 1,169.7 1.92009 2,273.9 0.4 1,187.4 1.52010 2,282.4 0.4 1,204.5 1.42011 2,295.0 0.6 1,224.6 1.7

*year end decemberSOURCE: ABS

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Industry Performance

Consolidation and employmentcontinued

increase by an estimated 3.8% per annum to total about 49,800 full-time equivalent positions. Administration and clerical staff represent over 22% of full-time-equivalent employees in

government schools, up from about 20% in 2006. One reason behind the increase has been a growing burden on government schools to report on student performance in recent years.

National reforms for consistency

The Federal Government has exerted its influence to push for greater consistency in school education across Australia. The government seeks to raise the accountability and performance of government schools through this process. Reforms have included harmonising the number of school years and creating a

common school starting age, establishing national testing of numeracy and literacy, and developing a national curriculum. Many of these objectives have already been achieved (refer to regulation and policy) and from 2010 all states implemented a common school starting age. The National Assessment Program

recruitment and wages

Western Australia implemented a sponsorship program for recruiting overseas trained teachers in 2006, in response to concerns about an ageing workforce. The WA Department of Education noted that teacher retirements and resignations were relatively stable over the period 2001 to 2006, but that from 2006 onwards retirements began to rise, and this is expected to continue. The department also launched a campaign to attract teachers to Western Australia. However, the program was discontinued in 2010 after it was discovered that there was adequate supply of Australian graduates. Moreover, the trend to greater consistency in schooling between the states (including a national curriculum) will help increase the mobility of teachers. In states where enrolments are falling or there is an oversupply of teachers, teachers can transfer to other states with greater ease.

The cost of wages for the industry is forecast to grow by 3.8% per annum over the five years through 2011-12 to total $24.1 billion. Wages were estimated to account for 62% of industry revenue in 2005-06, and this is expected to rise to 63.6% in 2011-12. In May 2008, the Victorian Teachers Union won a significant wage increase of up to 15.2%

for teachers. WA teachers were also awarded a 21% pay rise, making them the highest paid public school teachers in Australia. This put upward pressure on wages across the country and in the private school industry as well, as teachers in other states sought comparable pay rises. In December 2011, the WA government announced a 12% pay rise for teachers over the next three years. Victorian teachers were also campaigning for a larger pay rise in 2011, as other public servants such as nurses won a bigger pay rise.

Governments are providing funding for initiatives to provide a greater focus on boys and to improve their educational outcomes. The proportion of male teachers in schools is small and declining. Male teachers made up just 27.5% of total teacher staff in government schools in 2009, a share which has declined from 31.2% 10 years earlier. Due to a lack of male teachers, the Commonwealth Government introduced legislation to amend the Sex Discrimination Act in 2005 to allow education authorities to offer male-only teacher scholarships. However, the persistent decline in male to female ratio in the profession indicates this legislation has been ineffective at addressing the problem.

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Industry Performance

National reforms for consistencycontinued

– Literacy and Numeracy (NAPLAN) began in 2008 and now tests all students in years 3, 5, 7 and 9 each year. The results of these tests are available publicly, and the My Schools website, run by the Australian Curriculum, Assessment and Reporting Authority (ACARA) allows users to compare various schools based on the NAPLAN results.

ACARA is also developing an Australian curriculum from kindergarten to year 12, in the areas of English, mathematics, science and history (2010). The organisation plans to implement this first stage from 2011, before expanding

the curriculum to include languages, geography and the arts.

These developments have raised reporting requirements in the past three years, which has in turn led to higher administration costs for schools. The launch of the My Schools website has also allowed the direct comparison of schools by region and against other statistically similar schools. This will tend to promote competition between schools and has already caused some controversy within the industry. The government intends to build on these reforms over the coming years.

Government funding State funding is expected to grow by 3.2% per annum over the five years through 2016-17. The number of government students will influence state government funding over the period. In response to a growing population, Queensland and Western Australia are anticipated to expand their school systems. However, the other states are expected to experience flat enrolments, and funding will reflect this. In addition, there will be a push to increase the productivity and efficiency of schools, so that governments can eventually reduce their school spending.

Commonwealth Government funding is forecast to grow by 3.5% per annum over the next five years to reach $4.5 billion in 2016-17. The Rudd and Gillard governments made schooling, particularly at the secondary level, an important part of their agendas. Besides the Building Education Revolution

program that was launched in 2009, $1.2 billion was extended through the National Secondary School Computer Fund. However, allocations of funds from these programs have concluded. The programs currently in place include

Industry Outlook

Over the coming five years, government schools are expected to post moderate growth in revenue, but will continue to face strong competition from private schools. However, the strong growth in births that began in 2005 is anticipated to translate into higher enrolments in government schools. Consolidation of schools is expected to continue, as governments seek to maximise limited

resources. Trends in state government funding will be the main determinant of revenue growth. The industry will also be affected by continued efforts to pursue greater national consistency in schooling in Australia. Over the five years through 2016-17, industry revenue will grow by a forecast 2.8% per annum to reach $43.5 billion. In 2012-13, industry revenue is forecast to grow 2.6%.

% o

f GD

P

2.1

1.7

1.8

1.9

2.0

1602 04 06 08 10 12 14Year

Share of the economy

SOURCE: WWW.IBISWORLD.COM.AU

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Industry Performance

Government fundingcontinued

grants for the development of Trades Training Centres that will provide $2.5 billion over the 10 years to 2018, and the Aboriginal and Torres Strait Island Education Action Plan.

The Federal Government is also expected to provide a higher level of funding to schools (government and non-government) over the next three

years, to support ongoing reforms to achieve greater consistency of education systems across Australia. There are some concerns that primary schools have been ignored in recent Federal Government initiatives, and so these schools may have to rely more heavily on state government funding or private sources of income as a result.

School developments The number of government schools will likely continue to decline gradually in the five years through 2016-17. This will be a continuation of a trend that has occurred over the past five years for schools to seek mergers with other neighbouring schools in order to maximise funding and resources. The decline in school numbers will also be influenced by increased accountability measures by all levels of government aimed at increasing the productivity and

efficiency of government schools.One development which could bring

substantial change to government schools is the National Broadband Network (NBN). The government promises that the NBN will support fast internet services to all of Australia. This will be particularly significant for schools in rural and remote areas, as the internet has already brought substantial change to the education sector, and faster internet service will support an array of new education applications. One

Private funding and demand

Private sources of funding are expected to grow by 5.8% per annum over the five years through 2016-17. Governments have encouraged schools to develop alternative sources of income, and during periods of flat government funding, schools have supplemented funds with private income. In coming years, opportunities may arise for private companies with innovative proposals to develop partnerships with schools to benefit both parties. However, this idea is a controversial one, with fears in the community that this could lead to the corporatisation of schools. Consequently, there is unlikely to be a rapid change in the existing structure of funding, but private sources are expected to increase as a proportion of revenue over the coming years. The move to greater autonomy for schools and decentralisation of schools’ management will also tend to support this trend.

IBISWorld estimates that industry enrolments will increase by 0.5% per

annum over the next five years, a marginal increase in growth compared with the five years through 2011-12. This is based on the mini baby boom that began in 2005. These children have now entered the school-age segment of the population, which will boost enrolments as they move through the school system.

Student enrolments will be affected by an ongoing trend for families to send their children to private schools rather than government schools. Economic recovery will correspond to stronger income growth, which will support higher demand for enrolment in private schools, threatening this industry. As an increasing number of children attend private schools, the children left within the government system tend to be from lower socio-economic backgrounds, have a higher incidence of learning difficulties, and receive less assistance at home. This sometimes creates problems in the classroom, affecting the quality of education.

