How the Catholic school system takes from the poor to give to the rich

By Inga Ting, Katia Shatoba and Alex Palmer

Digital Story Innovation Team

Updated 2 Sep 2020, 15:15pm

Published 2 Sep 2020, 5:05am

State and federal government funding for Catholic system schools in NSW — amounting to $2.8 billion in 2020 — is calculated based on individual schools but delivered as a lump sum payment to Catholic Schools NSW (CSNSW), the sector’s administrative body for school funding.

CSNSW uses its own “needs-based” model to distribute the funding to each of the state’s 11 dioceses, which, in turn, use their own “needs-based” models to allocate the funds to individual schools.

The details of these distributions have long been kept secret, despite the Education Act requiring system distribution models to be “transparent and publicly available”.

‘The smoking gun’

The documents uncover for the first time the calculations used by CSNSW and its predecessor, the Catholic Education Commission of NSW (CECNSW), to distribute government funding among the state’s 420 or so Catholic primary schools.

Containing data stretching back to 2015, they include internal analyses and proposals, presentations, emails and working papers prepared by CSNSW or CECNSW for the 11 bishops of NSW and senior staff at diocesan education offices.

Some documents have been labelled “Confidential”, “Commercial-in-confidence” or “Confidential draft” and include comments from Catholic schools office staff.


Adrian Piccoli, director of the University of NSW’s Gonski Institute for Education, described the documents as “explosive”.

“This is the smoking gun [showing] how the Catholic system has hoodwinked governments for years,” said Professor Piccoli, who was also the NSW education minister from 2011 to 2017.

“You just think: ‘Why do they even write this down?’ ... I’m gobsmacked.”

CSNSW CEO Dallas McInerney defended the model, saying the amount redistributed was “a tiny fraction” of the total pool.

“The aim is to make the low fee offering as ubiquitous as we possibly can right across NSW,” he said.

However, the documents suggest the transfer of government funds from lower-SES to higher-SES schools has been the basis of the Catholic system’s distribution model for primary schools since at least 2015.

Since 2020, the socio-economic status (SES) of a school has been based on the median income of parents and determines their capacity to contribute.

According to a draft proposal, CSNSW’s 2020-23 distribution model gives three times more government funding to the system’s highest-SES primary schools than they are entitled to under the Australian Education Act (AEA).

Mr McInerney confirmed that this accurately describes the current model.

The extra money comes from the government funding intended for low- and middle-SES schools, which are mostly in outer Sydney or regional and rural NSW.

This allows schools in some of the state’s wealthiest areas to collect roughly one-third to half of the fees parents at those schools are estimated to be able to afford, the documents suggest.

Meanwhile, school fees in much poorer areas are set up to two or three times above those parents’ “capacity to contribute” under the Australian Education Act.

A regional-metro divide

The dioceses benefiting most from this model are Sydney and Broken Bay. (Broken Bay diocese encompasses Sydney’s Northern Beaches and North Shore, as well as the Central Coast.)

By 2023, wealthier dioceses will have gained an estimated $309 million at the expense of poorer dioceses.

Government funding diverted ($M), 2015-23


They gain at the expense of regional and rural dioceses, including Armidale, Wagga Wagga, Wilcannia-Forbes and Bathurst.

Piecing together data from the documents, the ABC estimates that between 2015 and 2023, Catholic school authorities will have diverted some $309 million in government funding from poor and middle-income dioceses to the state’s wealthiest dioceses.

“The people who should be really angry about this are the parents who send their kids to low-SES Catholic schools, particularly in regional New South Wales,” Professor Piccoli said.

“The money their kids are attracting to the system is actually being siphoned off to go to wealthier schools, to keep the fees down for people who live in [the wealthier Sydney suburbs of] Gordon and Killara.”

Mr McInerney initially told the ABC the redistribution was “inside Sydney metropolitan schools, so it’s not ... a rural to metro redistribution at all.”

Poorer dioceses will have lost an estimated $3,500 per student, on average, over nine years.

Government funding diverted (per student), 2015-23


However, he later said that $21 million would be transferred to the Sydney and Broken Bay dioceses in 2020: $15 million from the “non-rural” dioceses of Parramatta, Wollongong, Maitland-Newcastle and Lismore, and $6 million from the remaining five “rural” dioceses.

“What we’re talking about is about half of 1 per cent redistribution from a pool of almost $3 billion,” Mr McInerney said, adding that the most government funding any one diocese would lose in 2020 was 1.2 per cent.

The ABC supplied CSNSW with a detailed spreadsheet of figures compiled from the documents.

Mr McInerney said CSNSW estimated the redistribution over the nine years to 2023 was “closer to $200 million” and confirmed the annual amounts redistributed from 2018-23.

The ABC calculates Broken Bay will have been given 10 per cent more than its intended government funding.

Government funding diverted (%), 2015-23


However, he declined to share further figures with the ABC.

CSNSW is not contravening any laws. Both CSNSW and the dioceses are permitted to redistribute government funding, providing the distribution is needs-based, has loadings for disadvantage, and is “publicly available and transparent”. (More on this later.)

However, experts say the documents reveal CSNSW’s intention to subvert the aim of public policy.

“[These documents] provide clear evidence that NSW Catholic funding distribution is designed to avoid the goal of public policy: that parents who choose non-government schools should pay in line with their income,” education policy consultant Peter Goss said.

And the problem may go well beyond NSW, data shows.

Separate figures compiled by the ABC from the My School website reveal parent contributions at high-SES schools in other states and territories are even lower, on average, than in NSW.

“State-level patterns show CSNSW is not the only system subsidising high-SES primary schools,” Dr Goss said.

“Queensland and NSW have the most obvious cross-subsidy but fees in the ACT and Victoria are also higher than you would expect for low-SES schools, and lower than you would expect for high-SES schools.”