Many areas that were expected to grow when the ABS (for the Department of Health) released their population forecasts in 2019 seem to be heading in a different direction by the latest ABS forecasts released in October 2024, covering the period 2022 - 2032. Much of this population optimism is now an anticipated reduction, especially in school age children.

The Pendulum Theory 

If we think of enrolments in independent schools like a pendulum, our view is it is strongly to the right, and growth has been very strong over the last 5 years. From 2020 to 2024, Independent schools’ enrolments across Australia have increased by 15.1%. Can this continue? 

The Baby Bonus 

If we go back to 2004, we were introduced to the Baby Bonus by Federal Treasurer Peter Costello. It had the effect of lifting the national fertility rate from 1.5 to 2.02 by 2008. Unfortunately, it has dropped back to 1.5 and is nearer 1.1 in many high socio-economic areas. 

A child born in 2008 is now 17, and ever since then, we have had less babies per 1,000 persons. The effect is less children coming through especially in the high socio-economic areas. 

The Covid Years 

Over the last 5 years we have left behind the Covid threats where many parents looked to independent schools over government schools due to the perceived better education they offered.  We are now enduring a relatively flat economy across Australia and are also experiencing changes to our migrant intakes, partly caused by Covid, and then by Government policy changes. Combine these with the average household size becoming smaller and a declining birthrate in Australia, and we have big changes in the school aged children forecasts in localised areas. 

Extra funding for Government Schools 

The recent announcements that the Federal Government are committing a further $ 5 billion is also very interesting, as it “may” improve the competition by lifting the standards of the Government schools – but I think we have all heard this record played before! Normally it comes out before an election, and dissolves quietly soon after. What will be the effects if many Government schools are able to improve their facilities and overall performance due to increased funding? 

Where is the growth occurring? 

There is no doubt that the lower cost outer metropolitan areas of most major cities are growing very fast. When we look at the areas around Marsden Park and Austral / Leppington in Sydney, and Wyndham, Clyde and Mickleham in Melbourne, these areas have been nominated to grow for some years now. The extent may change a bit but basically as our capital cities grow, and more houses are needed, these are the suburbs that people (especially migrants) are heading. There is a shortage of schools in total in these areas and it’s quite alarming that there are even fewer independent schools looking to fill the gaps. There is opportunity, but the fees may not be very attractive. 

Example for Melbourne 

 The extent of the forecast decrease in school age children in red 

The Independent school’s threat. 

What is more alarming from most independent school’s view is what is occurring in the higher socio-economic inner areas of the major cities, especially Melbourne and Sydney. Many of these areas are very high priced to buy into and have very little new housing as the existing houses and areas are relatively well protected by Councils against major demolitions or multi storied redevelopments. Older people are living longer and there is a government push to assist people to stay in their houses for as long as possible. This means less house turnovers and that when people can afford these houses, they are older and, in many cases, having older or less school age children. 

An example of this is the school age population projection from the ABS for Toorak (in Melbourne). 

Source – ABS population data to 2022 - 2032, and then extrapolation using the changes from 2030 – 2032 to extend out to 2037. 

This is showing a forecast drop in the number of school age children (5 – 18-year-olds) over the next 15 years of around 22%. 

Most of our major Independent and Catholic schools are within the inner suburbs of Melbourne and Sydney, and these areas are forecast to reduce the student age population. If you expect to remain at the same student numbers over time, the logic is that you will need to attract more students from further away, preferably using buses or public transport, take students from other schools or convert more students from attending Government schools to the Independent or Catholic school systems. 

Action Plans 

If your school is stable or improving slowly in enrolments, you are doing reasonably well if you are in a medium to higher socio-economic area. The best test is the length of the waiting list for your school, and if this is reducing, there could be a major problem coming. Maybe you just need to know what is coming in terms of population forecasts, and you may be managing it very well by your school’s reputation and past performance. 

If your numbers are dropping, then you need to see what is happening with your major competitors and see what the demographic forecasts are for your Trade Area. Maybe recognising that students may need to travel further in the future can assist with improved bus runs, improved school drop off points or some other minor actions that make it easier for students to reach your school. 

If you are experiencing an enrolments slide, then drastic action is required as it is very hard to reduce your fixed costs (wages etc) without feeling the effects in the classroom, 

If you need assistance in securing the data and analysing it so you can have a data-based action plan, please contact us at Spectrum Analysis. 

By Peter Buckingham 

Peter Buckingham is the Co-Founder and Managing Director of Spectrum Analysis Australia Pty Ltd, the leading demographic analysis and mapping company for schools in Australia. He was also a Federal Director and Victoria / Tasmania President of the Institute of Management Consultants. Peter is contactable by email at: 
peterb@spectrumanalysis.com.au or visit spectrumanalysis.com.au.