Childcare and inequality

Childcare is a major component of Australia’s education system. In 2022, over one million Australian households, around 11% of all households, had a child in childcare (ACCC 2023a).Footnote ² There is consensus that regular quality childcare can reduce inequality and be extremely beneficial for children, more especially for children from low-income families (Heckman Reference Heckman2011; Morgan Reference Morgan2019; Van Huizen and Plantenga Reference Van Huizen and Plantenga2018). Despite this consensus, in Australia, the children who are most likely to be developmentally vulnerable are also the ones least likely to attend childcare, and if they do attend, they attend intermittently (ACCC 2023a; Wong et al Reference Wong, Harrison, Whiteford and Rivalland2014). In 2020, 65% of 3-year-olds in Australia were enrolled in early education programmes compared to an average of 77% across OECD countries (OECD 2021).

The cost of childcare is a major stumbling block to attendance (Noble and Hurley Reference Noble and Hurley2021). Children in households with little economic capital are far less likely to attend childcare. A report by the Australian Competition and Consumer Commission (ACCC) concluded that despite the increase in the Child Care Subsidy in July 2023, ‘… the outcomes for children and households differ significantly depending on their income and circumstances’ (ACCC 2023a, 9). Historically, childcare in Australia has been expensive. In December 2022, an interim report by the ACCC found that on average, households were paying just under $124 per child per day for centre-based day care, and out-of-pocket expenses (after government subsidisation) were $48.60 (ACCC 2023b).

Calculating parental costs and contributions

The formula for calculating parental contributions for childcare is complex. Up until July 2023, if a household’s annual income was below $72,466,Footnote ³ a parent could claim 85% of costs. However, there was a rate cap of $11.77 per hour, and many centres were charging around $17 an hour. A 2021 survey of 1,700 parents found that 47% of respondents agreed that they ‘had to make significant financial sacrifices to afford ECC (Early Childhood Care)’ and 54% agreed that ‘high ECC costs are a barrier to some families having (more) children’ (The Front Project 2021). Various countries in Europe (France, Norway, Spain, and Germany) have universal and free ECC resulting in close to 100% enrolment for children aged between 3 and mandatory school age (Van Huizen and Plantenga Reference Van Huizen and Plantenga2018). In the OECD, Australia was ranked 26^th out of 32 countries with respect to the cost of childcare. Australian government expenditure in 2019 on early childhood education (0–5-year-olds) was 0.6% of GDP compared to the OECD average of 0.8% (ACCC 2023a, 185). Sweden, Iceland, Norway, Denmark, and France all spent more than 1.2% of their GDP on early childhood education, double Australia’s percentage expenditure (ACCC 2023a, 192). In 2022, for a couple on average wages with two children aged 2 and 3 in centre-based day care full-time, the ‘net childcare costs came to 16% of net household income’, whereas in the OECD the average was 9% (ACCC 2023a, 26).

A key plank of the Labor Party’sFootnote ⁴ electoral platform in the last federal election held in May 2022 (the Labor Party defeated the right-of-centre Coalition which had been in power since 2013) was a pledge to ‘reduce the cost of childcare and make it easier for mums [sic], children and working families to get ahead’ (Labor 2023). From 1 July 2023, the subsidy for childcare increased significantly. The subsidy is paid to the provider. A major limitation is that the subsidy is capped at the hourly rate of $12.74 (2022–2023 figures) for centre-based day care for children below school age. Anything above $12.74 is paid in full by the household, and there is no limit on what a provider can charge. Thus, despite the federal government’s endeavour to control the price of childcare and make it affordable, the ACCC report concluded,

The high cost of childcare is a major contributor to women choosing to forgo employment or to work part-time (Wood et al Reference Wood, Griffiths and Crowley2021). Interviews with different sections of the population asking them their impressions of the 2023 federal government budget are revealing. A nurse commented on how the cost of childcare for her two children means that she can only afford to work two days a week:

The activity test

Another contributor to inequality is that the number of hours of Child Care Subsidy a family is entitled to per fortnight is governed by an ‘activity test’. The activity test is calculated by measuring the ‘recognised activities’ of the parents. The focus is on the activity of the parent with the lowest activity hours. Activity can take a range of forms – paid work, study and training, volunteering, etc. Thus in a household where both parents work full-time (70 hours a fortnight), the subsidised hours they are entitled to will be substantial. However, in a household where one parent is employed for a minimal number of hours or is not employed and is not studying, the subsidised hours they are entitled to will be minimal.

