AUSTRALIAN COUNCIL FOR THE DEFENCE OF GOVERNMENT SCHOOLS

PRESS RELEASE 422

March 31, 2011

SUBMISSION FROM THE AUSTRALIAN COUNCIL FOR THE DEFENCE OF GOVERNMENT SCHOOLS TO THE SCHOOL FUNDING REVIEW.

MARCH 31 2011

 The Review of Funding for Schooling has published an Emerging Issues Paper in late December 2010 – just before the Christmas break. Submissions are due on March 31 2011. What follows is the Defence Of Government Schools (DOGS) submission on this paper.

Recommendations:

1.      Public moneys should not be given to sectarian institutions

2.      If Public money IS given to sectarian institutions the exact amounts of both direct and indirect grants along with revenue forgone must be made accessible to all citizens and taxpayers.

3.      If public money IS given to sectarian institutions then those institutions must be accountable for every cent.

4.      If public money IS given to sectarian institutions for the purpose of education then a proper oversight of all aspects (eg enrolments) must be undertaken.

5.      NO public money should be allocated to any institution that requires, demands or receives any special exemption from the laws of Australia.

6.      NO school that receives public funds should be permitted to practice discrimination on any basis.

 

 

 

 

1.   CONFUSIONS AND CONTRADICTIONS

 

Currently there is a refusal to come to terms with two educational institutions which have diametrically opposed values in relation to ‘equity’.  This means that the emerging issues paper offers many ‘problems’ but few answers. 

DOGS note that, although the panel has limited terms of reference and personnel, there is  considerable  rhetoric about equity and ‘needs’. There is also concern about the persistent low achievement evident in the proportion of students in the bottom proficiency bands and the decline in reading performance measured between 2000 and 2009. (the PISA results).

The report assumes that there is no opposition to the public funding of private sectarian education in Australia, although recent polls on the issue and the DOGS suggest otherwise. The panel did not interview or call for comment from the DOGS. However, if the panel does not wish to meet with the DOGS, they can hear us on our 3CR radio program or read our Press Release on the website www.adogs.info.

The DOGS never accepted the findings of the Karmel Committee Report of 1973, and predicted the current residualisation of students in the State school system in Australia.

1.1.         Comparison of the Emerging Issues Paper with Karmel Committee Report of 1973.

 

As with the Karmel Committee in 1973,

·        there is no biting of the essential State Aid bullet – the elephant in the room.

·        There is no comparison of underlying values of systems and institutions.

·        There is no comparison of public and private or religious schools with their diametrically opposed values. Quite the contrary. The emerging issues paper is full of contradictions. There are various crucial paragraphs where diametrically opposed positions are tabulated then presented as ‘not necessarily inconsistent.’

·        The citizen/taxpayer is expected to believe there are no opposing interests, no inconsistencies- because the panel tells us so.

Unlike the Karmel Committee Report of 1973

·        The report has no philosophical, historical or even sociological basis. It is mainly a record of issues raised by representatives of public and private school interests through a series of selective consultations. 

·        There is a basic assumption that government and non-government schools are of equal significance for the national good. This is not the case. If anything, preference is given to the independent ‘free market’ paradigm.

·        There is absolutely no reference to the simple fact that you cannot have equity in education if you give preferential public funding, indeed any public funding to systems of schools which by their very nature are private, exclusive and select students on the basis of religion, ethnicity, ability to pay and geographic location.

1.2     What the Emerging Issues Paper Fails to Mention

·        There is no recognition that the public system is the only system which can lay any claim to espousing the value of equity in education. It is the only system which treats all children as equal, the only system which is open to all children regardless of their religion, ethnicity, ability to pay or geographic location.

·        On the simple facts and figures of public subsidization of the private sectarian/independent sector the silence on the figures relating to the indirect funding of these ‘charitable’ institutions is deafening.

·        There is only passing reference to the economic madness of  the duplication of educational services many times over of public facilities by sectarian institutions - at public expense, and the running down and out of real public ‘choices’ in the process.

·        The issue of ‘residualisation’ of the public system is lost in verbiage. The word ‘residualisation’ is re-defined to suit the private sector.