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Industry Performance

School developmentscontinued

potential outcome could be that several rural schools in one region may amalgamate (as before, in light of low enrolments or to maximise funding), but

will keep locations open as a branch of the one school for greater accessibility to students. This enables the retention of the benefits gained from pooled resources.

National curriculum and other initiatives

The school education system will continue to move towards a more nationally consistent system, while at the same time allowing greater autonomy for government schools in local decision-making. The development and introduction of a national curriculum will proceed over 2011, and education governing bodies will also begin implementing the Australian Education Certificate as the key year 12 certificate. A uniform school system will assist the transfer of students and teachers across borders, with significant potential to reduce duplication and wastage. As noted, this will have some implications for employment and wages.

The Federal Government is promoting the role of the school council in state schools and promoting more devolution of power to school principals in state schools. As mentioned above, this should improve school productivity and the efficient use of resources. More emphasis is being placed on developing greater cohesion between the late primary school and early secondary school years under one broad category titled ‘the Middle Years’. This is encouraging some schools to change their schooling structure.

In the higher levels of school education, schools will become increasingly diversified and more highly attuned to vocational and higher

Fewer teachers, more support staff

In accordance with forecast growth for schools and students, the number of employees is expected to grow slowly over the five years through 2016-17. The number of teachers at government schools is projected to rise by 0.9% per annum, whereas the number of non-teaching staff is forecast to grow by a higher 1.6% per annum. The proportion of non-teaching staff is likely to increase to represent an estimated 36.3% of all government school staff in 2016-17. Total employee numbers are forecast to rise by 1.6% annually in the five years through 2016-17 to total 306,676.

Wages are expected to grow at a higher rate over the next five years at 2.8% annually. Competition to recruit and retain teaching staff is set to increase, as existing staff retire and as fewer differences between state systems encourage greater mobility of teachers. Building on the implementation of a common school starting age in 2010 with the introduction of a national curriculum

in 2011 will lead to increased competition for teachers across states. Already, states such as Western Australia have launched campaigns to recruit teachers from within Australia and from overseas. Recent government initiatives to encourage people into teaching are expected to yield results over the coming five years, which will limit wage rises.

There has also been discussion regarding performance-based pay for teachers as a method to improve teacher quality. Many teachers have been highly resistant to this idea. However, it was put forward at the Australia 2020 Summit and received support. As the various governments seek to increase assessment and accountability in schooling, the performance of teachers is also likely to receive attention. A move to performance-based pay would tend to put upwards pressure on wages, but would not necessarily lead to an increase in wage costs for schools in the medium term.

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Industry Performance

National curriculum and other initiativescontinued

education needs. Schools will need to invest more resources in providing information technology, and this will require more internal resources, and strong ties with other educational institutions as well as employers.

Some governments have taken steps to integrate secondary school with universities. In Queensland, the government set up two schools focusing on particular subject matter, and linked them with local universities in

Brisbane. These schools are meant to offer a more focused education in the subject area chosen by the student. One has a science and mathematics focus, and is partnered with the University of Queensland. The other has a focus on creative industries, and has a partnership with Queensland University of Technology. Another school was planned with an expertise in health sciences and a partnership with Griffith University.

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Industry PerformanceDeclining government school numbers have not led to decreased employment or revenue

Slow growth in the school-age population has limited demand for government school places

Underlying demand will remain due to the compulsory nature of school attendance

Life Cycle Stage

SOURCE: WWW.IBISWORLD.COM.AU

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25

20

15

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–10–10 100 20–5 155 25 30

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% Growth of establishments

declineCrash or Grow?

Potential Hidden GemsFuture Industries

Quality GrowthHigh growth in economic importance; weaker companies close down; developed technology and markets

Time wastersHobby Industries

MaturityCompany consolidation;level of economic importance stable

Shake-out

Shake-out

Quantity GrowthMany new companies; minor growth in economic importance; substantial technology change

Key Features of a Mature Industry

Revenue grows at same pace as economyCompany numbers stabilise; M&A stageEstablished technology & processesTotal market acceptance of product & brandRationalisation of low margin products & brands

Private Schools

Language and Other Education

Government Schools

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Industry Performance

Industry Life Cycle IBISWorld forecasts that the Government Schools industry will underperform the overall economy in the 10 years to June 2012. Industry value added is forecast to grow by 2.7% per annum over the 10-year period whilst GDP is forecast to increase by a higher 3.5% per annum.

The number of schools has been declining in each year from 2005; however, employment and revenue growth have remained positive. Slower enrolment growth and limited resources have encouraged a period of consolidation, increasing the average school size.

Demand for public schools is largely determined by demographic factors, and growth in the school age segment of the population has been fairly stable over the last five years. A mini baby boom will boost growth in government school enrolments over the next five years, and help to offset the effect of competition from private

schools. The industry has been losing students to private schools over the last decade, and this trend persisted even through the global economic crisis, as shown by enrolment figures.

However, there are factors which suggest that the industry will remain in the mature stage of the economic life cycle. Demand for industry services is ensured by its compulsory nature. Enrolment in school is mandatory up to the age of 16 or 17 in most states, and recent moves have been to extending the school leaving age. Year-12 retention rates are relatively high on an historical basis, although they declined slightly in 2005 and 2006. Constraints on government budgets limit revenue growth for schools, but the perceived value of education in society means that continued government funding is virtually ensured.

This industry is Mature

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Products & Services Government schools can be segmented by the level of education that they provide. The majority of schools within the industry are primary schools (over 70%), as they are often smaller in size than secondary schools. In 2010, close to 80% of government schools enrolled 400 students or fewer, while just 2.4% enrolled more than 800 students. Primary education incorporates basic foundation education. The years of this schooling vary slightly depending on the state in which the school is located. For example, in New South Wales, Victoria, Tasmania and the Australian Capital Territory primary school consists of a preparatory grade followed by years 1 to 6. In Queensland, South Australia, the Northern Territory and Western Australia a transition grade is included, followed by years 1 to 7.

Secondary schools account for the next largest number of schools, at about 15.3%. Secondary schools often enrol high numbers of students, and over 31% enrolled more than 800 students in 2010. Secondary schools in New South Wales, Victoria, Tasmania and the Australian Capital Territory begin in year 7 and continue to year 12. In the other states, secondary school starts in year 8.

A number of schools are being

established that cater only for higher secondary education. These usually incorporate a less restrictive educative style, which reflects that of tertiary education. The students have a greater responsibility for attendance, and progress results are given to the students themselves. These schools may be associated or provide links with higher education institutions, provide a year 13 that functions as a tertiary foundation or preliminary year, and may cater for adult students.

Secondary schools are also expanding into vocational education and training, and workforce trainee placements. The Federal Government is promoting the development of Trade Training Centres in secondary schools in order to address skills shortages in traditional and emerging industries. Some schools have also formed partnerships with universities to provide university subjects, including the Queensland Academy for Health Sciences, which began enrolling students from 2008.

Combined primary-secondary schools provide full-time primary education and full-time secondary education. They represent 7.3% of government schools. This category has been

KEy buyING INduSTrIES

Z9901 Consumers in Australia Schools provide education to students typically aged 5 to 17 years. People of all ages may also use school facilities, especially those that are publicly funded.

KEy SELLING INduSTrIES

C2841 Computer and related Equipment Manufacturing in Australia Computers and equipment are used in government schools.

C2842 Telecommunication, broadcasting and Transceiving Equipment Manufacturing in Australia Schools use telecommunications equipment in their operations.

E4115 Institutional building Construction in Australia Schools require these services for construction, alteration, repair and maintenance to schools.

G5243 Newspaper, book and Stationery retailing in Australia notebooks and other stationery products are used by students, teachers, and administrative staff.

O8710 Child Care Services in Australia Child care centres provide before and after school child care services.