Table 1. Activity levels and hours of subsidised care per fortnight ^*

* Source, Australian Government (2023a).

Table 1 shows the relationship between the number of activity hours and the number of subsidised hours a household is entitled to. Households where a parent has less than 8 hours of activity and earns below $80,000 annually are entitled to 24 hours of subsidised hours, whereas a household that has 48 hours or more of recognised activity is entitled to 100 hours of subsidised care.

Not surprisingly, households that work less hours and thus have lower activity test entitlements ‘tend to use a greater share of unsubsidised hours, leading to higher out-of-pocket expenses and potential affordability concerns’ (ACCC 2023a, 24). In 2022, households with 24 hours or less of entitlement (invariably these households would have little economic capital) were having to pay for more than 7 unsubsidised hours per week (28% of their hours), whilst those with 100 hours of entitlement were having to pay for 1.8 hours of unsubsidised care per week, 5% of their hours (ACCC 2023a, 181).

‘Childcare deserts’

The most privatised sector of Australia’s education system is childcare. Recent data indicate that about half of childcare providers are for profit, 35% are private but not for profit, and 11% are managed by state or local governments and 4% by non-government schools (Hurley et al Reference Hurley, Matthews and Pennicuik2022). The provision of childcare mainly by the for-profit sector has perverse outcomes. Private providers are able to decide where centres are located and what fees will be charged. It means that providers are far more likely to locate their centre in affluent areas where the economic capital of households means that they can charge high fees and lessen their risk and increase their profits (ACCC 2023a; Hurley et al Reference Hurley, Matthews and Pennicuik2022). The ACCC report on childcare concludes,

The result is that children from low-income families are more likely to live in areas designated ‘childcare deserts’. A childcare desert is defined as an area where there are more than three children per available childcare place. The first mapping of childcare in Australia concluded that 36.5% of children aged 0–4 live in areas that have been labelled ‘childcare deserts’ (Hurley et al Reference Hurley, Matthews and Pennicuik2022). In remote Australia where the economic capital of households is extremely low, 85.3% of the population live in a childcare desert. Indigenous Australians would be the dominant group in these remote areas. About a million Australians live in areas where there is no childcare. As would be expected, in childcare desert areas, female participation in the labour force is much lower (Hurley et al Reference Hurley, Matthews and Pennicuik2022).

The inequality in attendance in childcare contributes to the already sizeable gaps in the cultural capital of children from low-income families versus those from middle- and high-income families. As Nolan (2020, 520) concludes with respect to the potential impact of childcare attendance in Australia,

There is now consensus that there is a lasting and strong relationship between quality early childhood education and capacity and skills in later life. Currie and Rossin-Slater (Reference Currie and Rossin-Slater2015, 230) in their review of early childhood education for children from disadvantaged homes conclude,

Enrolments

Australia has one of the largest private school sectors in the OECD. Table 2 illustrates that over the last two decades, there has been a steady drift away from government schools to private schools. Thus, in 2000, 69% of students were in government schools, and by 2022, it was 64.5%.

Table 2. Student enrolments by school affiliation, Australia, 2000–2022 ^*

* Source: ABS (2023) Schools. Available at https://www.abs.gov.au/statistics/people/education/schools/latest-release

At present (end of 2023), around 30% of primary school students and 40% of secondary school students are in private schools. Funding of non-government schools by the federal government began in 1974. Initially, it was geared to subsidising the Catholic school sector, and funding was modest. However, this dynamic changed fundamentally when the right-of-centre Coalition government won the federal election in 1996. John Howard, the Prime Minister from 1996 to 2007, was determined to boost the private schooling sector, and he viewed his government’s extension of private schooling as ‘one of his greatest achievements’ (Gawenda Reference Gawenda2008). He commented that parents are choosing private schools because the government school is ‘too politically correct and too values neutral’ (Joseph Reference Joseph2018). In addition, he argued that parental choice was a fundamental premise of Liberal Party ideology and should be enhanced. In a speech in 2000, his education minister commented that the government’s policy was to use ‘the dynamics of consumer opportunity and provider competition to drive service quality’ and that ‘school choice means better educational opportunity’ (Connors Reference Connors2020).

