Chapter 10 - Pre-School Education
10) PRE-SCHOOL EDUCATION
Key Points of ACT Argument

The ACT considers that the current assessment does not reflect the
complexity of provision and the diversity of the population groups using
pre-school services within and across the States.
Socio-demographic composition factor

The use of the current notional populations and socio-economic composition
components, used to reflect various demand and cost disabilities
underpinning the current pre-schools socio-demographic composition (SDC)
factor, are not supported by evidence of service provision practices.

The current SDC factor does not reflect the actual costs incurred by
governments in the provision of a complicated range of early childhood
education and childcare services as they vary for each of the following
settings:
 the three mainstream settings (government provided pre-schools,
government subsidised stand alone pre-schools and pre-school programs
in long day childcare centres);
 early intervention services; and
 services specifically for remote and indigenous populations.

A range of incorrect assumptions have been made, with the current SDC
factor failing to:
 reflect the varying State proportions of 3, 4 and 5 year olds using different
types of pre-school education care;
 reflect the varying costs of service provision of pre-school services in the
diverse range of settings;
 reflect evidence that there is a positive relationship between high income
and pre-school enrolments (students from low socio-economic
backgrounds do not increase the demand for, or cost of providing
pre-school services); and
 acknowledge that the data collections underpinning the calculation of the
notional population is not comparable nor sound.

The ACT considers that a comprehensive and detailed collection of
pre-school data should be undertaken as a basis for determining appropriate
disabilities.

If such a data collection is not feasible, then the current socio-demographic
composition factor should be abandoned as there is evidence to suggest it
does not contribute to fiscal equalisation.
Service delivery scale factor

The ACT considers that primary school data on staff to student ratios is not
an adequate measure of service delivery scale disabilities in the pre-school
education assessment because of the very different organisation and
resource deployment in the two sectors of schooling.
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Chapter 10 - Pre-School Education

In the absence of complete and valid information for both stand-alone and
child care based pre-schools for each State, the ACT considers a reliable
assessment of service delivery scale cannot be achieved and should be
abandoned.
Scale factor

The ACT requests the continued assessment of diseconomies of small scale
and input costs disabilities.
Background
10.1. This category comprises expenditure on administration, inspection,
support and operation of pre-school education programs provided on a
sessional basis for children up to 5 years of age delivered in a school type
environment. More specifically, the category includes:

direct provision of pre-school education in preschools and kindergartens;

payment of subsidies and grants to non-government organisations and
local governments providing pre-school education; and

education programs for pre-school age children with special needs,
including children with disabilities.
10.2. The ACT’s position relative to the States, based on the 1999 Review
methodology and using the latest available data is illustrated below. This
sees the ACT being assessed by the Commission as having negative needs
in this category.
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Chapter 10 - Pre-School Education
STANDARDISED, ACTUAL & AUSTRALIAN AVERAGE EXPENDITURE:
PRE-SCHOOL EDUCATION, 2000-01
50
45
40
35
30
$pc
Aust.
Avg.
25
20
15
10
5
0
NSW
Vic
Qld
WA
SA
Standardised
Tas
ACT
NT
Actual
Standardised expenditure is the amount that the Commission deems the ACT is required to
spend if it is to provide an average level of service.
Actual expenditure is the actual funding spent by the ACT on this category in 2000-01.
10.3. A category structure is provided in the following table and illustrates the
major components of the current assessment, together with comments on
how the ACT is affected by the application of the different factors.
10.4. This chapter focuses on those components of the 1999 Review
methodology that the ACT wishes to raise with the Commission. In particular,
the ACT is seeking that the Commission address a number of perceived
weaknesses in the application of the following components:

socio-demographic composition factor; and

service delivery scale factor.
10.5. The ACT is also requesting that the Commission continue to assess
scale affected expenditures given their particular importance to the Territory.
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Chapter 10 - Pre-School Education
PRE-SCHOOL EDUCATION:
SUMMARY OF THE CGC 1999 REVIEW METHODOLOGY
Component factors assessed
ACT position
Scale Affected Expenditure
(wgt 0.78%)
Admin. Scale
Input Costs
The Commission assessed above average
needs for the ACT due primarily to
diseconomies of small scale.
Schools (wgt 98.88%)
Dispersion
Input Costs
Service Delivery Scale
Socio-demographic composition
The negative needs assessed are due mainly to
the Socio-demographic composition factor
where the ACT is assessed as having a below
average
pre-school
population
and
proportionately less indigenous students,
students from a low income background and low
English fluency families.
Isolation (wgt 0.34%)
Summary
The ACT was assessed as having negative needs in this category which were derived
mainly from the socio-demographic composition factor in the schools component factor.
Introduction
10.6. There are two issues that the ACT requests the Commission to review
in relation to pre-schools:

the socio-demographic composition factor; and

the service delivery scale factor.
10.7. The socio-demographic factor calculated by the Commission is based
on the relevant (or notional) pre-school population for each State. The
relevant population is made up of notional 3 years olds from families with low
income, the 4 year old population and notional 5 years olds not in primary
school with adjustments for cross-border and diplomatic students.
10.8. The ACT considers that the socio-demographic composition
factor is defective as a range of assumptions have been made
concerning the impact of variables driving States’ demand for, and cost
of service provision.
10.9. More specifically,
assessment methods:
the
following
concerns
exist
with
the

the current approach takes no account of the complexity of provision
and the diversity of the population groups using pre-school services
within and across the States; and

it assumes that students from a low socio economic background
increase the demand for services (they are high users) and/or the
costs of providing the service.
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Chapter 10 - Pre-School Education
10.10. The second matter of concern to the ACT is the use of primary school
data and its application to pre-school education for the calculation of service
delivery scale disabilities.
10.11. The wide difference in the staff to student ratios, the basis of
allocation of teaching and support staff to pre-schools and the different
organisation of tuition sessions across the two sector makes this
approach inappropriate.
Socio-economic Composition
Overview – background information
The ACT
10.12. Table 10.1 shows the numbers of students in each age group enrolled
in pre-schools in the ACT.
TABLE 10.1: PRE-SCHOOL ENROLMENT BY AGE GROUP, ACT, 2001
Age
3
4
5
Total
132
2,878
728
3,738
Per cent of enrolment
3.5%
77.0%
19.5%
100.0%
Enrolment per thousand ERP (a)
0.42
9.25
2.34
12.02
Enrolment as a percentage of age
group (ERP)
3%
68%
17%
30%
Number
(a)
Estimated resident Population (ERP) data has been used as at March 2001. A point in
time ERP has been used to correspond to the enrolment data.
Pre-school education provision and funding across the States
10.13. The Commission will be aware that the provision and funding of
pre-school services differs significantly across the States. In the case of
pre-school education, this includes the extent of provision (for example,
whether universal or targeted) as well as subsidies to non-government
providers and fees to users.
10.14. The provision of pre-school services is complicated by the variety of
provision within and across States. Pre-school education may be provided
directly by government, managed by community not for profit organisations or
local governments or provided as part of a child care service (usually
centre-based long day care).
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Chapter 10 - Pre-School Education
10.15. Non-government pre-schools attract various level of subsidy across
jurisdictions and pre-school programs in child care centres are funded
differently from stand alone pre-schools and pre-schools attached to
government schools. The following extracts illustrate this complexity in
provision.
10.16. The Productivity Commission summarises pre-school provision as
follows:
“The ACT, for example, is involved in the direct delivery of
pre-school services as well as providing funding for the delivery of
occasional care services to support families and children.
On the other hand, Queensland is involved in both the direct delivery
of pre-school services and the funding of the Creche and
Kindergarten Association to help groups provide community based
kindergartens and pre-schools.
In NSW, the Department of
Education and Training provides pre-school services in low
socioeconomic locations or in locations with high Indigenous
populations, while the Department of Community Services provides
financial assistance and licenses 843 community or local
government operated pre-schools.
The NT directly delivers pre-school services, provides operational
funding for all child care centres, and assists community based
kindergartens and other services. South Australia is primarily
involved in the direct delivery of pre-school services. Victoria funds
organisations to provide pre-school services. Tasmania directly
delivers kindergarten services through the school system and also
provides funding for non-government kindergartens.“ 1
10.17. The OECD Report, Review Of Australian Early Childhood Education
and Care Policy describes provision as follows:
“Most States and Territories aim for the universal provision of a
pre-school place for children in the year before school, with Western
Australia guaranteeing pre-school provision in the two years before
school. In many jurisdictions pre-schools may also be attended by
younger children although a place is not necessarily guaranteed.
In Tasmania and the Northern Territory, government pre-school
services are provided at no compulsory cost to parents. In Victoria,
South Australia, Western Australia and the Australian Capital
Territory the majority of families pay some fee, although this fee is
not compulsory. In New South Wales and Queensland fees vary
depending upon the provider of the service. Fee rates are difficult to
compare as they may be charged differently – hourly, weekly or
yearly. However, fees in government provided pre-schools range
from $5 a week to $1.10 – $1.85 an hour. Pre-schools provided
through the Catholic and Independent sector may charge higher
fees.
1
Report on Government Services 2001 Productivity Commission, Canberra, 2001.
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Chapter 10 - Pre-School Education
Early intervention services also exist as separate facilities providing
specialist support to families, particularly in the area of disability.
These services may also link in with formal ECEC options to work
toward inclusion. For instance, in the Australian Capital Territory
early intervention units are co-located with pre-schools and may
offer a transition into the mainstream program. In South Australia, a
number of specialist programs are offered within mainstream
pre-schools and schools to facilitate inclusion.” 2
10.18. The ACT considers that the current relevant populations do not
accurately reflect the actual costs of service provision the diversity of
the approaches adopted by the States in providing pre-school education
services - the policies of the different States are so disparate that an
assessment based simply on the relevant population fails to capture the
costs of service provision
The major assessment issues
10.19. The variety of approaches described in the previous paragraphs based
on extracts of two recent reports presents several problems that should be
addressed, including the need to:

overcome inconsistencies in basic statistical information (which are driven
by State policies); and

accurately assess costs of service provision which vary according to the
type of pre-school education services offered (they all have different cost
drivers).
10.20. Additionally, the following should be addressed:

the use of relevant population as the basis of the assessment approach as
it is poorly grounded - it does not measure actual use of pre-school
services - enrolment as a percentage of age group (ERP) varies in the
States (for example, in the ACT, only 3% of 3 year olds, 68% of 4 years
olds and 17% of 5 years olds are enrolled in pre-schools); and

address the adjustment for low socio-economic status – evidence
suggests that enrolments increase as socio-economic status increases.
10.21. The ACT considers that these are inherent problems which should be
resolved.
10.22. Statistics of pre-school enrolments, on which calculations of
disabilities are based, should separately identify enrolments in
government provided pre-schools, government subsidised pre-schools
and pre-school programs provided in childcare centres. They should
also separate targeted and untargeted programs and special early
2
OECD Report: Thematic Review of Early Childhood Education and Care Policy, Australian
Background Report (Ms Frances Press and Professor Alan Hayes, Institute of Early
Childhood, Division of Early Childhood and Education, Macquarie University, Sydney; For the
Commonwealth Government of Australia, Canberra 2000).
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Chapter 10 - Pre-School Education
childhood intervention services from mainstream services. These
varied pre-school education services will all have different cost drivers
and service demands.
10.23. It is important that the Commission clearly distinguish high cost early
intervention services, usually including younger children (3 year olds and
younger) from mainstream pre-school services. The enrolment in high cost
early intervention services is relatively small, has a high per capita cost and is
unrelated to factors driving enrolment in mainstream services.
10.24. Table 10.2, derived from the Productivity Commission Report, shows
that three year old enrolments largely reflect the enrolment policies in
mainstream pre-schools. This is not the case for the ACT, as the figures
capture only the enrolments in early intervention services.
TABLE 10.2: CHILDREN USING GOVERNMENT FUNDED AND/OR
PROVIDED PRE-SCHOOL SERVICES, 1998-99: YOUNGER CHILDREN
State
Enrolment of
younger
children
Estimated
Resident
Population of 3
year olds 1999
NSW
14,285
87,109
16%
2.24
QLD
10,684
49,363
22%
3.07
WA
16,674
25,927
64%
9.04
SA
4,769
19,287
25%
3.20
144
4,305
3%
0.47
ACT
Enrolment as a Enrolment per
percentage of
thousand
estimated 3 year
ERP
old population
Source: Report on Government Services, Productivity Commission, 2000 and ABS Catalogue
3201.0, 2000.
10.25. The age of commencement in terms of the month in which children turn
4 accounts for the average distribution of 3, 4 and 5 year olds over the
pre-school year. The corrected figure for the ACT should be around 250 for
mainstream enrolments (averaging 6% of total enrolment over the pre-school
year) and 144 for early intervention programs.
10.26. The enrolments of 3 year olds reflects the very different provision and
enrolment policies applying to all pre-school age groups across the States. In
NSW, this reflects their policy of providing government pre-schools in low
income areas and certain remote communities. As previously indicated, in
other States the provision varies from universal provision by government
pre-schools (for example the ACT and NT) to standard subsidies of
community pre-schools as in Victoria.
10.27. There is no basis for selecting the income status of the families of three
year olds as an indicator of differential costs across all States. While in NSW
low income, at least in part, drives the location of government pre-schools,
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Chapter 10 - Pre-School Education
there is nothing to suggest that 3 year olds from low income families increases
the demand for services, or the cost of provision.
10.28. The ACT considers that the current assessment fails to use the same
profile of users in each of the three possible mainstream settings used by
younger children, that is for:

government provided pre-schools;

government subsidised stand alone pre-schools; and

pre-school programs in long day childcare centres.
10.29. A further complication is the provision of pre-schools to remote and
indigenous communities in some States and not others, where particular
enrolment rules may apply for children under 4. There is little available data
on the take up places by aboriginal children. The indications are that this is a
small minority of enrolments (in 1998 the total aboriginal enrolment in preschools in South Australia was 825) and that enrolments tend to be lower
amongst indigenous students (as reported for example, in the Western
Australian Annual Report 2001-01, page 48).
10.30. While there appears to be a case for an assessment of a small
cost disability factor in respect of indigenous and remote communities,
the current methodology of ‘bracketing’ this cost disability with a low
income indicator is unsubstantiated.
10.31. If it is decided to assess a cost disability factor in respect of indigenous
and remote communities, it is important that the assessment identify
accurately the service provision and take up for remote and aboriginal
communities to properly identify the actual additional costs incurred by
government.
10.32. The standard enrolment policy of the States is to exclude most younger
children from mainstream services in government managed and subsidised
stand-alone pre-schools. As such, it appears that the majority of three year
olds in pre-schools are enrolled in government subsidised programs in child
care centres.
10.33. Child care centres offering all day care usually cater for children from 0
to 12 (and older). These services incur the lowest cost to government,
regardless of the socio-economic status of the children’s parents. In light of
this, the use of a notional three year old population based on low
income families is inappropriate as an indicator of a cost disability for
mainstream services.
10.34. As a starting point in assessing cost disabilities generated by younger
pre-school children, accurate enrolment information by age group for each
pre-school service across the States should be collected. This should also
include the three types of mainstream services, early intervention services for
children with special educational and other needs and services specifically for
remote and indigenous populations.
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Chapter 10 - Pre-School Education
10.35. Turning to older children in pre-schools, Table 10.3 shows the
pre-school enrolment in the States for 1998-99 of children in the year prior to
commencement in school derived from the Productivity Commission. This
age group comprises 4 and 5 year olds. Most 5 year olds are those that turn
5 while attending pre-school.
TABLE 10.3: CHILDREN USING GOVERNMENT FUNDED AND/OR
PROVIDED PRE-SCHOOL SERVICES IN THE YEAR PRIOR TO
COMMENCING FULL TIME SCHOOLING, BY STATE, 1998-99
Enrolment
Mean Resident
Population
Enrolment per
thousand MRP
State Enrolment
relative to
Australia
NSW
80,318
6,367,287
12.61
0.98
Vic
60,725
4,682,951
12.97
1.01
Qld
48,056
3,480,317
13.81
1.08
WA
20,797
1,844,559
11.27
0.88
SA
18,343
1,489,570
12.31
0.96
Tas
5,758
471,363
12.22
0.95
ACT
3,836
308,484
12.44
0.97
NT
3,599
191,353
18.81
1.47
241,432
18,835,884
12.82
1.00
Aus
Source: Report of Government Services for the Steering Committee for the Review of
Commonwealth/State Service Provision, Productivity Commission, 2000.
10.36. Figure 10.1 charts this pre-school enrolment against the 4 and 5 year
age groups expressed as a proportion of mean resident population. As
expected there is a very strong correlation (0.93) 3. It may be said that the
age group profile of each State effectively determines its pre-school
enrolment. Other factors are less significant, together accounting for no more
than 7% of variation in enrolment between States.
FIGURE 10.1: PRE-SCHOOL ENROLMENT - 4 AND 5 YEAR POPULATION
PER CAPITA (x1000), BY STATE, 1998-99
3
4 & 5 year olds per thousand
37.00
35.00
33.00
31.00
29.00
27.00
Department of Education and Community Services, 2002.
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Submission to the 2004 Review
198
25.00
10.00
12.00
14.00
16.00
18.00
pre school e nrolme nt pe r thousand
20.00
Chapter 10 - Pre-School Education
Source: Report on Government Services, Productivity Commission, Canberra 2000, and ABS,
Catalogue 3201.0, 2000.
10.37. As is the case for schools education, anecdotal evidence
suggests that high socio-economic status is a non-policy influenced
driver of participation in the pre-school sector.
10.38. The issues relating to each age group are outlined in more detail in the
following paragraphs.
Three year old population
10.39. The Commission uses a notional 3 year old population to determine
cost and demand disabilities in the provision of pre-school services. The
notional population is based on the number of 3 year old children from low
income families and living in a population centre of more than 50,000 persons.
This is a poor indicator of a cost disability across States for five main reasons.
10.40. Firstly, it ignores the evidence that there is a positive relationship
between high income and pre-school enrolment.
10.41. Secondly, the 3 year old pre-school population is not a homogeneous
population within States or across States – it includes higher cost children with
special needs as well as younger children attending pre-school programs in
childcare centres only partially subsidised by government. Given the States’
enrolment policies for mainstream pre-schools, the latter are most likely to
comprise the great majority of younger pre-school children.
10.42. Thirdly, apart from in NSW where mainstream pre-schools are provided
by government in target localities, the standard policy is not to locate
pre-schools in low income areas. Additionally, there is no evidence that
pre-school students from low income families impose additional demands or
costs on pre-school education services.
10.43. Importantly, in any event, this age group is unlikely to be enrolled in
government provided services except as a recipient of an early intervention
service.
10.44. Fourthly, the Commission uses the 3 year old low income population as
a proxy to represent remote and indigenous pre-school enrolment as ‘a
simpler method of assessment’.
10.45. The ACT considers that remote and indigenous enrolments should be
assessed separately because of the distortion caused by using the catch-all
indicator of low income status. The present approach that captures 3 year old
children from low income families, assumes that the costs to government of
three year olds enrolled in pre-school programs in subsidised child care
centres incur the same costs to government as those enrolled in remote and
indigenous services. This is clearly not the case.
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Chapter 10 - Pre-School Education
10.46. The present approach does not reflect what States actually do in terms
of the range of provision provided to all income groups across all States
because it does not use actual pre-school enrolments
10.47. Fifthly, the ACT’s investigations have revealed the inadequacy of
national information collections (ABS and Productivity Commission) on
pre-school services as well as inconsistent reporting in state statistical and
annual reports. The data does not adequately reflect actual pre-school
enrolments, by age group and type of provision of pre-school service.
10.48. The use of the number of 3 year old children from low income
families should be removed from the assessment given that:

high socio-economic status is a main driver of pre-school
participation;

the statistical data used is poor – it does not reflect the varying State
proportions of 3 year olds using different types of pre-school
education care;

it does not reflect in any way the varying costs of service provision
associated with:
 mainstream government provided pre-schools;
 mainstream settings
pre-schools; and,
government
subsidised
stand
alone
 mainstream settings pre-school programs in long day childcare
centres;
 early intervention services for children with special educational
and other needs; and
 services specifically for remote and indigenous populations.
10.49. The ACT considers that a collection identifying actual enrolments
in pre-school by age group and mode of delivery should be undertaken
with a view to determining appropriate disabilities.
10.50. If this is not possible, the Commission should abandon a
differential assessment.
Four year old population
10.51. The Commission uses the entire four year old population as one of the
proxies for determining the relevant population.
10.52. Data on the combined four and five year old population (that is, the
enrolment of children ‘in the year prior to commencing full time schooling’)
indicates that the pre-school enrolment in each State is a similar proportion of
the 4-5 year old cohort (around 43% - 48%) with NT 52% and Tasmania at the
limits of the range – see Figure 10.1).
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Chapter 10 - Pre-School Education
10.53. The ACT has very strong reservations regarding the use of this data as
a demand or cost indicator.
10.54. There are a number of State policy influences given the various modes
of delivery, and their associated cost structures. Indeed, the information
lumps together children in high cost government provided pre-schools and two
types of subsidised pre-schools – stand-alone and childcare centre programs.
10.55. The use of the number of 4 year olds should be removed from the
assessment given that:

the statistical data used is poor – it does not reflect the varying State
proportions of 4 year olds using different types of pre-school
education care; and

it does not reflect in any way the varying costs of service provision
associated with the three mainstream settings, early intervention
services nor the services specifically for remote and indigenous
populations.
10.56. The ACT considers that a collection identifying actual enrolments
in pre-school by age group and mode of delivery should be undertaken
with a view to determining appropriate disabilities.
10.57. If this is not possible, the Commission should abandon a
differential assessment.
Five year old population
10.58. It is unclear why a notional five year old population is used as an
indicator of need for pre-school education services. This approach should be
reviewed as:

available information indicates that pre-school enrolment is a similar
proportion of the 4-5 year old cohort across the States. This is evidence
that there is:
 no special sub group of the cohort of significant size that is more likely
to be enrolled in pre-school - the age distribution within the five year
old cohort and eligibility for school enrolment is likely to be the same
across all States, particularly as States’ enrolment policies have drawn
closer together and continue to do so; and

the approach lumps together children in higher cost government provided
pre-schools and the two kinds of subsidised pre-school (stand-alone and
childcare centre programs).
10.59. The use of the number of 5 year olds should be removed from the
assessment given that:
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Chapter 10 - Pre-School Education

the statistical data used is poor – it does not reflect the varying State
proportions of 5 year olds using different types of pre-school
education care; and

it does not reflect in any way the varying costs of service provision
associated with different settings.
Conclusion
10.60. The current approach to the assessment of cost disabilities for
pre-schools is inadequate and does not reflect the actual costs incurred
by governments in the provision of a complicated range of early
childhood education and childcare services.
10.61. The ACT considers that a collection identifying actual enrolments
in pre-school by age group and mode of delivery should be undertaken
as a basis for determining appropriate disabilities.
10.62. If such a data collection is not feasible, a reliable assessment of
disabilities is not possible, and the attempt to calculate one on the
current basis should be abandoned.
Service delivery scale
10.63. The Commission applies the primary school staff:student ratios data to
the pre-school education assessment to derive service delivery scale
disabilities.
10.64. The ACT considers that the current approach is inappropriate given the
different characteristics of the primary school and pre-school sectors,
including the:
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Chapter 10 - Pre-School Education

wide difference in the staff:student ratios;

basis of allocation of teaching and support staff to pre-schools; and

different organisation of tuition sessions.
10.65. In the ACT, pre-school education is provided in up to four sessions per
week totalling 101/2 hours. There are 2 staff allocated to each session and a
maximum of 25 children attend per session. This contrasts with the
continuous five day sessions of primary school, totalling around 25 hours per
week.
10.66. Student to staff ratios in the primary and pre-school sectors in the ACT
are summarised in Table 10.4.
TABLE 10.4: - STUDENT:TEACHER RATIOS, PRIMARY SCHOOLS
AND PRE-SCHOOLS, ACT, 2000
Sector
Ratio of students to teachers
Primary School
17.5:1
Pre-school
45.0:1
Source: ACT Department of Education and Community Services, 2001.
10.67. The organisation and staffing configurations of pre-schools are similar
across States, however, detailed information is not available.
10.68. Teaching costs for pre-schools are much smaller per capita than for
primary schools, indicating that disabilities are small, if they exist at all.
Additionally, based on the above information, a very large variation exists
between the student to staff ratios for the primary schools education and
pre-schools education assessments.
10.69. Indeed, based on this data, as a minimum, the Commission should
discount the current service delivery scale factor for pre-school education by
60%.
10.70. However, in accordance with the agreed enhanced accountability and
transparency guidelines agreed at the Priority Issues of Principles Conference
held in 2001, the ACT considers that the calculation of a specific and robust
service delivery scale factor based on pre-schools education data is a
requirement under the new guidelines.
10.71. Unless it is decided to undertake a data collection of State staff
and student numbers (for both stand alone and child care based preschools) within the pre-schools education sector, with a view to
determining a specific pre-schools service delivery scale factor, the ACT
considers that a reliable assessment of service delivery scale cannot be
achieved and should be abandoned.
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Chapter 10 - Pre-School Education
Scale Affected Expenditure
10.72. The ACT continues to face higher per capita costs associated with the
administration of pre-school education relative to the majority of States.
These costs can be summarised as relating to two scale effects:

diseconomies of small scale – the need to provide the full range of head
office/administrative services related to management and administrative
provision which are inherent in the provision of pre-school education
services, with the cost being borne by a relatively small population relative
to most other States; and

input costs – the above standard wages and salary costs faced by the ACT
in providing the relevant head office/administrative services.
10.73. Clearly, the associated head office functions are similar across all
States. The major difference is that the per capita cost for each States varies
given the size of the population bearing the administrative functions.
10.74. The ACT has provided more detail on the necessity for scale affected
costs to be assessed can be found in Chapter 7 - Administrative Scale and
Chapter 8 - Input Costs.
10.75. The ACT requests the continuation of an administrative scale and
input cost disabilities assessment for the pre-school education
category.
ACT Main Submission to the 2004 Review
204