Products & MarketsSupply Chain | Products & Services | demand determinants Major Markets | International Trade | business Locations

Supply Chain

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Products & Markets

demanddeterminants

Demand for schools is primarily determined by the number of school-age children. Despite a mini baby boom from 2003 and higher migration, the population aged 19 years and younger has remained static over the last five years, which has not aided school enrolment. However, population growth does vary between states and intrastate and interstate migration will also affect demand in localised areas.

The perceived higher quality of private education compared with the public education system influences the demand for private education. Additionally, the take up non-government education appears highest in secondary school. This trend suggests that private schools are perceived as the better route to gaining a higher education qualification.

As such, non-government or private schools have posed a growing threat to government schools. Since the late 1970s there has been a trend of students leaving government schools to attend private schools instead. The Howard Government’s schools policy accelerated this trend.

Parents choose private schools over government schools for various reasons. Religious values can be an important factor for parents to choose a private school; almost 95% of non-government schools are religiously affiliated. However religious values are not the only reason for this preference. The Australian Survey of Social Attitudes in 2005 found that almost a third of non-government school students came from families which were not part of a church or religious

Products & Servicescontinued

increasing over the past five years. Some combined primary-secondary schools may not provide classes for all years of primary and secondary education (e.g. students may be accepted for the last two years of primary school and for all years of secondary school). A 2007 review of 50 government, Catholic and independent P-12 schools in Victoria coordinated by the Country Education Project found that cohesion in P-12 schools was disappointingly low, as they continue to act as though they are

separate primary and secondary schools, thereby gaining few of the benefits of a combined structure. The report recommended changes to the current primary-secondary structure to a three-tier system, reflecting the phases of student development. The learning stages identified are prep to year 4, years 5 to 9 and years 10 to 12.

Special schools offer education services to disabled children or children that have severe learning disabilities, and represent about 4.9% of the industry.

Products and services segmentation (2011-12)

Total $37.9bn

72.5%Primary school education

15.3%Secondary school education

7.3%Combined school education

4.9%Special school education

SOURCE: WWW.IBISWORLD.COM.AU

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Products & Markets

demanddeterminantscontinued

organization. Former prime minister John Howard has stated that the state system is ‘Too politically correct and too values-neutral,’ and there is evidence that parents are unhappy with the public system’s inability to handle unsatisfactory teachers and disruptive students. These factors have increased demand for private schooling.

The price of private school tuition is an important consideration when parents choose whether or not to send their children to a private school. The cost of non-government education is influenced by the level of Government funding to non-government schools and the extent of extra facilities and opportunities provided by the school. Catholic affiliated schools tend to charge significantly lower fees.

Location is key point for parents selecting a school. A school in a good neighbourhood will attract higher enrolment numbers. Parents are often mindful of the schools situated in the area when they buy a house. Some families however, are prepared to travel to a school with a good reputation, if they are unable to afford to live in that area. Private schools are more likely to draw students from a broader area than public schools, which serve a more captive market.

Another factor is the affordability of private schools. Families may wish to send their children to non-government schools but tuition fees can be prohibitive. Levels of household income affect demand for private schools. Households in the top 20% of income

earners spend considerably more on non-government education relative to other households. An increase in household disposable income will lead to increased demand for private schools, as they become more affordable to families.

A decline in the average family size should generally make it more affordable for families to provide their children with non-government school education, therefore increasing demand for school places.

The apparent retention rate, or proportion of students continuing their education to a given year level, will increase demand for schools in general.

Demand for non-compulsory secondary education is dependent on a wider variety of factors. The income differential between non- high school and high school graduates, and the desire to attend college will increase secondary school completion rates. Government support for students in post-compulsory secondary education (e.g. TAFE and university) will encourage some students to stay in school. Society’s perceptions about leaving school prior to year 12 may deter some students from dropping out of non-compulsory education. These factors contribute to higher enrolment numbers in the final years of secondary school. Conversely, a low unemployment rate and good prospects of obtaining employment without finishing high school will deter students from completing high school.

Major Markets The market for government schools can be segmented by the age of the student. This is determined by the distribution of the school-aged population across the various age groups. There is a strong correlation for the students aged 17 and less, as school attendance is compulsory up to this age in most states.

Government schools enrol 70% of total school students aged four and under, however this proportion declines as the student age increases,

to just 68.7% of those in primary school. This is because an increasing number of students attend private schools as they get older, particularly from year 7 which generally marks the beginning of high school. In 2011, the proportion of students attending government high school was just 60.1%. The final years of schooling make up a diminishing proportion of the school population as school is no longer compulsory from 16-17 years of

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Products & Markets

age. The majority of school students will finish school by the age of 18.

Notably government schools enrol around 57.8% of total school students aged 17 – i.e. students entering the final year of school – the lowest share of school students across the range. This can be attributed to students switching over to non-government schools for their final years of school.

According to the Australian Bureau of Statistics males account for about 51.4% of the students in government schools, and this largely reflects population distribution.

Markets for government schools can also be segmented by income, with households in the higher income quintiles more likely to attend private schools.

International Trade An export of school education is defined as an international student coming to Australia, on a student visa to study in the Australian school system. International students account for less than 1.0% of students studying at Australian schools. IBISWorld forecasts that the number of international school students studying within the Australian school system will decrease by an average of 28.8% per year over the five years to 2012 to total 19,023 students.

The majority of overseas students who study in Australia, study at non-government schools. Approximately 40% of international students attend government schools, and in 2011 this group numbered an estimated 8,361 students, down an estimated 10.2% from 2009. The high Australian dollar over much of 2010 is believed to be

responsible for much of the decline. Government school tuition fees are considerably lower than private school fees. School export revenue is primarily attributable to non-government schools.

Government schools do offer programs for international students and also charge tuition fees. The Victorian Government

Major market segmentation (2011-12)

Total $37.9bn

17.1%Students aged 8 to 9 years10.9%

Students aged 16 to 17 years

17%Students

aged 10 to 11 years

6.3%Students aged

5 years and younger

1.3%Students aged

18 years and older

17%Students

aged 6 to 7 years

15.5%Students aged 12 to 13 years

14.9%Students aged 14 to 15 years

SOURCE: WWW.IBISWORLD.COM.AU

Tuition fees for international students attending Victorian Government schools, 2012

Level

Standard student

($)Sibling student

($)

Primary 9,210 8,290Junior secondary 12,210 10,990Senior secondary 13,640 12,270

SOURCE: AUSTRALIAn EDUCATIOn InTERnATIOnAL

Major Marketscontinued

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International Tradecontinued

offers three-month, six-month and 12-month study abroad programs for international students. These programs include tuition and home stays.

Tuition fees for 2012 are detailed in the accompanying table. It is estimated that government schools’ exports account for less than 1.0% of total industry revenue.

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Products & Markets

SOURCE: WWW.IBISWORLD.COM.AU

TAS3.0

wA11.4

QLd18.3

VIC23.0

NSw32.3

NT2.3

SA8.6

ACT1.2

Government schools (%)

Cold Zone (<10) <25 <50 Hot Zone (<100) Not applicable

business Locations 2011-12

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Products & Markets

business Locations The location of schools is generally determined by the population of school-aged persons in a given area. Families often locate their households in areas that are in close proximity to the schools they choose to send their children. The population of secondary school-aged children within a particular area is influenced by demographics, average family size and school retention rates. Retention rates can vary between areas, and are influenced by a number of factors, but tend to be higher in urban areas and in areas with a higher socio-economic status.

The location of schools and the number of schools established in a particular state is wholly decided at the state level, due to the state and territory control over education policy. This means that States and Territories have evolved quite different schools systems and structures. For example, Queensland and Western Australia did not have a preparatory year of school for a long time (Queensland introduced one in 2007 and Western Australia in 2002).