Funding

The bulk of the funding for government schools, about 80%, is from the budget of state or territory governments,Footnote ⁵ and approximately 20% comes from the federal government. Private schools obtain funds from fees, the federal government, and the state government in which they are located and donations. In 2024, the federal government will provide $11.2 billionFootnote ⁶ to government schools, $9.8 billion to Catholic schools, and $8 billion to independent (private) schools (Australian Government 2023b). The national average government per student funding from state governments and the federal government in 2019 (latest figures available) was $14,766 for government schools, $12,672 for Catholic schools, and $10,326 for independent/private schools (ACARA 2021).

The Gonski review, resources, and funding

In 2010, in response to the realisation that the government schools were inadequately funded and the results of government school students were relatively poor, the federal government (the left-of-centre Labor Party was in power at that time) established the Gonski review. The focus of the review was on how high-quality equitable education could be provided for all school students regardless of socio-economic status or school attended. The review reported in 2013, and its primary conclusion was that a ‘national needs-based funding model’ was required to reduce the impact of social disadvantage and end inequity:

In a bizarre twist, the review panel was instructed that they could not take any funding away from a private school. In a scathing analysis of the impact of the Gonski review a decade on, Greenwell and Bonner (Reference Greenwell and Bonner2022, p. 267) conclude that a key reason for the limited impact of the Gonski review is the power of the private and religious school lobby: ‘The private school lobbies were able to wrap the demands of the rich within the shroud of legitimacy offered by the religious’. They succeeded in ensuring that there would be no cuts in government funding for private schools, however privileged and overfunded. A member of the Gonski review described this provision as the ‘albatross around the neck of the Gonski panel’ (Patty Reference Patty2014).

Inspired by the Gonski review that reported in 2012, government funding is premised on the ‘Schooling Resource Standard’ (SRS). The SRS, introduced in 2013, is an estimate of how much public funding a school requires to meet the needs of its students. The federal government ‘is providing at least 20% of each government school’s SRS and 80% of each non-government school’s SRS’ (Australian Government 2024). For government schools, the remaining 80% is supposed to be provided by the respective state or territory governments. In 2024, the SRS was calculated to be $13,557 for primary school students and $17,036 for secondary students. This is the base amount. There are also six equity loadings – there are SRS loading for disability, Aboriginal and Torres Strait Islander students, ‘socio-educational disadvantage’, low-English proficiency, school size, and school location. Each year, the Department of Education calculates the equity loadings for each school (Australian Government 2023c).

Although the state and territory governments are supposed to ensure that the government schools under their control are funded at 100% of the recommended amount, recent data indicate that government schools are being funded at around 91% of the recommended amount and private schools at 100% (Savage Reference Savage2023). In two states (South Australia and Western Australia) and the Australian Capital Territory, funding of government schools reached only 75% of the SRS in 2023 (Beazley and Cassidy Reference Beazley and Cassidy2023). According to the independent statutory authority, the Australian Curriculum, Assessment and Reporting Authority (ACARA) in 2023, 98% of private schools were funded above the SRS, and 98% of government schools were funded below the SRS ( Beazley and Cassidy Reference Beazley and Cassidy2023).

A report commissioned in 2022 by the Australian Education Union concluded that between 2018 and 2022, the federal government diverted more than $10 billion to private schools and excluded public schools from this largesse. Drawing on the SRS, the report concluded that the federal government ‘has been over-spending on private schools while public schools right across Australia are under-funded by approximately $6.5 billion each year’ (Rorris Reference Rorris2022, 8). An analysis by The Guardian newspaper drawing on parliamentary library data, established that ‘from 2012 to 2021 per student funding [by federal and state governments] to independent and Catholic schools rose by 34% and 31%, respectively, while funding to public schools increased by just 17% …’ (Beazley and Cassidy Reference Beazley and Cassidy2023).