·        There is absolutely no reference to the accountability scandals and lack of transparency where sectarian schools have had ghost pupils, and ghost teachers. Even the federal Auditor General was forced to expose the inadequacies inherent in public funding of powerful private religious institutions in 2008-9. [1]

·        There is no discussion of the rorting of the ‘needs’ policy by the Catholic system. This has been exposed by the DOGS over the last forty years of research, and publicized in newspaper advertisements.

·        Lack of accountability and transparency in the sectarian sector is conveniently ignored as the so-called independent system comes up smelling like roses in a free market ideology. For the Review of Funding for Schooling panel, as for Karmel, only anaesthetised, ‘presentist’ prose is acceptable.

1.3     What the Panel has been Forced to Note:

Nevertheless, the panel has been forced by thorough research of public School representatives like Trevor Cobbold to admit that all is not well. The present system of education funding ‘is complex’. They noted on p. 6 that

Some were of the view that the current funding arrangements were not balanced across the sectors, contributing to a recent drift in enrolment numbers from the government school sector to the non-government school sector.

In the next sentence however, they noted support for the current arrangements which provide certainty of funding and the relative generosity of private funding tied to government school costs from ‘others’.

1.4     A Voucher System the Answer ?

According to the Financial Review of Friday 17 December,

A voucher system to guarantee each student in non-government schools a minimum level of funding with extra support for those with special needs, is being considered by the federal government’s review of education funding.’

What leads the reporter to this conclusion?

There are two excerpts from the report which supporters of public education should examine carefully. These quotes assume that the current levels of public funding of a predatory private sector will be quarantined and the residualisation or privatisation of public education continue apace. DOGS quote from pp. 19-20 and 26.

The first quote deals with what the Financial Review quoted above noted as a ‘voucher system’. This seems to represent a replacement for the SES funding model. There is some uncertainty in the context as to whether this includes public as well as sectarian schools. The second quote refers to a ‘portable funding’ voucher system for children with disabilities, similar to that promoted by Mr. Abbott before the last federal election.

Quote Number One pp. 19 - 20:

‘…there was broad support for the consideration of alternative funding arrangements based on a student’s educational needs, regardless of the type of school they attend…Based on the above views, the panel is of the view that there is clearly a need to look further at a range of different funding options to see whether they might be viable alternatives which could complement or improve on existing funding arrangements. This could involve looking at, for example, approaches that would specific a common funding amount for all students, with additional support attached to students with greater educational needs. This type of approach was put forward as a way of better targeting funding to schools and within schools to support students. The panel would welcome comments on this issue.

1.4.1. ‘Portable Funding’ for Students with Disability

The panel encountered a variety of views on potential models for portable funding for students with disability. Few supported a ‘pure’ voucher model, but many argued for a model that shared characteristics of a ‘ voucher’ so that all funding, or at least a proportion, should follow students with special needs of a student with disability when they move schools.

So, there you have it. The Review of Funding for Schooling is a blueprint for ‘more of the same,’ namely public funding of a private sector in the jungle of the parental choice market place, with a few crocodile tears for the children left behind and ‘ vouchers’ for parents to shop around to find a sectarian school that might accept their child.

Meanwhile, the system that could solve all the social and economic problems of our fragile democracy, the public system which is accessible to all children, will once again be left to pick up a few crumbs from the table of a religious system of private schools riding high on the neo-liberal theology of ‘choice’ and middle class welfare at all costs. 

1.4.2          Vouchers: Another American Failure Imposed on Australian Education:

Vouchers have failed in America again and again. [2]However, it should be noted that this has largely been because an organisation known as Americans for Separation of Church and State has successfully challenged them in the Supreme Court.

2.   STATE AID MISINFORMATION:

SOME RELEVANT QUESTIONS ARE FINALLY BEING ASKED.

The total amounts of taxpayer funding of the sectarian education sector have been based on misinformation and inadequate statistics since 1964. The ordinary citizen could see that this sector, even in 1964, favoured the wealthy and selected children for the first class ticket to heaven and the good job. Fifty years later it is a national scandal with the vast majority of children in public schools suffering discrimination at every turn.