In addition to state government control of education, the various states also have different population structures to take into account. For example, the Northern Territory has much higher proportions of remote and indigenous students than all other states. In comparison the Australian Capital Territory has none. Another

example is the proportion of students from language backgrounds other than English. Tasmania has the lowest proportion of students from other language backgrounds, and the Northern Territory has the highest.

New South Wales accounts for the largest proportion of school aged children and the highest number of government schools, students and teachers. The state appears to have a small shortage of teachers relative to the school age population, indicating larger class sizes.

Victoria accounts for the next largest segment of the industry, again mainly due to the spread of school age population. However, the proportion of students enrolled in government schools is slightly lower than Victoria’s share of school aged children (23.3% versus 24.1%). This is due

Perc

enta

ge

40

0

10

20

30

WA

ACT

NSW N

T

QLD SA TA

S

VIC

Government schoolsStudents in government schools

Distribution of government schools vs. students in government schools

SOURCE: WWW.IBISWORLD.COM.AU

Perc

enta

ge

40

0

10

20

30

WA

ACT

NSW N

T

QLD SA TA

S

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Government schoolsPopulation

Distribution of government schools vs. population

distribution of school-age population, June 2011State (percentage)

nSW 32.0VIC 32.0QLD 21.2SA 7.0WA 10.6TAS 2.3nT 1.2ACT 1.6

SOURCE: ABS

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Products & Markets

business Locationscontinued

to the higher proportion of students enrolled in non-government schools (25.8% of total non-government students), a result of the extensive development of private schools in Melbourne’s east.

Queensland has larger schools than other states as it only accounts for an estimated 18.3% of schools, relative to its 21.2% share of Australia’s school age population enrolled in government schools. This state has experienced faster population growth than most other states over the past five years, and there may be a lag in school numbers until the state’s education system catches up.

Western Australia, South Australia and the Northern Territory each have

a relatively higher number of schools relative to their student enrolments. Therefore their schools are much smaller in size than those in Queensland and New South Wales. This is likely explained by a lower population density in these states, especially in Western Australia and the Northern Territory, where small schools are spaced across large areas to serve small local communities.

The Australian Capital Territory accounts for a larger number of teachers 1.6%, than both students 1.5% and schools 1.2%. Therefore their ratio of students to teachers is much lower than the national average.

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Key Success Factors Access to highly skilled workforce Skilled and effective teachers will enhance student learning and advance the reputation of a school.

Ability to raise revenue from additional sourcesFundraising skills are becoming increasingly important for schools, to raise additional revenue.

Ability to build support from the local communitySchools depend on parents and the local community for the success of school events, fundraising efforts and other endeavours. Parent involvement in their

child’s progress is also vital to students’ success at school.

Ability to take advantage of government subsidies and other grantsSchool organisations should understand and be able to capitalise on government subsidies.

Access to facilities and provision of additional servicesThe provision of good facilities, educational and sporting programs, such as camps, are beneficial to a school’s success.

Proximity to residential areasSchools will benefit from location in

Market Share Concentration

State governments operate government schools within their own jurisdiction. The state governments control the location and size of all schools within this industry and therefore control the concentration of the industry. However, no one school accounts for more than 1.0% of the industry’s enrolments or revenue.

Governments make the decision to establish a new school based on the spread of the population. Schools located in regional areas are limited by the size of the resident school age population. Governments are influenced by community perceptions about education, and this extends to the size of schools. Small to medium sized schools are believed to deliver a better education, as they can create an atmosphere of community, and students tend to have

better access to their teachers in smaller schools. Experience has shown that as class sizes increase, the quality and effectiveness of the education is detrimentally affected. The same can be said of schools with very large enrolments.

In terms of student enrolments, primary schools tend to be smaller than secondary schools. Close to 80% of primary schools enrol 400 students or less, whereas for secondary schools this proportion is closer to 40%. In 2010, 145 government secondary schools enrolled more than 1,200 students, or around 9.5% of secondary schools. Over two thirds of secondary schools enrolled 800 students or less. The size of schools may increase slightly over the next five years, as governments consider mergers of smaller schools to maximise resources and offer a broader array of subjects.

Competitive LandscapeMarket Share Concentration | Key Success Factors | Cost Structure benchmarks basis of Competition | barriers to Entry | Industry Globalisation

Government schools by number of FTE students, 2010

StudentsPrimary schools

(units)Primary schools

(percentage)Secondary schools

(units)Secondary schools

(percentage)

1–100 1,663 31.1 335 21.9101–400 2,475 46.3 299 19.5401–800 1,081 20.2 416 27.2801+ 128 2.4 482 31.4

SOURCE: ABS

Level Concentration in this industry is Low

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:

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Competitive Landscape

Cost Structure benchmarks

This cost structure represents a national average, and it will vary depending on the size of the school and the state in which it is located. Government schools are operated on a not-for-profit basis, as it is a public service provided by the government. Tuition fees charged by schools are optional, and help to cover the costs of providing the education.

IBISWorld estimates that wages account for 63.6% of industry revenue, which is relatively high by education sector standards. Schools require a significant number of support staff in addition to teachers, which pushes up the labour expense. Labour costs include wages for both teaching and non teaching staff. Teaching staff, classified by the ABS, include teachers, senior teachers

predominantly working as administrators, principals and deputy principals. This group represents approximately 67% of total employees and around 73% of full-time-equivalent employees. An estimated 34.1% of those employed in government schools are non-teaching staff. This group includes teacher aids, specialist support staff, administration and clerical staff, building and maintenance staff, and all other employees that work in government schools. Administration and clerical staff will represent over a fifth of full-time-equivalent staff employed in schools in 2010, up from around 18.7% in 2005.

Over the past five years the cost of wages has increased as a share of revenue from 62% to 63.5% currently.

Key Success Factorscontinued

residential areas that are proximate to families with children.

Developing a good reputationSchools that provide a safe environment

and deliver education to a high standard will establish a good reputation. Student success in final year exams, and in various other school pursuits, will benefit individual schools.

Sector vs. Industry Costs

■ Profi t■ wages■ Purchases■ depreciation■ utilities■ rent■ Other

Average costs of all industries in

sector (2011-12)Industry costs

(2011-12)

0

20

40

60

Perc

enta

ge o

f rev

enue

80

100 3.8

15.71.8 0.8

5.113.0

59.7

15.10.94.8

15.6

63.6

SOURCE: WWW.IBISWORLD.COM.AU

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Competitive Landscape

basis of Competition In the past, competition has not been a significant factor for government schools, which usually cater for a specific geographic area and have a captive market. Most students will attend a school which is within close proximity to the home, especially for primary school children. Government schools must accept any student who lives in their area. Families have a choice of sending their children to a government or non-government school. Non- government schools have provided strong competition for government schools over the last 10 years.

According to data from the ABS, enrolment at government schools has declined from 70.3% of all students in 1997, to 65.7% of students in 2009. Non-government school enrolments rose by over 26% during this period, compared to a mere 2% increase in government school enrolments, indicating that government schools are

losing students to the private system.Government schools mainly compete

with non-government schools on the perceived benefit to price ratio. Private schools often have better facilities, programs, teachers and resources. If parents believe that the benefit of attending a non-government school outweighs the cost, they will choose a non-government education. However, tuition fees for private schools are prohibitive for many families, and this reduces competition from private schools. Various scholarships are available to students, which reduce the price effect on competition, however they are relatively few

The performance of a school is a key factor of competition between schools. Performance is most often measured by student academic results in final year examinations for university entrance. A school with experienced staff and a strong academic curriculum will attract

Cost Structure benchmarkscontinued

In recent years there has been pressure for state governments to raise teachers’ pay, which has contributed to an increase in wage costs for schools.

