Letter of Transmission

1. The Secretary's review 1999-2000

2. The Department

3. A summary of the Department's roles and the new reporting framework

4. Analysis of performance for Outcome 1

5. Analysis of performance for Outcome 2

6. Analysis of performance for Outcome 3

7. People management

8. Management and accountability

9. External scrutiny and legal matters affecting the Department

A1. Staffing statistics

A2. Occupational health and safety

A3. Freedom of information

A4. Payments to advertising and market research organisations

A5. Consultancies

A6. Performance against actual results against outcomes and outputs

A7. Financial statements

A8. The Higher Education Contribution Scheme

A9. Discretionary grants

A10. Glossary and acronyms

Contents | Previous | Next  

Section 1. Education in Australia  
Section 2. Trends
Section 3. The outcomes outputs reporting framework  
Section 4. How we measure our achievements against outcomes

Regular readers of the Department’s Annual Reports will note major changes to the structure and content of the 1999-2000 Annual Report. This is the result of a change in reporting requirements. Previously we reported against programmes. The Department now reports against outcomes and outputs. Section three of this Chapter provides a description of the outcome - output reporting framework.

This chapter provides context to help readers understand this change before moving on to detailed outcome - output reporting. It looks at the education and training system in Australia, then at broad trends in the system. Following this is an explanation of the new reporting framework and finally a list of the performance indicators we use.

Section 1. Education in Australia

The Australian education and training system

There are three sectors in the Australian education and training system. They are:

1. Schools, including pre-schools, primary schools, secondary and senior secondary schools;
2. Vocational Education and Training, which involves publicly owned TAFE institutions, private provider colleges, community facilities, schools and workplaces all over Australia; and
3. Higher Education, the universities of Australia.

Commonwealth - State roles and responsibilities

Many of the outputs and performance indicators measured in this Annual Report are influenced not only by the actions of the Education, Training and Youth Affairs Portfolio, but also by other parties. For instance, decisions taken by State and Territory Governments affect schools and vocational education and training.

In addition, the employment prospects of tertiary education graduates will depend heavily on prevailing economic and labour market conditions as well as the job readiness of individuals.

Therefore to measure performance against the indicators in this document, readers should consider the contributions of all the different parties concerned.

While the Commonwealth takes a leadership role in all education sectors, its role and that of other stakeholders varies within each sector.

Schools

There are more than 3 million students in just over nine and a half thousand primary and secondary schools in Australia’s eight States and Territories.

Both government and non-government schools are available to students. State and Territory Governments have the major financial responsibility for government school education, as they are required to provide schooling to all children of school age. They also contribute funds for non-government schools.

The non-government sector is substantial. Approximately 30 per cent of students attend non-government schools. Most of these schools have some religious affiliation, most commonly with the Catholic Church. Approximately two thirds of non-government students are enrolled in Catholic schools.

State or Territory Ministers, their departments, and statutory authorities decide school policies, curriculum and so on. Non-government schools often make decisions for themselves. The States and Territories have also developed equity policies and programmes intended to provide quality schooling to all students, irrespective of their social background or geographic location.

The Commonwealth’s policies and programmes for schools and students are administered through this Department. The Commonwealth provides significant additional funding to State, Territory and non-government school authorities to support agreed priorities and strategies.

Roles shared with State, Territory and non-government school authorities include the identification of national standards and priorities for schooling, the promotion of national consistency and coherence and the identification of strategies to achieve these aims.

Vocational education and training

Australia has an industry-led vocational education and training system. All stakeholders acknowledge that the system must prepare Australians for work and help them increase their competence once they have jobs. Some Australian businesses make an enormous contribution to training from their own resources. The challenge to industry is to learn to manage skills and learning as a critical corporate investment rather than as an optional expense. The challenge for the Australian system is to position the education and training offered as the preferred choice for organisations looking for quality, relevant training.

Responsibility for vocational education and training in Australia is shared between the Commonwealth, the States and Territories and industry. The States and Territories have primary responsibility for this sector as they provide two-thirds of the funding and have all the regulatory responsibility. They also own the network of public TAFE institutions. The Commonwealth contributes funds for this sector and has a shared responsibility with the States and Territories in policy making.

The Commonwealth’s role in policy and programmes tends to focus on the promotion of high quality outcomes for students, national consistency and coherence and the development of a system which is responsive to industry needs. The Australian National Training Authority Ministerial Council is the main vehicle for dialogue between the Commonwealth and the States and Territories on these issues.

Higher education

An agreement endorsed by the Council of Australian Governments describes the public higher education system as an area of shared responsibility. Although the Commonwealth Government does not have constitutional power over higher education, it has the primary funding and policy-making responsibility. The States and Territories are responsible for legislation relating to the establishment of universities and accreditation of the higher education courses of private providers.

This agreement also created the Joint Committee on Higher Education. It is a forum for multi-lateral consultation between the Commonwealth and the States and Territories and reports to the Ministerial Council on Education, Employment, Training and Youth Affairs.

