In the forthcoming Association Extra General Meeting (EGM on 20 October) we will present the draft budget for 2023 and hope to explain some of the complexities of what makes MECS a financially viable and sustainable school. One key issue that all parents are keenly interested in is: What are the school fees for next year?
Here’s the 2023 fee schedule that the Board approved at its meeting on Tuesday.
|Three year old kinder||Free|
|Four year old kinder||Free|
|Primary school 1st child||$6,820|
|Primary school 2nd child||$5,115||75% of 1st primary|
|Primary school 3rd child||$4,092||60% of 1st primary|
|Primary school 4th child||$4,092||60% of 1st primary|
|Middle School 1st child||$9,000|
|Middle school 2nd child||$6,750||75% of 1st middle|
|Middle School 3rd child||$5,400||60% of 1st middle|
|Senior School 1st child||$10,100|
|Senior School 2nd child||$7,575||75% of 1st senior|
|Senior School 3rd child||$6,060||60% of 1st senior|
|Maximum fees per family||$19,000|
Discounts: 3% If all fees paid by the end of February
1.5% if half fees paid by end February and half fees paid by end of July
The fees shown in the table have risen 4% above the 2022 fees. It is an uncomfortable reality that this is a greater rise than has occurred in recent years. It was easy to understand in previous years that lower increases were sustainable when the Consumer Price Index (CPI) was low, but with inflation up over 6% the challenging reality is that fees need to increase to keep pace with costs. Thankfully, we have been able to keep the increase somewhat lower than CPI. I want to share a few of our considerations when setting fees.
Education cost increases are lower than CPI
Whilst the CPI rate is high, school business managers and education departments also use a Bureau of Statistics measure called the Education Price Index (EPI). Often this is above the CPI rate. However, in the year up to June 2022 the EPI was 4.7%. This indicates that at least some of our costs have not increased quite as much as the CPI.
Fees at other local independent schools
A look at the fee rates of other local independent schools will show that the MECS fees are still relatively affordable. It would be convenient if we could do a simple comparison of fees between schools but it’s not quite ‘apples and apples’. Scholarships at other schools; discounts for 2nd and 3rd children and the family fee ceiling here at MECS don’t always lead to easy comparisons. Also, MECS works very hard at our ‘one fee, pays all’ approach. We don’t want to advertise one fee rate and then later ‘load on’ a whole lot of ‘hidden extras’ that mean the real actual rate is a lot higher. The only extras you’ll see on a MECS fee invoice are for optional things like Instrumental Music Tuition (if your child learns an instrument) or optional VET courses. And the only other items that may come as additional costs are items such as sports tops, a small number of textbooks in secondary, and if you use the bus – our very economical transport fees. Other than some Catholic providers, we believe we are the least expensive provider of independent education in our immediate region.
Government grants have a huge influence on our budget
Each time we budget we have to make estimates of what we’ll be receiving through government funding. Although the CPI is over 6% we have been able to keep our fee increase at 4% due to some additional Commonwealth and State government funding. We have been able to keep fees reasonably low because we receive this government funding and we run a ‘tight ship’.
Government funding is based on a system called the Direct Measure of Income (DMI) model. Governments calculate what our parents’ “capacity to contribute” is based on their incomes (they crossmatch ATO data with parents’ addresses). This results in a DMI score. From this score they calculate a notional entitlement to funding and we receive 80% of that from the Commonwealth government. MECS receives from the Commonwealth government around 62% of the equivalent of what it costs the State government to educate a child in a State school, and from the State government we receive about 16% of that amount. There is also an additional set of calculations to provide funding to enable us to support students with disabilities. Taken altogether, government funding contributes some 68% of our overall income. You the parent community, of course, contribute the balance.
If you’ve looked at the table of fees for 2023, you may have noticed that kindergarten will be free. This is a result of the State government’s so-called “Best Start, Best Life” program. The MECS Kindergarten will be participating in this funding program because not only does it assist families directly by eliminating fees, but the State government has heard our voice and is implementing more equitable funding for low fee Independent School Kindergartens. As a result our Kinder will be more financially sustainable in 2023.
Viable financial planning
The Board requires the Finance Committee to always plan for a modest surplus, a practice in keeping with a ‘not for profit’ organisation that seeks to be financially sound and viable for the long run. A modest surplus for us usually entails something in the order of 2% of income (some school economic advisors recommend 8 to 10%). This allows for the ongoing investment in essential IT systems and IT equipment for students, maintenance and development of our campus (preventing the run down school scenario so often seen on the news), and, providing there are no costly ‘unforeseens’, enables us to pay off debt. In a real sense then it is not a surplus but our investment in the school’s ongoing development.
MECS has a manageable level of debt since, while we have engaged in the building and development of our vibrant learning environment, the Board has a very strict set of limits around how much debt the school is allowed to take on. Those strict limits mean that the infrastructure development that has taken place over recent years has not caused undue pressure on school fees. Of course, the present school community assists in paying off some of this debt (from each year’s modest surplus), but so will the future community, as they will also benefit from the new and refurbished facilities. By the way, members of the Association will learn about the proposed Infrastructure Master Plan in the EGM on 20 October.
The Finance Committee and Board are very conscious of the MECS mission - “We provide Parent-governed, Christ-centred schooling … at a price affordable to those who are committed”. In order to make sure that Christian education is ‘affordable’, firstly, fees need to be kept as low as possible, and secondly, a mechanism needs to exist where some help can be provided to those who are committed but who can’t afford it. Where the fee rate is beyond those who are committed, the school helps out. We do not use the allocated help to offer academic scholarships (as it can be a self-serving practice that we think has no place in Christian education). Rather, once folk have shown they are committed they can apply for assistance through a confidential fee assistance mechanism that assesses need.
We appreciate that each of you is making a financial sacrifice to include your children in our learning community. We know it is not easy. We hope that we have struck the right balance between keeping the school affordable and keeping it viable. Thank you for partnering with us.