Purchases include educational supplies, such as learning aids and books. Computer software is another component, and as schools make greater use of ICT in the classroom, this cost is likely to increase. Other operating expenses represent 9.8% of the cost structure, and cover staff related costs (excluding wages), communication expenses, computer support, insurance, security, travel, and scholarships.

A depreciation expense of 4.8% in 2011-12 includes capital works on buildings and equipment. Capital investment was lifted in 2009 and 2010 with the injection of federal funds as part of the Government’s education revolution initiative. The construction of facilities such as school halls and libraries across the country has lifted capital investment for school level education, in both the public and private sectors.

Recent changes and extra requirements implemented by the Federal Government have increased administration costs for government schools, estimated at 1.5%. Efforts to develop greater national consistency in schools have created some costs, including projects to introduce a preparatory year in all states and a common age for school entry. Reworking the curriculum around three learning stages, and improving cohesion between the primary and secondary levels has also increased school expenses. For example, education departments have had to develop programs and teacher training specific to the first three years of school. Finally, stricter assessment and reporting requirements on numeracy and literacy have meant added costs for government schools.

Government schools do not have to pay rent, as school premises are provided by the government. Government schools do pay for utilities; however, this is a small proportion of the cost structure.

Level & Trend Competition in this industry is Low and the trend is Increasing

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Competitive Landscape

Industry Globalisation

This is a domestically oriented industry which has a low level of globalisation. Government schools are a service provided predominantly to Australian residents, and the

industry is very heavily subsidised by various levels of government. There is no foreign ownership of schools, which are owned by state, territory or federal governments.

barriers to Entry The establishment of a new school within this industry is wholly determined by the various state and territory governments. Therefore heavy regulation poses a large barrier to entry. The decision to establish a new school is based on factors such as population growth, age demographics and existing school facilities. This industry has experienced a moderate decline in school numbers over the past five years. The Victorian and Tasmanian governments have considered amalgamating schools to maximise resources in recent years. Declining enrolments in some areas have also prompted governments to consider this option. In this climate, new schools will only be established in areas of strong population growth and undersupply.

Land requirements are another potential barrier preventing new schools from being established, especially in highly populated areas. The cost of developing the infrastructure necessary for schools is high, and can include building construction, equipment and facilities.

basis of Competitioncontinued

enrolments. Prior experience can also influence parent choice of schools. For example if families have a child enrolled at a certain school, they may be more likely to enrol younger siblings there as well. Older schools are able to develop links with parents who were past students, although this is much more common in the private school sector.

Competition for government schools varies depending on the location of the school. For example, a good government school in a wealthier suburb may face more competition from non-government schools than from other government schools. This is because families living in wealthier areas can often afford

non-government schools and so demand for government schooling is lower. By contrast, government schools in poorer regions may face higher levels of competition with other government schools because families in these areas are less likely to be able to afford private school education.

A school’s facilities can give it a competitive advantage over other schools. These may include computer laboratories, sports grounds, performing arts facilities, and so on. Extra-curricular activities are another basis of competition. A school that offers after-school sport may have a competitive advantage over another.

barriers to entry checklist Level

Competition LowConcentration LowLife cycle stage MatureCapital intensity LowTechnology change MediumRegulation and policy HeavyIndustry assistance High

SOURCE: WWW.IBISWORLD.COM.AU

Level & Trend Barriers to Entry in this industry are High and Steady

Level & Trend Globalisation in this industry is Low and the trend is Steady

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Other Companies There are no major players in the Government Schools industry. However, as school education was traditionally state based, each state or territory provides its own system of education. The following is an outline of some of the different government school systems within Australia.

New South WalesCompared with most other states, the management of government schools in New South Wales is highly centralised at the government departmental level. The Department of Education and Training’s major priorities have included promotion of a well-developed foundation of skills among students; excellence in teaching and learning; strong partnerships with parents, teachers and students; safe, challenging and creative schools; and a strong commitment to equity.

According to the NSW Department of Education and Training website, the department is the largest single organisation, public or private, in Australia. The department provides education for about two-thirds of NSW children, or 737,549 students at 2,181 government schools in 2009. Of these, about 75% are primary schools, another 17% are secondary schools, 5.0% are specialist schools, and combined schools hold the remaining share.

State funding for primary and secondary schools increased by 0.9% in real terms to $10.2 billion in 2008-09 (latest available data). The department plans to implement various policies over the next several years, which include a literacy and numeracy assessment program, expansion of technology-based learning in government schools, support for new teachers, a transition program for students entering year 7, improvements to Aboriginal student outcomes and upgrades of science laboratories and school halls.

VictoriaThe Victorian Government schools system had 1,575 schools in 2009, enrolling 540,359 full-time and part-time

students. The state has a more decentralised system than New South Wales, which allows for devolution of management responsibility to individual government school communities. This dispersion has occurred in fund management, as well as broad education policy development.

The result has been fewer resources required at the departmental level, reducing out-of-school costs, which represent 75% of the Australian average. According to the Ministerial Council on Education, Employment, Training and Youth Affairs, Victoria currently spends the least per student, at an average $8,954 for primary school students and $11,269 for secondary school students, compared with the national average of $9,748 per primary school student and $12,222 per secondary student.

Over the past five years, state government funding was directed to numerous programs aimed at improving the education system. It has sought to increase staff numbers and reduce class sizes, assist students with special needs and ‘needy’ non-government schools, expand the use of computers and IT in schools, improve literacy and numeracy in the early years, promote science education and vocational education in schools, and improve information and communications in government schools. A four-year Victorian Schools Plan aims to rebuild or modernise every government school in Victoria by 2016-17.

Over the five years through 2008-09, state government funding rose by an annualised 2.3% per annum in real terms. During 2008-09, state funding rose by 5.4%, after six years of low growth not exceeding 2.6%. The government cited efficient service delivery and the continued success of schools to raise funds locally for the low funding growth prior to 2008-09.

QueenslandThe Queensland education system is administered by the Department of Education, Training and the Arts. Within this department Education

Major CompaniesThere are no major players in this industry | Other

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Major Companies

Other Companiescontinued

Queensland is responsible for education. Queensland accounts for about 18.3% of government schools in Australia, or 1,245 schools in 2009. The state enrolled 490,690 students in 2009. The state has organised its schooling into three segments: the early, middle, and senior phases of learning. The early phase of learning includes years prep to 3, and accounts for about 30% of students. The middle phase enrols nearly 50% of students, and includes years 4 to 9. The senior phase includes years 10 to 12 and enrols just over 20% of students.

In contrast to the rest of Australia, Queensland has experienced strong growth in the number of school children in recent years. From 2006 to 2009, total school enrolments rose by 9.3%, and government school enrolments increased by 6.7%. Queensland state funding for schools has grown by 2.9% per annum over the five years to total $6.37 billion in 2008-09. This includes funding to both government and non-government schools (about 8.0% goes to non-government schools).

During 2007-08, the education department spent $49.8 million on prep facilities, and $32.3 million on new state schools. The average cost per service to student varied with their level of education. The cost of service to students in the early phase of learning (prep to year 3) was $9,244 per student. For students in the middle phase of learning (years 4 to 9), the cost per student was $8,926. The average cost of service for students in the senior phase of learning (years 10 to 12) was $10,428. For students with disabilities, the calculated cost was much higher, at $25,316 per student.

In 2006-07, the state government invested over $100 million to develop eLearning in school classrooms. A four-year initiative to reduce barriers for students with disabilities was also begun, costing $34 million. The state government has gradually increased its funding per student over the past four years, especially in the years ended 2005 and 2006. In the 2006-07 budget, $1.0 billion was budgeted for Tomorrow’s Schools capital

works. Of this, $900 million was allocated to government schools, and $100 million allocated to non-government schools over the next five years.

