School refusal is on the rise, two in 10 teenagers are dropping out before year 12 and families are turning away from government schools at record levels.
The Productivity Commission’s latest report on education services, released on Tuesday evening, makes for grim reading for the sector – with a few silver linings.
As the commonwealth government seals deals with the states to finally get public schools to full funding, here are three key takeaways on the state of education in Australia.
Attendance is down, and so is retention
School attendance rates have fallen to a 10-year-low and more than two in 10 students are failing to continue through to year 12, the report shows.
Nationally in 2024, 85.9% of students attended school regularly, decreasing annually in all jurisdictions except Western Australia, South Australia and Tasmania, where they remained stable. It was a -0.5% decrease from 2023 (86.4%) and a drop of more than 5% from 2015 (91.2%).
Gaps also persist for Aboriginal and Torres Strait Islander students across all school sectors and year levels. Just 76.9% regularly attended school in 2024, the second-lowest rate in a decade and a decline from 77.4% in 2023.
Similarly, 89.2% of students in years 1 to 10 attended school regularly in major cities. But that decreased with distance, dropping to 81% for remote students and 65.8% for very remote students.
Retention rates, which show the number of full-time students in year 10 that continue to year 12, have also fallen to a decade low. The retention rate was 78.7% in 2023, continuing a downward trend from 83.3% in 2017. Private schools had significantly fewer school leavers (87.2%) than public schools, where around three in 10 failed to reach year 12 (73%).
One caveat to retention rates: they only determine the total number of students in each year level, not the individual trajectory of school leavers – who might move, choose to repeat a year or intend to return.
The latest attainment data, for 2022, showed 76.3% of students graduated year 12.
Private school funding slowing – but enrolments high
Public schools do the heavy lifting educating students from equity groups but funding to the sector has historically grown at a slower rate than for non-government schools. This year’s data indicates that may slowly be changing.
Government recurrent expenditure on school education was $85.9bn in 2022-23, a 4.4% increase in real terms from the previous year.
Nationally, recurrent expenditure for each full-time equivalent (FTE) student was $21,169, including $14,561 for non-government school students and $24,857 for government school students (or $20,581 excluding capital costs – spending on school infrastructure).
Dating back to 2013-14, real terms expenditure for each student has risen for private schools at a rate of 3.1% each year, compared with just 2.8% for public schools.
Data shows funding to the private sector has marginally slowed, by -0.7% compared with 2021-22 ($23,548 for each student). Funding to government schools increased by 5.5% in the same period, including capital costs.
Importantly, the commission’s data for non-government schools excludes capital costs, and still the second-highest levels for the non-government sector on record– at the same time the federal government needs to reduce payments to historically overfunded private schools by 2029.
Data shows a record low of 63.9% of students were enrolled in government schools in 2023, which enrol almost three times the number of Aboriginal and Torres Strait Islanders as private schools, according to the commission, and more than double the number of students from low-socioeconomic backgrounds.
More than a quarter (25.5%) of public school students had an educational adjustment due to a disability in 2023, compared with 21.8% at Catholic schools and 21.9% at independent schools.
Reforms to childcare are working
The report found changes to the childcare subsidy had “significantly reduced” out-of-pocket costs for families, particularly at lower income levels.
In July 2023 Labor introduced changes to the subsidy aimed at reducing expenses for families of all income categories with one child in 30 hours of care, part of its push for universal childcare.
The federal government’s $5.4bn scheme raised the maximum subsidy rate from 85% to 90% alongside a more generous income test, estimated to impact 1.2 million families across Australia.
In the March 2024 quarter, after subsidies, the report found out-of-pocket costs decreased across all eligible income categories compared with the same quarter in 2023.
Before the scheme, a family with a gross income of $95,000 spent 24.6% of their weekly disposable finances on childcare. After the introduction of the scheme, this dropped to 3.2%. A family with a gross income of $155,000 spent 16.9% of their weekly income on childcare in 2023, reducing to 4.2% in 2024. Families earning in excess of $500,000 a year saw little or no change.