Commonwealth-State and Territory Joint Planning Committees consider matters such as State and Territory-specific higher education needs and distribution of higher education resources among the publicly funded institutions.

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Section 2. Trends

This section provides a brief overview of educational participation and the destination of students. More detailed information is reported against each outcome in Chapters 4, 5 and 6 .

Broad trends in education and training

The last twenty years has seen a dramatic rise in participation in post-compulsory education. This is the result of a number of factors. For instance, changes have occurred in social attitudes to education. Government policies have also changed to promote participation in education and the expansion of tertiary education. In addition, the recessions of the early 80s and early 90s led to significant losses of teenage full-time jobs which encouraged many people to stay within the education system.

The expansion of educational opportunities has been such that access to some form of post-secondary education or training is now almost universal. Today, a young person has almost a 90 per cent chance of undertaking post-secondary education at some point in their lifetime.

This means there has been rapid growth in the supply of more highly qualified workers. Unemployment rates for these educated workers remain low compared to those without post-school qualifications.

Table 1 clearly shows participation in education and training increasing.

Table 1. Participation in education and training by sector (%)

Sources: ABS, Schools, 4221.0, Everingham (1999), Education Participation Rates, Australia-1997, Canberra NCVER, Australian Vocational Education and Training Statistics, 1998.

In addition, this trend of increasing participation in education and training is particularly notable in the proportion of 19 to 22 year olds either completing school or with post-school qualifications.

Broad trends for each sector

Significant changes have occurred in all three education sectors: schools; vocational education and training and higher education.

Schools

The most important change in schooling has been the rise in the proportion of young people undertaking a full secondary education. This retention rate has been higher for females than for males for most of the 80s and 90s. One factor influencing this is that more teenage males than females leave school before Year 12. Many leave to undertake learning in work-based or non-school settings such as apprenticeships or TAFE qualifications.

Indigenous Australians continue to show a lower rate of participation and retention to Year 12 than non-Indigenous Australians.

Vocational education and training

While participation in the vocational education and training sector has increased slightly over the 80s and 90s, it has declined slightly for teenagers. Increased participation in senior secondary school seems to have delayed entry to vocational education and training for some students.

For some time, approximately half of students taking vocational education and training have been 25 and over and that proportion is increasing. This sector has traditionally provided both a ‘second chance’ and additional training for older Australians.

Higher education

Higher education has become a truly mass form of education in Australia. A young person today has a 45 per cent chance of entering higher education at some point in their life and a 35 per cent chance of entering higher education by age 25.

Participation rates have been higher for females than for males across all age groups over the last twenty years. This gender gap appears to be widening. Part of the explanation is the higher retention to Year 12 among females, given that successful completion of Year 12 is an important gateway to higher education.

The path from education to work

For many young people, the move to full-time employment has been deferred to accommodate longer periods of study. For instance, at the start of the 80s, an average young person could expect to spend 64 months in full-time employment between ages 15 and 24. In the late 90s this had declined to 43 months. However, a significant number of teenagers combine schooling and other education or training with part-time work.

Teenagers who take up full-time employment also tend to keep studying. There has been an increase in the proportion of full-time jobs involving a combination of work and study. Nearly half the teenagers in full-time employment in May 1999 were employed under a New Apprenticeship.

Most young people successfully make the transition to stable employment. A minority do not. Work by the Australian Council for Educational Research using longitudinal data indicates that, for people leaving school in the late 80s, five per cent were mainly employed part-time and seven per cent were mainly unemployed for the first seven years out of school.

The consequences of increasing participation trends in education

The increase in the supply of individuals with higher level qualifications has been accompanied by an increase in demand for more highly qualified people. Unemployment rates for degree holders have remained consistently lower than for people with other qualifications. This relative advantage for degree holders has increased through the 90s. Salaries for degree holders and people with vocational education and training qualifications have also remained higher than salaries for people without these qualifications.

Employment has evolved to accommodate an increasingly qualified labour force. This evolution has been particularly favourable to those possessing higher education qualifications. However, there is some evidence that more recently, degree holders have begun to enter a wider range of occupations and that the level of salaries received by younger degree holders has become more variable.

Indigenous education

Despite some progress over recent years, Indigenous Australians show markedly lower levels of literacy and numeracy at primary school, have far higher rates of absenteeism and truancy, are much less likely to continue their education beyond compulsory years and are less likely to achieve a meaningful post-school qualification.

The Commonwealth has adopted a strategy to help close the educational gap between Indigenous and non-Indigenous Australians by 2004. The strategy builds on a high level of State and Territory Ministerial commitment, reflected in the adoption by all Ministers for education of a strengthened focus on outcomes reporting which has effectively increased providers’ accountability for their performance. In some cases it has caused providers to reassess their priorities for Indigenous students.