ReformsOne of the main changes for Queensland’s school was the transformation of the primary schooling years to include a preparatory year. This was trialled in 39 schools in 2003, increasing to 66 schools in 2004. By 2006, 121 schools had incorporated a preparatory year, and by 2007 schools had incorporated the preparatory year state-wide. This project involved a large capital works program to refurbish and create 500 classrooms, totalling $133.5 million. The Queensland Government has also been developing a curriculum focusing upon the three learning phases of childhood.

Another aspect of reform has been a change to the minimum school leaving age. The Youth Participation in Education and Training Act 2003 became effective in 2006, and requires students to stay in school until they are 16, or once they complete year 10. Students are then required to participate in education and training for another two years, or gain a senior certificate or certificate III in a vocational qualification.

Western AustraliaThe WA Government provided schooling to 234,451 students through 771 public schools in 2009. Schools can be divided into 510 public primary schools, 99 secondary schools, 95 combined schools and 67 specialist schools (education support and language development facilities). Included in this tally are about 26 remote community schools, which enrol about 1,600 students.

In 2007, $95.7 million was distributed to public schools under the school grant process, up from $92.8 million in 2006. Capital expenditure on public schools in 2007-08 totalled $356 million, spent on the completion of 11 new schools and additions and improvements to others.

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Major Companies

Other Companiescontinued

WA state funding for schools has grown by 3.7% per annum over the five years through 2008-09 to total $4.0 billion in this year. This includes funding to both government and non-government schools (about 8.0% goes to non-government schools). Funding has largely kept pace with enrolment growth, with total student numbers (in public and private schools) up 3.4% from 2006 levels.

South AustraliaThere are about 169,000 students

enrolled in government schools in South Australia, in about 588 government schools. Student numbers have been declining – in the 10 years to 2008, enrolments fell by 0.8% per annum. Enrolments in government schools rose by 0.2% in 2009.

SA state funding for schools has grown by 2.6% per annum over the five years to 2008-09 to total $2.67 billion. This includes funding to both government and non-government schools (about 8.0% goes to non-government schools).

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Capital Intensity Government schools have a high labour intensity, as teacher wages form the largest component of recurrent costs for a school. Schools require a particularly high level of labour as students need supervision and teacher direction. The teacher-student ratio is high compared to other education industries such as higher education. Labour costs account for 63.5% of total expenditure, higher than the industry average of approximately 55%. Therefore, the industry has a higher labour intensity than most other education industries, where students take more responsibility for their learning.

Investment in non-property assets is low and mainly related to teaching aids (e.g. computers, lab equipment), however information technology and science-related expenditure is likely to increase.

Investment was lifted with the Federal Government’s 2009 stimulus package, which included $15 billion in spending on infrastructure for schools.

Operating ConditionsCapital Intensity | Technology & Systems | Industry Volatilityregulation & Policy | Industry Assistance

Tools of the trade: Growth strategies for success

SOURCE: WWW.IBISWORLD.COM.AU

Labo

ur In

tens

ive Capital Intensive

Change in Share of the Economy

New Age Economy

recreation, Personal Services, Health and Education. Firms benefi t from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labour skills are key to product differentiation.

Traditional Service Economy

wholesale and retail. Reliant on labour rather than capital to sell goods. Functions cannot be outsourced therefore fi rms must use new technology or improve staff training to increase revenue growth.

Old Economy

Agriculture and Manufacturing. Traded goods can be produced using cheap labour abroad. To expand fi rms must merge or acquire others to exploit economies of scale, or specialise in niche, high-value products.

Investment Economy

Information, Communications, Mining, Finance and real Estate. To increase revenue fi rms need superior debt management, a stable macroeconomic environment and a sound investment plan.

Private Schools

Computer and related Equipment Manufacturing

Language and Other Education

Telecommunication, broadcasting and Transceiving Equipment Manufacturing

Institutional building ConstructionGovernment Schools

Capital intensity

0.5

0.0

0.1

0.2

0.3

0.4

SOURCE: WWW.IBISWORLD.COM.AUDotted line shows a high level of capital intensity

Capital units per labour unit

Government Schools

EducationEconomy

Level The level of capital intensity is Low

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Operating Conditions

Technology& Systems

The use of technology is increasing at both levels of education. However, primary education tends to have less technology usage than secondary schools. Technology use in schools mainly relates to teaching aids (such as computers, audio and video recorders). There is an issue of equity in technology provision. The concern is that equality of opportunity, both during education years and then in the workforce, is at risk. Some schools require students to own a computer.

There are a number of concerns related to the implementation of technology based education. These include a lack of training and competence of teachers, a lack of technical resources to keep computers, printers, networks, and the internet in working order, and an absence of curriculum policies designed to integrate the use of computers into classroom practice.

There has been increasing use of technology in schools due to the higher level of technological requirements in society. According to a study by the OECD, almost 100% of students in Australian schools have access to a computer in school, which drops slightly when home access is analysed. However, according to students’ self reporting, students have a 60% chance of using a computer a few times a week at schools. If they have a computer at home, this increases to 90%. Within schools, the study estimates that there are about 0.27 computers per student in Australia.

Virtual excursions and online contentDistance and Rural Technologies, part of the NSW Department of Education and Training, uses various technologies to deliver education to remote parts of Australia. One of the main technologies used is video-conferencing, which amongst other things, allows students to join classes from a remote location, and to go on virtual excursions to NASA and Alaska. For more information refer to their website: http://dart.det.nsw.edu.au.

The Learning Federation: Schools Online Curriculum Content Initiative develops digital curriculum

content which is made freely available to all Australian and New Zealand schools. From 2006-2008 the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA), has worked to develop a further 4,000 online curriculum resources and applications.

The Australian Information and Communications Technology in Education Committee (AICTEC) represents the education and training sector and contributes to issues of education use of information and communications technology (ICT). The Victorian Government Department of Education has an ICT showcase which has samples of resources which can be used by teachers in the classroom, as well as links to various digital and web resources.

Technology in schoolsIn 2006, Editure, a global educational services company, acquired and integrated myinternet (previously known as Schoolsnet Australia) with their current range of products. myinternet provided internet products to school-aged children, which included messaging, notice boards, special-subject news groups and an Internet environment. In addition, the company also provides administration technologies to assist the organisation of classes and marking for teachers. Blackboard is also used in some schools in Australia. Blackboard offers e-Educational enterprise software applications to education institutions at all levels.

Schools increasingly use intranets to distribute newsletters and for parent communication. Some teachers are also integrating web-based programs such as forums and blogs into their teaching. Devices such as interactive whiteboards allow students and teachers to compose attractive, reproducible and customised diagrams, and manipulate existing diagrams to aid learning.

NetworksThe Interactive Satellite Television Network provides specialist educational programs. These programs allow schools to provide courses in specialist areas

Level The level of Technology Change is Medium

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Operating Conditions

regulation & Policy The industry is highly regulated due to its extensive nature and importance to society. Government schools are predominantly regulated by state governments; however, the Federal Government has increased its involvement in regulating the schools in recent years. The Federal Government grants funding to the states for their education systems, and is able to put conditions on this funding. The Federal Government has lifted its requirements from the states on funding granted to them.

Federal GovernmentFederal Government funding for schools

is legislated in four-year blocks, and in the 2005-08 period, $33 billion has been allocated, an increase of $9.5 billion over the previous four-year period. This funding is provided to both government and non-government schools. This budget allocation was passed through The Schools Assistance (Learning Together – Achievement through Choice and Opportunity) Act 2004. The previous legislation was the States Grants (Primary and Secondary Education Assistance) Act 2000, enacted for funding between 2001 and 2004.

