19 January 2011

The National Catholic Education Commission has reacted to the concerns about the ‘residualisation and changing socio-economic composition of government schools’ stated by the Gonski School Funding Review (The Age Jan. 17, 2011). On the social issue they claim that the Catholic system educates more disabled and socially disadvantaged children than other sectarian schools. However, they are forced to admit that in this regard they fall behind the public system. So they now claim that they give better ‘value’ for the taxpayer dollar. They quote inadequate if not misleading statistics. (The Age, January 15, 2011). There is nothing new about this.

There are two major reasons why the Catholic Education authorities should be confronted as misleading both the panel and Australian citizens.

1.   Their facts and figures cannot be taken seriously. There is not and never has been any real public accountability for the billions of taxpayer dollars poured into this religious institution.


2.   Their facts and figures leave out the billions of dollars of indirect grants’, namely taxation expenditures incurred through taxation exemptions.

Lack of Accountability 1969-2011

At no time during the last fifty years has a comprehensive picture been given by either the various Australian governments, or the sectarian sector, of the total financial cost to the Australian taxpayer of duplication of public schools by sectarian groups, the major one of which is the Catholic Church.

In the 1960s the public Treasury was prized open by the Catholic Church for funding of their educational enterprises. Their political arm, the DLP gained the balance of power and responsible citizens were worried about children in ‘poor parish schools’. This was regarded as a danger to the long-term national good. Wealthy catholic and Protestant schools were reclassified as ‘needy’ to protect an unholy protestant/Catholic alliance.

DOGS argued that the eventual residualisation and loss of public education – as in other countries dominated by religious groups – would result. Our predictions have proved correct. The concept of ‘residualisation’ is now being referred to by the panel established by the Gillard government to review school funding.  

The myth of the ‘poor parish school’ has long outworn its usefulness for church authorities. ‘Poor’ children and ‘poorly resourced’ schools are no longer in the sectarian, but in the public sector. Yet the Gonski panel is confronted with the simple fact that billions of dollars of State Aid to sectarian schools later, the public schools of this country are still attended by at least two thirds of the nation’s children.

From the very beginning the picture was muddied as the Catholic Education systems used the “Needs” policy to channel money into new “needy” schools and diverted public funds from the primary to the secondary sector. Then the other religious groups learnt to ‘play the system’.

There is nothing new about the current inequities in educational funding. It commenced with the Schools Commission in the 1970’s. The rorting of State Aid and in particular the ALP “Needs” policy was exposed by the DOGS in the following Advertisements inserted in newspapers at their own expense in the period 1970 to 1984.

The Age: 12 November 1970; 27  November , 1972, 4; 16 May 1973, 10;  12 July 1973, 14; 12 December 1975, 12 ; 23 June 1977, 16; 2 December 1977; 5 December, 1977, 12; 3 May 1984, 18; 28 November 1984, 20; 1 May 1985; 30 August 1988, 22-23; 2 March 1998, 11; April 26, 2005; 27 March 2006;  The Herald:  1 December 1972, 11;  11 December 1975, 38; The Australian : 10 December 1975, 5;19 July 1985, 7;  Canberra Times: 18 December 1980; 4 November 1983,11; 6 April 1984, 9.


The lack of accountability and transparency was more recently exposed by the DOGS when they discovered that the checking of the accuracy of enrolment figures provided by the private sector by the federal department of education is a bad joke, each school undergoing an accuracy check once every 50 years.

See Press Release 256 at Also see Press Release 238 at and Press Release 246 at and 266 at . The Auditor General made a few feeble noises in a June 2008 report. The silence from the government has been deafening.


The latest argument in the Church’s armory is that their schools are more efficient and cost less than public schools.

Does this mean that they are getting ready for a takeover or a makeover?

2.  Taxation Expenditures through Taxation Exemptions.

There has never been any calculation of the total cost to the taxpayer of the subsidization of private sectarian institutions. For example, there has never been any calculation of

1.   The private resources of religious institutions available to their schools which are exempt from taxation.

2.   The private contributions of parents available to the private sectarian sector, but returned through personal taxation exemptions.

3.   And last, but not least, the taxation expenditures involved in the myriad of taxation exemptions at all levels of government available to the private sector because, unlike the public sector, the6y are charities’. To give just a few examples – the exemption from payroll tax, GST, income tax, fringe benefits tax, capital gains tax, land tax, municipal rates and so on...Even wealthy parents, if they can pay substantial school fees get a lot of education expenditure back on the taxation merry-go-round.


The third, indirect subsidization through taxation exemptions of the Catholic Education system in particular, and the Church in general, is very extensive. It indicates that any direct grants to which the sector refers is but the tip of a very large iceberg of taxpayer subsidies.

According to the Business Review Weekly of March 24-30 2005 [1] taxation expenditure on ‘charities’ constitute a $70 billion third sector of the Australian economy.

These taxation expenditures are listed and analysed in a book published in December 2007 by Max Wallace entitled ‘The Purple Economy.’ He defines the  Purple Economy as ‘the wealth generated by the eternal mass exemption from taxation of religious organizations, their subsidiaries and their charitable arms.’ Max Wallace argues that democracies should be characterized by constitutional separation of church and state. He also argues it is not the role of a state to ‘advance religion’ through the myriad of tax breaks that supernatural organizations receive by virtue of centuries old charity law. These are tithes by stealth imposed on secular taxpayers without their consent. The book concludes that supernatural organizations should pay tax like any other corporation with the same deductions allowable for charitable work.


Following the dissenting judgement of Justice Lionel Murphy in the DOGS case of 1981, DOGS contend that State Aid to religious institutions is unconstitutional under Section 116 of the Constitution. If it continues, then the Catholic Education sector and the Church itself should be either subject to a public audit, and proper accountability, or, if this is not possible, public funding should be withdrawn.

Any argument about the cost to the taxpayer of the extensive subsidisation of the sectarian sector of education should be hedged about with the proper facts and figures based upon both direct grants and taxation expenditures entailed through taxation exemptions to the ‘charitable’ sector. Any claims made by the subsidised sectarian sector that they are ‘better value for taxpayer’s money’ than the public sector should be treated by the Gonski committee with the disbelief it deserves.


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[1] Business Review Weekly , March 24-30, 2005; ‘Inside Charities Inc.,’ Business Review Weekly, June 20-July 5, 2006;