Trevor Cobbold and others should be congratulated for exposing the statistical problem. But DOGS believe that the problem is much wider, deeper and possibly insoluble. However well-intentioned the promoters of the a “Needs” based  funding scheme might be, they are faced with an unholy Catholic/Protestant alliance which believes that the poor are only worthy of the crumbs from the rich man’s table. Education is not a charity. Sinners like homosexuals, divorcees and single parents need not apply.

The only way to solve the State Aid problem is to end it.

 

 

2.1     Media Reaction to Glaring Inequities

The Sydney Fairfax Press is finally giving some oxygen to the financial analysts who question  private religious school statistics.

Nobody is yet prepared, as DOGS have done over the years, to point out that there has not only been a refusal by governments and the private sector to recognise key areas of public expenditures from the beginning of State Aid in 1964. At no point has there been proper financial analysis of :

a.) The incremental costs incurred by public school administrators burdened with the uneconomic sectors of education. Schools in remote areas, those with special language needs, indigenous students and those with learning or physical disabilities receive additional funding. Schools with a high number of refugees attract extra funding for intensive language centres. The federal government is also providing additional funding to public schools serving disadvantaged communities. The most costly government schools are often small schools in remote areas. The global budget of public school administrations also includes institutions such as libraries and services available to the private sectarian sector.

Incremental costs are referred to in the NSW Department of Education and Training Discussion Paper: Australian School Funding Arrangements at para 1.4 under the heading The Unique Costs of Government Education.. DOGS quote:

When considering the adequacy of school funds, the cost drivers that particularly impact on public schooling are:

1)    Scale: Government schools are required to be the ‘first in’and ‘last out of any community and this legislative requirement for a large reach imposes its own costs… [3]

2)    Selection: Government schools are required to be available to all local students which can have a range of cost impacts…a school cannot refuse enrolment to a student because of their greater educational needs.

3)    Magnification of Cost Pressures: Cost pressures faced by all schools can be magnified due to the universal provision required of government systems. For example, teacher shortages…are most acute in schools serving disadvantaged or isolated communities.

4)    Regulation: …it is only Government schools…required by legislation to take students and there is little discretion to refuse enrolment.

 

b) The user cost of capital, payroll tax and subsidies for student transport costs. As a result, government expenditure on government schools is over-estimated in comparison with expenditure on private schools in official reports.

c.)The taxation expenditures involved in taxation exemptions for council rates, land tax, stamp duty,  income tax, fringe benefits tax, GST, capital gains tax…name the tax, and there are public expenditures.

 

Gaps in Information on Taxation Expenditure or Exemptions.

Education is not a charity. Australian children have a RIGHT to educational opportunities of the highest quality. This is the basis of public education funded by taxpayer funds.

Unfortunately the sectarian sector, charging fees and placing religious tests on children, parents and employees provides crumbs for the poor in the form of charity – namely ‘scholarships. This is done with ‘public money.’ Their philosophical basis is a denial of all that our democratic society has

 There is increasing concern in Australia about the ‘purple economy’, namely the tens of billions of dollars in taxation expenditures incurred by exemptions for so-called’ charitable’ institutions. Not only is Australia lacking a Charities Commission comparable to that in the UK, New Zealand and Canada. There is a deafening silence about  this extraordinary burden on the taxpayer and the implications it has for public subsidisation of the sectarian education sector.

In December 2007, with the help of secular organisations and individuals, the Australian National Secular Association (now ANZSA)  published The Purple Economy: Supernatural Charities, Tax and the State by Max Wallace This book was mostly concerned with the history and politics of the tax exemption for religion.

For the latest material on this issue DOGS refer to the Secular Party submission to the Inquiry into the Tax Laws Amendment (Public Benefit Test) Bill 2010 written by John Perkins and Frank Gomez. It strives to detail the costs of tax expenditures for religion. The total figure for exemptions enjoyed by sectarian education systems would be a proportion, albeit a considerable proportion of this.   