Through control of the funding of schools, the Federal Government has

revenue Volatility Student numbers are quite stable as they are based on demographic trends, and most years of school are compulsory. The industry is government funded, and this is set by the Federal Government every

four years, ensuring revenue stability. Schools receive virtually all revenue from government sources, and as it is a basic service provided by the government, this will continue in the future.

Technology& Systemscontinued

and improve educational outcomes. At the same time the programs reduce the need to employ teaching staff in these areas, effectively reducing the cost of providing these courses.

The Commonwealth Government provides ongoing support for the national education network, Education Network Australia (EdNA). EdNA is a

service designed to link schools, TAFEs, universities and other education and training providers through a service network and modern technology for interactive communication. The EdNA initiative is a collaborative effort and can reduce the costs involved if individual schools (or systems) developed their own disparate systems.

SOURCE: WWW.IBISWORLD.COM.AU

Volatility v. Growth

reve

nue

vola

tility

* (%

)

1000

100

10

1

0.1

Five year annualised revenue growth (%)–30 –10 10 30 50 70

Hazardous

Stagnant

rollercoaster

blue Chip

* Axis is in logarithmic scale

Government Schools

A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment.

When a fi rm makes poor investment decisions it may face underutilised capacity if demand suddenly falls, or capacity constraints if it rises quickly.

Level The level of Volatility is Low

Level & Trend The level of Regulation is Heavy and the trend is Increasing

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Operating Conditions

regulation & Policycontinued

expanded reporting requirements, and asked for a higher level of national consistency between the state education systems. In addition, it has increased funding to non-government schools in order to expand competition with government schools.

National Literacy and Numeracy PlanDuring 2000, the Commonwealth Parliament passed legislation to introduce more robust national reporting of education outcomes. State and territory ministers have agreed to support performance targets for primary school literacy and numeracy, as a condition of the Commonwealth’s financial assistance grants for schooling in Australia. National benchmarks are already agreed for years 3, 5 and 7 literacy and numeracy. The results are reported in the National Report on Schooling in Australia each year. From 2005, state schools were required to implement plain-English report cards for students, and to rank the performance of students.

The structure of primary and secondary schooling in Australia varies between states and territories – in New South Wales, Victoria, the Australian Capital Territory and Tasmania, secondary school begins from year 7, whereas for the other states it commences from year 8. The federal government implemented a common school starting age in 2010. All states now commence schooling from a preparatory year, and Queensland was the last state to implement this in 2007. There have been recommendations for the current primary-secondary system be standardised, and divided into three tiers to reflect the phases of student development. Queensland has taken action on this by developing curriculum based around the early, middle and senior learning phases.

State and Territory Regulation State and territory education departments are ultimately responsible for administrative functions such as allocation of funding; locations of new schools; broad-scale curriculum and assessment standards; and teacher training requirements and employment distribution policies.

The push towards national consistency has caused several state and territory departments to revise their age requirements for students starting and finishing school. South Australia lifted its school leaving age from 16 to 17 in 2009. Tasmania enacted a requirement in 2007 that school leavers participate in education or training until they are 17 years old. New South Wales brings in the same requirement from 2010. Queensland changed the school leaving age to 16 years, or the completion of year 10. If a student does leave school at the age of 16, they are still required to undertake formal training in vocational training at a TAFE or vocational education provider for the next two years.

CollaborationOn a national level, curriculum review projects are undertaken by the Curriculum Corporation. The Curriculum Corporation is a partnership of all Australian Education Ministers, and is owned by Commonwealth, state and territory governments. The non-government school sector is also represented on the corporation’s board. The corporation was established in 1989 as one of a series of initiatives aimed at developing a collaborative approach to Australian schooling. The corporation is responsible for initiatives including the National Tuition Program (now finished), which provided $700 of tuition free to children who failed to meet one of the national literacy or numeracy benchmarks.

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Operating Conditions

Industry Assistance Government schools are a publicly funded service and rely on the governments of Australia for over 98% of their total revenue. Funding for government schools is provided through the National Education Agreement (NEA), negotiated by the Council of Australian Governments (COAG). The funding legislation covers the years 2009 to 2012, and is provided separately of private schools. The agreement succeeds the Schools Assistance (Learning Together – Achievement Through Choice and Opportunity) Act 2004, which provided funding for both government and non-government schools for the years 2004 to 2008.

State and territory governments are the major supporters of government schools, supplying roughly 90% total school funding. For further discussion of state funding and tables refer to the current performance section of the report.

Federal Government funds represent an estimated 7.8% of total spending on government schools. Total federal funding for all schools (public and private) was $11.27 billion in 2008-09, up from $8.91 billion the previous year. Government schools received an estimated 27% of these funds. The Federal Government, under the Commonwealth Programs for Schools, provides recurrent and capital funding for schools, as well as targeted grants particularly aimed at fostering literacy and numeracy, languages, special learning needs, indigenous education, quality outcomes, and school to work transition.

The 2008-09 Federal Budget allocated $1.7 billion for school capital works over four years, to fund infrastructure and maintenance works in schools. Another allocation of $577.4 million over four years will support literacy and numeracy programs in schools with poor results. In 2009 Public Schools could access $14.7 billion in funding for infrastructure projects under the government’s stimulus package. Close to 100% of schools have

taken up the offer to build school halls, libraries and undertake other projects.

The digital education revolutionThe Digital Education Revolution committed $1.2 billion to extend the National Secondary School Computer Fund beyond its initial four year period, provide ‘fibre to the premises’ broadband to all Australian schools; ensure all teachers have adequate ICT skills; and support the use and access to the technology. The National Secondary Computer Fund allows schools to purchase ICT equipment, including computers, interactive whiteboards, data projectors, and digital cameras. Although all the states and territories signed up for the funding, there have been some difficulties with the implementation of the initiative.

Trades training centresAs part of its Education Revolution, the Commonwealth Government announced $2.5 billion in funding to secondary schools to establish trades training centres from 2008 to 2018. This initiative is intended to address Australia’s skills shortages problem, by increasing the proportion of students who achieve year 12 or an equivalent qualification. Phase One saw over $90 million authorised for various projects such as the Aviation High Aeroskills and Aeronautics Training Centre in Queensland. Eligible schools can seek between $500,000 and $1.5 million in total over the life of the Program.

Other sourcesGovernment schools are increasingly looking for alternative sources of income other than the various levels of government. According to an article in The Age (January 2007), Melbourne High School was the most successful fundraising school in Victoria, raising over $4 million in extra funds for the school. The average amount raised by the schools in Victoria was $240,000.

Level & Trend The level of Industry Assistance is High and the trend is Increasing

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Key Statisticsrevenue

($m)

Industry Value Added

($m)Establish-

ments Enterprises Employment Exports Importswages ($m)

domestic demand

Enrolments (’000

students)2002-03 31,287.8 20,854.7 7,144 6,930 248,493 -- -- 19,572 n/A 2,254.62003-04 31,909.9 21,102.4 7,153 6,938 253,307 -- -- 19,762.3 n/A 2,2502004-05 32,181.2 21,210.9 7,143 6,929 253,209 -- -- 19,827.2 n/A 2,246.12005-06 32,041.1 21,326.2 7,115 6,902 257,918 -- -- 19,852.3 n/A 2,248.22006-07 32,367.3 21,452 7,063 6,851 265,030 -- -- 19,963 n/A 2,268.42007-08 33,020.4 22,354.8 7,044 6,833 266,686 -- -- 20,802.9 n/A 2,264.62008-09 33,908 23,023.6 7,012 6,802 272,265 -- -- 21,396 n/A 2,273.92009-10 36,147.7 24,688.8 6,948 6,743 273,691 -- -- 22,917.7 n/A 2,282.42010-11 36,979.1 25,256.6 6,938 6,730 280,697 -- -- 23,481.7 n/A 2,294.32011-12 37,903.6 25,910.8 6,917 6,709 283,383 -- -- 24,106.6 N/A 2,301.32012-13 38,889.1 26,561.2 6,945 6,703 285,812 -- -- 24,694.5 n/A 2,310.72013-14 39,939.1 27,078.8 6,919 6,670 291,045 -- -- 25,161.7 n/A 2,3222014-15 41,057.4 27,960 6,885 6,609 298,117 -- -- 25,989.3 n/A 2,333.42015-16 42,289.1 28,883.5 6,836 6,563 300,433 -- -- 26,853.6 n/A 2,345.42016-17 43,515.5 29,590.5 6,879 6,569 306,676 -- -- 27,632.3 n/A 2,356.2Sector rank 1/6 1/6 2/6 2/6 1/6 N/A N/A 1/6 N/A N/AEconomy rank 34/495 18/495 89/495 71/495 16/495 N/A N/A 9/495 N/A N/A