At the federal level, it is evident that when the right-of-centre Coalition government is in power, there is an avid endeavour to strengthen the position of the private schools (Rorris, Reference Rorris2023). In their first budget after winning the federal election and regaining power in 2013, the Coalition government scrapped a significant increase in school funding envisaged by the Gonski review. Most of the increase would have gone to the government schools. Towards the end of 2018, the Coalition government was accused of creating a slush fund for private and Catholic schools. On top of a $3.4 billion seemingly arbitrary cash injection, another $1.2 billion was allocated directly to Catholic and independent school authorities to distribute as they saw fit. The decision was heavily criticised even by ministers in Coalition controlled state governments. Rob Stokes, the then Minister for Education in New South Wales (NSW), where the Liberal Party was in power in a Coalition government (Labor regained power in NSW in March 2023), commented,

Overall, it would seem that the Gonski review’s impact has been limited. Greenwell and Bonner (Reference Greenwell and Bonner2022, 264) conclude that the review ‘left intact the unlevel playing field on which our schools operate and even exacerbated the existing incongruities and injustices’. The inequality in government funding means that those households with limited economic capital will usually be reliant on the government school in their area and the cultural capital of students resident in low socioeconomic status (SES) areas could be stymied by the limited resources and subject offering of their local school. Perry (Reference Perry2018, 62) drawing on OECD data observes that with respect to subject offerings,

Inequality in results

There is a substantial gap in the retention rates (retention rate refers to students completing 13 years of schooling) of government versus non-government schools. Table 3 indicates that the retention rate in the independent or private schools increased from 90.5% in 2016 to 94.2% in 2022; however, the retention rate during the same period for government schools dropped from 82.5% to 76% (ABS 2023). The reasons for the substantial drop in the retention rate in government schools are unclear.

Table 3. Year 7/8 to year 12 full-time apparent retention rates by school affiliation, Australia, 2012–2022 ^*

* Source: ABS (2023) Schools. Available at https://www.abs.gov.au/statistics/people/education/schools/latest-release

Parents who have the requisite economic capital are able to send their children to well-resourced private schools. The cultural capital of parents is also important. The cultural capital of parents is important. Drawing on data from the Longitudinal Study of Australian Children (LSAC),Footnote ⁷ Hancock (Reference Hancock2018, 48) found that ‘children who had both a mother and father with a university qualification substantially out-performed peers whose parents had no such qualifications’.

Another concern is the relatively poor formal education qualifications of Indigenous students; ‘The secondary school completion gap between Indigenous and non-Indigenous students is more than 40 per cent’ (Perry Reference Perry2018, 61). In 2021, only 48% of Indigenous Australians aged 20–64 had completed a non-school qualification or were studying for one compared to 71% of non-Indigenous Australians. Only 10% of Indigenous Australians had a bachelor’s degree or above compared to 35% of non-Indigenous Australians (Australian Government AIHW 2023).

The National Assessment Program, Literacy and Numeracy (NAPLAN) tests and inequality

Since 2008, schools throughout Australia have been required to conduct NAPLAN tests in years 3, 5, 7, and 9. The test assesses skills in three areas – reading, writing, and numeracy. The results suggest that the economic and cultural capital of the homes of students play a major role in shaping performance. A consistent finding is that children from low-income households do worse than children from middle- and upper-income homes (O’Brien et al Reference O’Brien, Paul, Anderson, Hunter, Lamb and Sahlberg2023; Smith et al Reference Smith, Parr and Muhidin2018). With respect to class origins, ‘the “learning gap” between students from low socio-educational status compared to their high socio-educational status peers has risen from 1.4 years in 2008 to 2.3 years in 2022 for Year 3 reading’ (O’Brien et al Reference O’Brien, Paul, Anderson, Hunter, Lamb and Sahlberg2023). Linked to the class dimension is spatial clustering. Students in schools in advantaged areas generally outperform students in schools located in disadvantaged areas (Smith et al Reference Smith, Parr and Muhidin2018).

The cultural capital of parents is an important factor. An analysis of the 2022 NAPLAN results established that in year 3, students from low-income households whose parents did not finish school were two years and five months behind in reading. By year 9, the gap had increased to more than five years (Hunter Reference Hunter2023). In numeracy, the gap in year 9 was four years and nine months (Visentin Reference Visentin2021).