Charities are eligible for a range of tax concessions, including refunds of imputation credits, income tax exemptions and GST concessions. To be eligible for endorsement as a charity, an organisation must be operated for public charitable purposes. Charitable purposes are: the relief of poverty, sickness, or the needs of the aged; the advancement ofeducation; the advancement of religion; and other purposes beneficial to the community.

Section 116 of the Australian Constitution states that the “Commonwealth shall not make any law for establishing any religion, or for imposing any religious observance, or for prohibiting the free exercise of any religion …” As a result of the 1981 High Court decision on the Defence of Government Schools (DOGS) case, the public funding of any or all religion and religious schools has been deemed permissible under the constitution in spite of the fact that this was the opposite of what the framers of the Constitution intended.

DOGS, along with the rest of Australian citizens, believe that the majority judgement was a political rather than a legal decision. It failed to take into account the intentions of the Founding Fathers as evidenced by the Constitutional Debates and R.G. Ely in his Unto God and Caesar ( MUP) 1976. The dissenting judgement of Justice Lionel Murphy followed  the  intention of the Founding Fathers, and stands for the future.

Australia is one of only three countries in the world where even the commercial enterprises of religious organisations are granted tax concessions. As to obtaining evidence regarding the extent of the concessions that are available to religious organisations, this is difficult, due to inadequacies in the disclosure regime. These bodies are not required to report the breakdown of their charitable, business or investment activities. This lack of transparency makes it difficult to determine the actual cost of these exemptions.

John Perkins and Frank Gomez however refer to some estimates of the value of these exemptions. These figures were also provided in a previous submission in relation to the Treasury’s review of taxation. They  attempt to quantify the magnitude of the revenues and concessions. An estimate of revenue and assets is shown below.

Revenue and Assets of Churches (2007 estimates)

·        Revenue of the 10 biggest churches $47.647 billion  [4]

·        Estimated collections $2.760 billion [5]

·        Catholic Church Assets $150  billion [6]

·        Estimated other church assets $217.647 billion [7]

On the basis of these estimates, Perkins and Gomez provide some estimates of the cost to taxpayers and to governments of the concessions available to religious organisations.

 

Federally, these apply to:

·        income tax,

·        fringe benefits tax, 

·        the goods and services tax.

·        Capital gains tax

State government exemptions cover :

·        land tax,

·        payroll tax,

·        stamp duties and

·        car registration fees.

Local governments provide exemptions from

·        municipal rates. Concessions may also be granted for some

·        water and power charges.

As the accounting practices of sectarian institution are opaque, DOGS are unable to provide estimates for all these items.

However we can provide estimates for direct grants from government to sectarian institutions, which are another significant cost to taxpayers. These estimates are given below.

Estimates of Cost to Taxpayers

$ Million Notes

·        Income tax lost (at corporate rate ) $ 6.529 billion [8]

·        Capital Gains Tax Lost  $6.529 billion [9]

·        Grants for family counselling $64 million [10]

·        Chaplains in schools programme $30 million [11]

·        Grants to religious schools (from commonwealth) $5.630 billion [12]

·        Grants to religious schools (from states) $1.8 billion [13]

·        Grants for abortion counselling 20 million [14]

·        Grant for interfaith convention Melbourne 2 million [15]

·        Grant for Catholic World Youth Day (state & federal) 140 million [16]

The above figures are calculated from the funding to sectarian institutions in NSW and multiplied by 3 to estimate the total cost to Australian taxpayers

Further estimates of income lost to state and local governments are given below. This financial information suggests that religious organisations receive ample support via direct grants for many of their activities.

Like Perkins and Gomez, DOGS question whether local and state taxpayers should pay higher taxes and rates as a result of extending exemptions to organisations that are already subsidised through direct government expenditure.

Income Lost to State and Local Governments

·        Payroll tax exemptions $473 million [17]

·        Stamp duty exemptions $418 million [18]

·        Land tax exemptions $139 million [19]

·        Rate income lost to councils $ 610 million [20]

Combining the above costs to Australian taxpayers, it can be seen that an estimate of the total cost of concessions to religious organisations in Australia exceeds $31 billion. This is a gross figure and speculative, but informative nevertheless.