IVA/revenue (%)

Imports/demand (%)

Exports/revenue (%)

revenue per Employee

($’000)wages/revenue

(%)Employees

per Est.Average wage

($)

Share of the Economy

(%)2002-03 66.65 n/A n/A 125.91 62.55 34.78 78,762.78 2.002003-04 66.13 n/A n/A 125.97 61.93 35.41 78,017.19 1.952004-05 65.91 n/A n/A 127.09 61.61 35.45 78,303.69 1.902005-06 66.56 n/A n/A 124.23 61.96 36.25 76,971.36 1.852006-07 66.28 n/A n/A 122.13 61.68 37.52 75,323.55 1.802007-08 67.70 n/A n/A 123.82 63.00 37.86 78,005.22 1.812008-09 67.90 n/A n/A 124.54 63.10 38.83 78,585.20 1.832009-10 68.30 n/A n/A 132.07 63.40 39.39 83,735.67 1.922010-11 68.30 n/A n/A 131.74 63.50 40.46 83,654.97 1.942011-12 68.36 N/A N/A 133.75 63.60 40.97 85,067.21 1.912012-13 68.30 n/A n/A 136.07 63.50 41.15 86,401.20 1.882013-14 67.80 n/A n/A 137.23 63.00 42.06 86,452.95 1.862014-15 68.10 n/A n/A 137.72 63.30 43.30 87,178.19 1.862015-16 68.30 n/A n/A 140.76 63.50 43.95 89,382.99 1.872016-17 68.00 n/A n/A 141.89 63.50 44.58 90,102.58 n/ASector rank 3/6 N/A N/A 2/6 1/6 2/6 2/6 1/6Economy rank 34/495 N/A N/A 422/495 8/495 80/495 76/495 18/495

Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.

revenue (%)

Industry Value Added

(%)

Establish-ments

(%)Enterprises

(%)Employment

(%)Exports

(%)Imports

(%)wages

(%)

domestic demand

(%)Enrolments

(%)2003-04 2.0 1.2 0.1 0.1 1.9 n/A n/A 1.0 n/A -0.22004-05 0.9 0.5 -0.1 -0.1 0.0 n/A n/A 0.3 n/A -0.22005-06 -0.4 0.5 -0.4 -0.4 1.9 n/A n/A 0.1 n/A 0.12006-07 1.0 0.6 -0.7 -0.7 2.8 n/A n/A 0.6 n/A 0.92007-08 2.0 4.2 -0.3 -0.3 0.6 n/A n/A 4.2 n/A -0.22008-09 2.7 3.0 -0.5 -0.5 2.1 n/A n/A 2.9 n/A 0.42009-10 6.6 7.2 -0.9 -0.9 0.5 n/A n/A 7.1 n/A 0.42010-11 2.3 2.3 -0.1 -0.2 2.6 n/A n/A 2.5 n/A 0.52011-12 2.5 2.6 -0.3 -0.3 1.0 N/A N/A 2.7 N/A 0.32012-13 2.6 2.5 0.4 -0.1 0.9 n/A n/A 2.4 n/A 0.42013-14 2.7 1.9 -0.4 -0.5 1.8 n/A n/A 1.9 n/A 0.52014-15 2.8 3.3 -0.5 -0.9 2.4 n/A n/A 3.3 n/A 0.52015-16 3.0 3.3 -0.7 -0.7 0.8 n/A n/A 3.3 n/A 0.52016-17 2.9 2.4 0.6 0.1 2.1 n/A n/A 2.9 n/A 0.5Sector rank 4/6 4/6 6/6 6/6 5/6 N/A N/A 4/6 N/A N/AEconomy rank 202/495 197/495 345/495 333/495 244/495 N/A N/A 136/495 N/A N/A

Annual Change

Key ratios

Industry data

SOURCE: WWW.IBISWORLD.COM.AU

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Jargon & Glossary

bArrIErS TO ENTry Barriers to entry can be High, Medium or Low. High means new companies struggle to enter an industry, while Low means it is easy for a firm to enter an industry.

CAPITAL/LAbOur INTENSITy An indicator of how much capital is used in production as opposed to labour. Level is stated as High, Medium or Low. High is a ratio of less than $3 of wage costs for every $1 of depreciation; Medium is $3-$8 of wage costs to $1 of depreciation; Low is greater than $8 of wage costs for every $1 of depreciation.

CONSTANT PrICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using 2011-12 as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving only the ‘real’ growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using the Australian Bureau of Statistics’ implicit GDP price deflator.

dOMESTIC dEMANd The use of goods and services within Australia; the sum of imports and domestic production minus exports.

EArNINGS bEFOrE INTErEST ANd TAX (EbIT) IBISWorld uses EBIT as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding tax and interest.

EMPLOyMENT The number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees.

ENTErPrISE A division that is separately managed and keeps management accounts. The most relevant measure of the number of firms in an industry.

ESTAbLISHMENT The smallest type of accounting unit within an Enterprise; usually consists of one or more locations in a state or territory of the country in which it operates.

EXPOrTS The total sales and transfers of goods produced by an industry that are exported.

IMPOrTS The value of goods and services imported with the amount payable to non-residents.

INduSTry CONCENTrATION IBISWorld bases concentration on the top four firms. Concentration is identified as High, Medium or Low. High means the top four players account for over 70% of revenue; Medium is 40 –70% of revenue; Low is less than 40%.

INduSTry rEVENuE The total sales revenue of the industry, including sales (exclusive of excise and sales tax) of goods and services; plus transfers to other firms of the same business; plus subsidies on production; plus all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded.

INduSTry VALuE AddEd The market value of goods and services produced by an industry minus the cost of goods and services used in the production process, which leaves the gross product of the industry (also called its Value Added).

INTErNATIONAL TrAdE The level is determined by: Exports/Revenue: Low is 0-5%; Medium is 5-20%; High is over 20%. Imports/Domestic Demand: Low is 0-5%; Medium is 5-35%; and High is over 35%.

LIFE CyCLE All industries go through periods of Growth, Maturity and Decline. An average life cycle lasts 70 years. Maturity is the longest stage at 40 years with Growth and Decline at 15 years each.

NON-EMPLOyING ESTAbLISHMENT Businesses with no paid employment and payroll are known as non-employing establishments. These are mostly set-up by self employed individuals.

VOLATILITy The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: Very High is greater than ±20%; High Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility is less than ±3%.

wAGES The gross total wages and salaries of all employees of the establishment.

Industry Jargon

IbISworld Glossary

COAG Council of Australian Governments

FTE The term is applied to staff and student numbers and measures their number in full-time equivalents, rather than part-time loads.

ICT Information and Communication Technology – used to describe a range of technologies for gathering, storing, retrieving, processing, analysing, and transmitting information.

rETENTION rATE Measures the proportion of students which continue through various levels of education.

Page 37: N8426 Government Schools in Australia Industry Report

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