Private Schools are Desperate to Avoid Financial Disclosure

Private schools are trying to stop publication of school financial data by My School 2.0 by any means possible. They are resorting to any pretext to create doubt about the data. The wealthy elite schools in particular are desperate to stop publication of their finances. They fear disclosure will affect their future government funding, which is currently under review.

The Opposition spokesman on education, Christopher Pyne, has openly admitted this is the reason for opposing publication of school financial data. He said it would “undermine public support for non-government schools at a time when school funding arrangements were being reviewed…” The Age, 5 February].

The reason it will undermine public support is that it will reveal the massive resource advantage wealthy private schools have over government schools. Pyne, and the elite schools he speaks on behalf of, fear public outrage over large government subsidies for the wealthiest families in Australia while disadvantaged government and private schools continue to be denied the resources they need to overcome the effects of disadvantage on education outcomes.

In effect, Pyne is saying that taxpayers should be kept in ignorance about the financial state of schools they are being called on to support. This is a truly staggering proposition from someone who aspires to administer the federal government’s funding program for private schools.

In support of their campaign, private schools are using a confidential report prepared for the Australian Curriculum, Assessment and Reporting Authority (ACARA) to try and cast doubt on the reliability of financial data to be published on the My School website. The report was prepared by the accounting firm Deloittes which was contracted by ACARA to assess the methodology to be used for the publication of school financial data on My School.

However, the report actually endorses the ACARA’s methodology. It states that the methodology “provides a reasonable basis for the collection of materially comparable financial data by school on a national basis” and is consistent with Australian accounting standards.

ACARA’s methodology was even signed off on by the major private school organisations. The National Catholic Education Commission and the Independent Schools Council of Australia were both represented on the ACARA working party which recommended the methodology, which was endorsed by Deloittes.

Yet, private school representatives are now trying to use limitations mentioned in the Deloittes report to discredit the data that will be posted on My School 2.0. There is more than a hint of hypocrisy in this.

The Deloittes report does outline several limitations of the data. However, they relate to specific components of the data, such as the inclusion of pre-school expenditure in some states and different accounting systems between states. They primarily relate to differences between the states and are unlikely to make significant differences to comparisons of government and private school funding.

In fact, the financial data to be published on My School represent a huge step forward in providing more comparable figures on school funding. It will be a big improvement on current official figures.

The new data removes the major incompatibilities in official figures which have long resulted in government school expenditure being over-estimated in comparison with private school expenditure. Items such as the user cost of capital, payroll tax and government subsidies for student transport will be rightly excluded from government school expenditure because they are not included in private school expenditure. This is a big step forward.

However, both the My School financial reporting method and the Deloittes advice on it appear to ignore a couple of significant items of government expenditure which will still cause expenditure on private schools to be under-estimated in comparison to government schools.

First, expenditure by the Federal Education Department in administering federal funding of private schools does not appear to be included in private school funding, but the cost of state administration of government schools is included in government school expenditure. Nor is it clear that state government expenditure on administration and regulation of private schools is fully identified and included in private school expenditure.

Second, many private schools receive large donations which are tax deductible. For example, many elite schools receive donations of $2-3 million a year and some get $4-5 million in some years. These tax concessions are a cost to the federal government, but do not appear to be included as part of federal funding for private schools. Total donations to private schools are nearly $1 billion a year and could be costing the Federal Government $200-$300 million or more a year in foregone revenue. Tax deductible donations to Australia’s wealthiest schools alone could be costing the government over $1 million per school.

Private schools, especially the wealthiest, have good reason to fear greater financial disclosure. It will show that wealthiest schools have two to three times the resources of government schools, yet many are receiving federal government funding of $3-5 million a year and $3000-5000 per student.

This compares to a miserly $500 per student in additional federal funding for disadvantaged government schools. Yet, it is government schools that enrol the vast majority of low SES, Indigenous, and remote area students – family backgrounds that are associated with low levels of school achievement.

The elite private schools fear that some of their privileged funding, resulting from special deals and pork barrelling, will be removed. The Gonski committee reviewing school funding says its focus is on improving equity in education outcomes. This can only mean more funding for government schools and less funding increases for elite private schools.

This fear is even greater because it was recently revealed that wealthy private schools have been increasing fees faster than education-related costs while they continue to pressure parents for donations and run up large operating surpluses. Even parents who choose these schools are starting to question their financial practices.

These schools are desperate to avoid the financial scrutiny promised by My School 2.0. They are seizing on any pretext to stop financial reporting. It can only be hoped that the Gillard Government does not kowtow once again to the demands of private schools. The Prime Minister should remain steadfast on her longstanding promise to publish private school financial data.

Trevor Cobbold

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