There is a substantial gap between Indigenous and non-Indigenous students. Whereas nationally less than 5% of students did not meet the minimum standard for reading and numeracy, in the Northern Territory which has a substantial Indigenous population, over 20% of younger students did not meet the national minimum (OECD 2023). It has been estimated that Indigenous students in year 3 are about ten times more likely to not reach the national minimum standard (OECD 2023). Only about one-third of Aboriginal and Torres Strait children commenced school developmentally on track (OECD 2023).

The Program for International Student Assessment (PISA) test

Every three years, the PISA test is held to test the capacities of 15-year-olds globally. Although Australian students are performing at or above the OECD average, the trends are concerning. Since first participating in 2000, there have been steady declines in reading, science, and mathematics (OECD 2023c). Another concern is that there are substantial gaps between the least and most proficient 15-year-olds. An OECD report on PISA results in Australia concludes,

Again the cultural and economic capital of the homes of students appear to be significant factors. One of the authors of the Australian PISA report noted that

Results of schools in regional, rural, and remote areas

About 45% of Australian schools are in regional, rural, or remote areas. The location of a school in Australia plays a central role in determining the availability of qualified teachers, the amenities available, and ultimately the results of students (Perry Reference Perry2018). The Dean of Education at the University of Melbourne summed up the links between the location of schools and inequality:

The proportion of students completing year 12 (the final year of school) in major cities in NSW was 78% compared to 43% in very remote areas (NSW Department of Education 2022). Other concerns noted in a recent NSW state government report were the inequities in the provision of adequate internet connections and hardware for online learning, inadequate access to support services, lack of preschool access especially in remote areas, and lack of qualified teachers (NSW Department of Education 2022).

Economic and social capital and the perpetuation of class power

The fees demanded by these schools necessarily mean that most of the students come from homes with substantial economic capital. An analysis of the top 20 private schools in Sydney and Melbourne concluded,

Social capital is an important part of the attraction of elite private schools. An article in the Sydney daily broadsheet, The Sydney Morning Herald, titled, ‘Ties that bind: The private girls’ schools producing Sydney’s A-list’, summed up the significance of the social connections that these schools facilitate and reinforce:

An example of the way these schools reproduce class domination is St Peters College (boys only) in Adelaide, the capital of South Australia. Its alumni include eight South Australian premiers, a NSW premier, and a Western Australian premier, plus a plethora of eminent business and legal people (Seccombe Reference Seccombe2021). An ex-student commented that the students who attended St Peters College perceived that they were ‘the children of gods and we would inherit the universe’ (Seccombe Reference Seccombe2021). An analysis of the federal government cabinet (2016–2019) is revealing; half of the cabinet went to elite private schools (Seccombe Reference Seccombe2021).

Facilities

The elite private schools have the capacity to provide exceptional facilities. Besides the revenue generated from fees, they are also able to attract substantial donations from parents and alumni. Between 2016 and 2021, the top 20 private schools in Sydney garnered $340 million in donations from parents and alumni. The Scots College (fees in 2023, $44,600) in Sydney received $53 million in donations in this period (Carroll and Gladstone Reference Carroll and Gladstone2023). One estimate is that between 2013 and 2017, the 4 richest private schools in Australia spent more on new facilities than the poorest 1,800 government schools (Hare Reference Hare2022). A member of the Gonski review panel commented that the amount private schools obtain from the government is so substantial that it covers recurrent expenditure. The result was that fees could be used to spend on facilities such as,

Examples of outlandish expenditure abound. In 2019, construction started on a student centre at Scots College in Sydney modelled on a Scottish baronial castle. The building is expected to cost around $80 million; the initial quote was $29 million. Apparently ‘acquiring sandstone and slates from Scotland’ contributed to the enormous cost (Napier-Raman and Towell Reference Napier-Raman and Towell2023). The building involved demolishing a part of the library built in 1988 and adding a fifth storey.