However it does not include items such as FBT and GST where taxpayers are unable to source data on the value of concessions. But the figure gives some idea of the magnitude of the cost of concessions which arise as a result of the continued adherence to the medieval doctrine of charitable organisations.

More accurate estimates of this kind could be obtained if the information was available, but it is not.

It is standard budgetary procedure that the loss of revenue arising from exemptions, for example those applying to superannuation pensions, to be listed in budget papers. They can be quantified. It is anomalous that no such requirement exists for religious organisations, even those that may be involved in significant business and investment related activities.

Further anomalies occur in relation to the application of the Fringe Benefits Tax and the Goods and Services Tax. As the FBT is exempt to employees who are religious practitioners, eligible employers can provide remuneration packages that are biased substantially in terms of fringe benefits, thereby avoiding any income tax. This device can also create an unwarranted entitlement to social security benefits.

From the above it can be very roughly estimated that the taxation expenditures or exemptions on the assets and income of major religious organisations, including their educational enterprises constitute billions of dollars. It can only be a matter of great concern to citizens and taxpayers that there has to date been no mention of these expenditures in estimation of funding costs of private sectarian education in Australia.

It is to be hoped that the Gonski Committee will make some attempt address these financial issues in a candid and direct manner.

 

3.Official Figures at Variance:

It is one thing for the opposing parties to trade statistics.

But now official figures themselves are at variance.

As Trevor Cobbold from Save our Schools points out, recent estimates of government expenditure on private schools published by the Productivity Commission in its Report on Government Services (RGS) are inconsistent with other official figures, in particular, the  National Report on Schooling (NRS) published by the national education ministers’ council. The inconsistencies need explanation as they are creating confusion in public debate about trends in school funding.

The Productivity Commission’s figures show a much lower increase in government funding for private schools than for government schools in recent years while other official figures show that government funding for private schools has increased by much more than for government schools.

The Productivity Commission states that total Commonwealth and state/territory government expenditure on private schools fell in real terms (that is, adjusted for inflation) by $462 per student between 2004-05 and 2008-09 while government expenditure on government schools increased by $623 per student. In current dollar terms, they claim that  expenditure on government schools increased by $2,829 per student (or 26%) while expenditure on private schools increased by only $796 per student (13%).

This increase for private schools is much less than the annual indexation provided to private schools under the SES funding model. It is also much less than the increase shown in the National Report on Schooling (NRS) published by the national education ministers’ council.

The productivity Commission does not take into account the incremental costs in the government sector, let alone the user cost of capital, subsidies and taxation exemptions allowed to the private sectarian sector.

Meanwhile, the sectarian sector, particularly spokesmen representing the independent sector are using the Productivity Commission figures and peddling the ideology of ‘choice’ and other thinly veiled arguments for insecure, aspirational and competitive parents. ( See Geoff Newcombe  quoted by Anna Patty in the Sydney Morning Herald of February 14, 2011.)

As the lid opens on the gross inequities in Australian Education created by the funding of sectarian education over the last fifty years, the Catholic Hierarchy are strangely silent. Are they embarrassed when they turn to the Genesis story of the Creation in which God created man – and woman – in his own image and therefore equal? Or are they merely following the usual tactic of lobbying in the corridors of power.

4.   Lack of Accountability

There has been an outrageous lack of accountability and transparency for the billions of dollars of public money channelled into church coffers over the last fifty years. The ‘Needs’policty of the Schools Commission was misused by the Catholic system of Education from the beginning. There has always been and still is limited corroboration of enrolment data provided  by the sectarian sector and even less enforcement of  accountability. These allegations can be evidenced by DOGS Advertisements and News Releases over the last forty years and a report by the Commonwealth Auditor General on public funding of non-government schools published in June 2009. [21]

Evidence of the misuse of the Needs policy was placed on record in paid Advertisements such as the following: 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. Advertisements since this time did not deal with the Schools Commission.

Recent News Releases which dealt with ghost pupils, ghost schools the checking of each school’s enrolment accuracy every 50 years and the report of the Commonwealth Auditor General are:

Press Release 246 at www.adogs.info/pr246.htm,

Press Release 256 at www.adogs.info/pr256.htm

 Press Release 270 at www.adogs.info/pr270.htm.