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Section 3. The outcomes - outputs reporting framework

Overview

The broad trends just discussed will be examined in more detail in later chapters on specific outcomes. This section explains the outcomes - outputs framework and the use of indicators.

The essential purpose of the outcomes and outputs framework is to answer three questions:

1. what does the Government want to achieve? (these are the outcomes);
2. how does it want to reach those achievements? (these are the outputs); and
3. how does it know if it is succeeding? (these are the indicators).

Managing through outcomes and outputs can help improve management decision making and performance by focussing attention on these fundamental questions. It can also help improve the understanding and knowledge of those outside the agency who have an interest in its performance.

Government, through its Ministers and with the assistance of relevant agencies, specifies the outcomes it is seeking to achieve in a given policy area. These outcomes specify the impact government is aiming to have on some aspect of society or the national interest. Parliament supplies funds to allow the government to achieve these outcomes. These funds in turn allow government to ‘buy’ outputs from agencies. Agencies specify the outputs they undertake to provide to help achieve these outcomes, including through third parties. Indicators are developed to allow scrutiny of effectiveness and performance.

This is the first year the Department has reported against outcomes and outputs. Previously we reported against our departmental programmes. In 1998-1999 the programme structure looked like this

Charts 3, 4 and 5 show the relationship between each of the new outcomes and the old programme structure.

Outcome 1

School systems provide their students with high quality foundation skills and learning outcomes.

Chart 3. Relationship between outputs and programmes for Outcome 1

Outcome 2

Post-school education and training providers assist individuals achieve relevant skills and learning outcomes for work and life.

Chart 4. Relationship between outputs and programmes for Outcome 2

Outcome 3

Australian institutions advance the knowledge base, contribute to the national innovation system and participate effectively in the global development of knowledge and skills.

Chart 5. Relationship between outputs and programmes for Outcome 3

The difference between Departmental Outputs and Administered Items

The Portfolio’s financial resources are split into two separate categories, Departmental and Administered. Departmental Outputs and Administered Items are reported on separately, due to the different nature of accountability resulting from the varying degrees of control the Department has over the transactions. You will find detailed reporting on these items in Appendix 6.

Departmental Outputs are those assets, liabilities, revenues and expenses controlled by the Department and used to provide its goods and services, and therefore outputs to Government. Administered Items are those resources administered by the Department on behalf of the Government and may include transfer payments to the States and Territories, grants and other benefits that contribute to achieving the Government’s specified outcome. The Department does not control Administered Items.

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Section 4. How we measure our achievements against outcomes

Introduction

Outcome 1 relates to schools, Outcome 2 to post-school education and training and Outcome 3 to research and international education.

Achievements for each of these outcomes are measured against a number of performance indicators and a set of strategic priorities specific to that outcome.

The performance information covers:

• the overall effectiveness in achieving the outcome;
• the performance of third parties that deliver outputs on behalf of the Government that are funded from Administered Items; and
• Departmental Outputs to support the Outcome, categorised against Administration, Policy Advice, Ministerial and Parliamentary Services, Research, Analysis and Evaluation and Service Delivery.

Wherever possible, performance information is delivered with trend data so that current performance can be measured against historical performance.

Selection of performance indicators

This Annual Report closes the loop on the first budget cycle using the outcome - output framework.

In the Second Report on the Format of the Portfolio Budget Statements, the Senate Finance and Public Administration Legislation Committee acknowledged that 1999-2000 performance indicators across the public service were, in many instances, "a best effort at the time and would be reassessed in terms of their appropriateness and measurability in the light of experience".

The Committee also commented on "the evolving nature of both the reporting frameworks and the information provided in financial tables". It recommended across-the-board performance information audits developed by the Australian National Audit Office and will address performance information in the light of the full reporting cycle.

The Department has developed its initial performance information based on the data available at the time. A certain degree of estimation, particularly in relation to the attribution of departmental expenses to the outcome - output framework, has been necessary. Also, in some cases, there are time lags in the collection of data by other parties. This can mean that the latest available data relate to one or two years before.

The Portfolio is committed to continuous improvement of its existing indicators, looking to develop changes to make them even more meaningful, transparent and reliable. This will include indicators that allow reporting on trend and historical data and the refinement of targets and benchmarks. Broadly, however, many of the indicators used can be compared usefully with similar international indicators.

As discussed earlier in this chapter, the Commonwealth is one of several significant players that take shared responsibility for administering the education and training sector in Australia. Outcomes in schools education and vocational education and training are determined by decisions taken at the State and Territory level as well as decisions agreed at a national level. In addition, participation in education and training and the employment prospects of tertiary education graduates will depend significantly on the prevailing economic and labour market conditions. This should be considered when interpreting progress against the indicators presented here, along with the need to weigh the respective contributions of different parties to the achievement of any given outcome.

Detailed information follows

This chapter has provided a broad overview of the department, trends in education and the new outcomes - outputs reporting framework.

Detailed reporting and analysis of performance indicators for each of the Department’s three Outcomes can be found in the next three chapters.