Cranbrook, another elite boys school (it will be coeducational from 2026), situated about 500 metres from Scots College in one of the wealthiest suburbs in Australia, recently completed building works that cost $125 million. The building works include a 267-seat theatre, an Olympic-size swimming pool, a double-height orchestra room, a 1,600-seat assembly hall, and a gymnasium. The school’s council president commented, ‘We had a 25-metre pool that wasn’t very good for water polo. So we decided to build a proper pool and learn-to-swim school [sic]’ (Carroll Reference Carroll2022).

The president of the teachers’ union, the NSW Teachers Federation, commented that whilst private schools spent huge amounts on ‘obscene building projects’, public school students were in ‘demountables and in overcrowded schools that are in desperate need of refurbishment’ (Carroll Reference Carroll2022).

Attraction and retention of best teachers

The high fees give these schools the capacity to attract the best teachers. These teachers would have the cultural capital to ensure that their teaching is of the highest standard. The chair of the ‘Council of Governors’ of Ascham, an exclusive girls-only school in Sydney, in a letter to parents justifying the increase in fees by 4% to $42,550 in 2023, stated,

She went on to state that Ascham will be unveiling plans ‘for the transformation of buildings and spaces across our campus to further enhance our girls’ opportunities to flourish’ (Carroll and Harris Reference Carroll and Harris2023).

Kambala in Sydney is the most expensive school in Australia. In 2024, the parents of students in years 9 or 10 will pay $51,385 a year comprising $45,200 in fees and a compulsory levy of $6,185 (Harris Reference Harris2024). Based on the present fee structure, the cost of educating a child at Kambala from preparation to year 12, is $587,925. The principal wrote to parents at the beginning of 2023, to inform them that the school would be hiring a researcher from the Harvard Graduate School of Education who will be the school’s ‘academic in residence’ and will work with teachers ‘over the next three years to ensure we deliver academic excellence to our girls’ (Carroll and Harris Reference Carroll and Harris2023).

It is evident that the capacity to attract and retain the best teachers by offering higher salaries and better working conditions is a major factor in heightening inequality between the private and government schools. Research has indicated that a substantial proportion of teachers in government schools are highly stressed and thinking of leaving the profession (Heffernan et al Reference Heffernan, Bright, Kim, Longmuir and Magyar2022; O’Brien et al Reference O’Brien, Paul, Anderson, Hunter, Lamb and Sahlberg2023). A survey of 2,444 teachers in government schools revealed that only 41% of respondents intended to remain in the profession. Crucial factors shaping their desire to leave were ‘overwhelming workloads’ and the impact of the job on their health. Other factors included ‘a sense of a lack of appreciation or poor treatment of teachers … working conditions and … the rising complexity of teachers’ work and increased scope of teachers’ responsibilities’ (Heffernan et al Reference Heffernan, Bright, Kim, Longmuir and Magyar2022, 200). In March 2024, it emerged that the principal of Cranbrook was being paid more than $1 million a year, about double the salary of the Prime Minister and more than five times the salary of government school principals (Carroll and Harris Reference Carroll and Harris2024).

Who goes to university?

Per capita, the university system in Australia is one of the largest globally. There are 41 universities (37 are public and 4 are private), and in 2021, there were 1,602,573 students enrolled of which 1,162,260 were domestic students and 440,309 were international students (Australian Government 2022). About 44.6% of 25–34-year-olds in Australia had a bachelor’s degree or higher in 2022, up from 12.3% in 1989 (Australian Universities Accord 2023). There are major spatial differences. In 2021, whereas 48.6% of people aged 25–34 years old in major cities had a bachelor’s degree or higher, the proportion fell to 26.9% in inner regional areas, 21.1% in outer regional areas, and 16.6% in remote and very remote areas (ABS 2021).Footnote ⁸

From 2010, there was a substantial expansion in student numbers with the introduction of the ‘demand driven system’. The policy was designed to increase the access of ‘underrepresented groups’ by expanding the number of university places available (Productivity Commission 2019). It had some impact; the proportion of people under the age of 22 years who attended university increased from 53% to 60% between 2010 and 2016. However, cultural and economic capital continued to play a role in determining participation. A government research body concluded:

The proportion of students attending university from low SES has hardly shifted over the last decade. In 2008, about 15% of all undergraduates were from low-SES homes, and in 2022, 17% were (Clare Reference Clare2022). The Australian Universities Accord, which has been set up by the federal government to comprehensively review higher education concluded in its interim report (July 2023) that ‘education participation rates for low SES and regional, rural, and remote students have gone backwards since 2016 [and that] First Nations participation has increased but remains around 40% below population parity’ (Australian Universities Accord 2023, 32). In 2019, for the first time, Indigenous students accounted for 2% of all domestic undergraduate enrolments, up from 1.6% in 2014 (Koshy Reference Koshy2020).