The evidence gathered by the DOGS over the last 40 years amounts to a national scandal.

5.   Lack of Accessibility to Publicly Funded Sectarian Schools

Figures published by the Australian Council for Educational Research show that 50 per cent of students in Independent secondary schools and 30 per cent of students in Catholic secondary schools in 2009 were from families in the highest socio-economic quartile compared to 16 per cent of students in government secondary schools. On the other hand, only 10 per cent of students in Independent schools and 16 per cent of Catholic students are from families in the lowest quartile compared to 35 per cent of government school students.

This social segregation is the direct result government funding policies which give priority to choice rather than reducing inequity in education. Government funding policies have given preference to private schools and pushed more and more higher income families into private schools.

As a result, society is becoming increasingly fragmented where people of different social backgrounds and religions are educated separately rather than together. This is hardly conducive to improving social understanding, tolerance and cohesion.

The Australian situation is exacerbated by the fact that discrimination on the basis of religion, marital status and sexual preference not to mention political preference and ability to pay is practiced against  both the parents of children and employees of sectarian schools.

In this Australia is far behind the United Kingdom which demands that faith schools have open enrolment policies as a condition of public funding.

The DOGS demand the withdrawal of all taxpayer funding of sectarian educational systems and/or schools which demand and receive exemptions from anti-discrimination laws on the basis of:

·        ethnicity

·        religious background

·        sexual preference

·        marital status

·        disability

·        or ability to pay

The DOGS also believe that public funding should not be allocated to sectarian educational systems and/or schools which engage in discrimination in employment practices, particularly with respect to:

·        gender

·        ethnicity

·        religious background or belief

·        sexual preference

·        disability

·        or marital status.

The DOGS demand that the allocations of all taxpayer funding be conditional on the removal of all exemptions from the Anti- discrimination Act for sectarian educational systems and schools.

 

Defence of Government Schools Recommendations:

·        Public moneys should not be given to sectarian institutions for the purpose of education.

·        If Public money IS given to sectarian institutions the exact amounts of both direct and indirect grants along with revenue forgone must be made accessible to all citizens and taxpayers.

·        If public money IS given to sectarian institutions then those institutions must be accountable for every cent.

·        If public money IS given to sectarian institutions for the purpose of education then a proper oversight of all aspects (eg enrolments) must be undertaken.

·        NO public money should be allocated to any institution that requires, demands or receives any special exemption from the laws of Australia.

·        Any school that receives public funds should not be permitted to practice discrimination on any basis whatsoever.

 

 

 

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[1]  See Page 15 of this submission

[2] See Save our Schools  Media Release, ‘Another Nail in the School Voucher Coffin,  April 1, 2011 www.saveourschools.com.au

 

[3] DOGS note that in development areas in Victoria this is not always the case. For example in Mernda, Victoria, there are three sectarian secondary schools and an application for a Muslim Shia school P-12 in the area, but, as yet, no public secondary school and only one small public primary school sharing facilities with a Catholic school.

[4] 2005 information from BRW article “God’s Business, June 2006 plus 20%

[5] 10% of estimated Catholic Church revenue

[6] 2005 information from BRW article “God’s Business, June 2006 plus 50%

 

[7] Assumes Catholic assets same ratio of total (40.8%) as of revenue

[8] 30% of estimates revenue

[9] Assumes 10% realised CG from asset holdings, property plus shares.

[10] 2005/06 budget forward estimates

[11] One third of $90 million announced over three years

[12] 2007 Budget Papers (90% of total non-govt funding  of $6.256 billion)

 

[13] SMH article as above estimate of NSW funding x 3

[14] Media Releases

[15] 2007 Budget papers

[16] Govt Media plus Budget Papers

[17] Based on Treasury figures x 3 for the whole country

[18] Pro-rated on above

[19] Pro-rated on above

[20] Pro-rated on above against Association of Councils source

[21] Auditor-General Audit Report No 45 2008-9 Performance Audit, Funding for Non-Government Schools