The class origin of students (economic capital) combined with their schooling and parental qualifications (cultural capital) are crucial determinants of whether students go on to university. Marginson (Reference Marginson2015) concluded that in Australia, a student was 4.3 times more likely to go on to higher education if one of their parents has a degree. Children of tertiary educated parents are also more likely to attend a Group of Eight university. Those top eight universities collectively known as the Group of Eight have a much lower proportion of students from low-income homes than do less prestigious universities (Australian Universities Accord 2023; Parker Reference Parker2016).

A student’s spatial location is also a crucial factor. This generally overlaps with class origins. People from regional, remote, rural, and outer suburban areas can find accessing higher education challenging. The group most affected by spatial location are First Nations people in remote areas. The Universities Review Accord’s interim report drawing on submissions, heard

Other factors include poor high school results and financial impediments (Ferguson Reference Ferguson2022).

The cost of university and inequality

A key factor shaping the decision to go to university is the high cost. In 1974, the Labor government scrapped university fees. Thousands of students from low-income households were, for the first time, able to attend university, and for many, it was life-changing (Black 2023). Free university tuition was abolished in 1989 and replaced by the Higher Education Contribution Scheme (HECS). In 2005, HECS was renamed the Higher Education Loan Program (HELP). HELP allows students to enter university without them having to pay any tuition fees upfront. The students only start paying back when they enter the labour force and earn above a certain amount. No interest is charged on a HELP debt; however, each year, the debt is indexed to inflation. In June 2023, students’ HELP debt increased by 7.1%, in line with inflation. In 2023, the approximately 3 million Australians with HELP debts owed around $74 billion, and the average debt was $24,800 (Ey Reference Ey2023).

Although HELP certainly allows students from low-income households to contemplate accessing university, it has limitations. Many potential students from families with limited economic capital are daunted by the overall cost of a university degree and the knowledge that they will have to pay back the loan when they start working (Precel Reference Precel2023). This is especially so in the present context due to the high cost of university degrees and the cost-of-living crisis. Besides fees, students usually have to pay for their everyday expenses. Scholarships that cover living expenses are rare. This is a major issue for students who have to relocate and rent private accommodation. Many Indigenous students have to move from remote areas.

The financial assistance available from the government for everyday expenses is paltry. Students from remote and regional areas can apply for a ‘Tertiary Access Payment’ of between $3,000 and $5,000 a year. Students from low-income families would need to work a substantial number of hours to cover their living expenses. There are government scholarships specifically for Indigenous students. The maximum amount, $9,000 per annum, would not cover all expenses. Most of the universities do have generous scholarships for Indigenous students, but students have to apply, and only a proportion of applicants are successful.

The Job-ready Graduates (JRG) package

The debt that a student accrues depends on the degree programme chosen. In 2023, student contributions (fees) ranged from $4,124 to $15,142 a year. Historically, the fees charged were guided roughly by earning prospects after graduation. Thus, in 2020, law and medical students were charged $11,115 a year and humanities students $6,684. At the beginning of 2021, the conservative Coalition government put in place the controversial ‘Job-ready Graduates (JRG) package’. JRG was premised on making courses deemed less worthy with respect to the job market more expensive, whilst degrees whose graduates it was presumed would fill job shortages were made cheaper. Fees for humanities and social science degrees have more than doubled increasing from $6,684 a year in 2020 to $16,323 in 2024.Footnote ⁹ In contrast, the cost of courses in science and engineering dropped from $9,527 a year in 2020 to $8,948 in 2024. The fees for teaching and nursing degrees were cut from $6,684 in 2020 to $4,455 in 2024 (Norton Reference Norton2020; Australian Government, 2023d). A student starting a three-year humanities degree in 2024 will have a HELP debt of $48,969 ($16,323 per annum) when they graduate presuming they finish in three years. A law student will have a HELP debt of $81,615 presuming they complete their degree in five years – the minimum time possible.

A major issue with the JRG scheme is that many students from low-income families would be eligible for a humanities or social sciences degree, but their final school marks would not give them access to many other courses. However, the enormous cost of an arts/social science degree could discourage them from attending university. Alternatively, they may choose to do courses because of their lower cost rather than what they are interested in. The interim report of the Australian Universities Accord noted the inequity implications of the JRG scheme concluding, ‘It is clear the funding system, as changed through the JRG  package, needs to be redesigned before it causes long-term and entrenched damage to Australian higher education’ (Australian Universities Accord 2023, 22). The report noted that First Nations and female students were more likely to bear the brunt of the JRG policy. At the time of writing, it was almost certain that the JRG package would be scrapped, but it was unclear what fee structure would replace it.

Penalising students who fail

In 2020, the federal government introduced a policy that penalised students financially who failed to pass at least half of their courses in their first year. In these instances, the university is required to withdraw ‘Commonwealth funding’ (the government subsidy) from the student making the remaining courses extremely expensive; students have to pay the full cost of their remaining courses. A government report released in 2023 estimated that around 13,000 students have been affected by this ruling and that the ‘rule disproportionately affected students from First Nations backgrounds, low socioeconomic status, and other underrepresented or educationally disadvantaged cohorts’ (Australian Government 2023d, 4). The vice-chancellor of the Australian National University in a letter to the Department of Education, Skills and Employment expressed grave reservations, concluding that the policy would have the biggest impact burden on

The federal government now under Labor control has agreed to abolish the 50% rule from the beginning of 2024.

Attrition and inequality

In 2020, 16% of low SES commencing bachelor students left university without completing their course, as did 14% of medium SES students and 9% of high SES students (Australian Universities Accord, 2023). Students fail to complete for a range of interrelated reasons (Edwards and McMillan Reference Edwards and McMillan2015; Li and Carroll Reference Li and Carroll2020). Students from low-income families who are the first member of their family to attend university are more at risk of not completing as are students from regional areas and students who study part-time. These students will often enter university with a low Australian Tertiary Admission Rank (ATAR). The ATAR is the number between 0 and 99.95 that indicates a student’s position relative to other students that completed the same final year of school. Every university course will have a minimum ATAR score that a student has to attain in order to access the course in question. The more in demand the course, the higher the ATAR requirement. A low ATAR is a key predictor. Students with an ATAR between 0 and 60 were three times more likely to drop out of university than were students with an ATAR between 80 and 99.95 (Joseph Reference Joseph2023).

Noteworthy is that students who are part-time are more likely to not complete their degrees. Students who do six or more subjects a year (full-time students) have a 20% chance of not completing, students who do three to four subjects have an even chance of dropping out, and students who do two or few subjects have a 60% chance (Norton et al Reference Norton, Cherastidtham and Mackey2018). Many part-time students are part-time because they need to work a substantial number of hours a week and/or have family responsibilities (Edwards and McMillan Reference Edwards and McMillan2015; Norton et al Reference Norton, Cherastidtham and Mackey2018). It does appear that the increase in the cost of living in 2022–23 has had a significant impact on many students, more especially students from low-income families. The president of the National Union of Students commented, ‘We have heard from a lot of students that they have been affected, they have been forced to drop subjects because it’s too hard to match a full-time degree with full-time work’ and that cost-of-living pressures had led to some students withdrawing from study entirely (Carey Reference Carey2023).

The students who accessed university after the ‘demand driven system’ was put in place had mixed results. Although a proportion of these students thrived, a substantial proportion struggled and did not complete. An analysis of these students found

Unfortunately, First Nations students have a much higher drop-out rate than non-Indigenous students (Norton et al Reference Norton, Cherastidtham and Mackey2018; Productivity Commission 2019). It is likely that the schooling that many First Nations students’ experience is less likely to equip them with the cultural capital required for university. Also, many would be the first member of their family to attend university, have a low ATAR, and would have to work to support themselves.