Speaker 1: Mike, how large was the castle at your high school
Speaker 1: growing up?
Speaker 2: I'm afraid I'm at State school boy. There was no castle,
Speaker 2: you know. I spent a certain amount of time in
Speaker 2: demountable classrooms. This was in Brisbane in summer, no air
Speaker 2: con roasting, so nothing like the sort of facilities that
Speaker 2: we've seen at Scott's College.
Speaker 1: From Sports Media, I'm Daniel James. This is seven Am.
Speaker 1: Mike's second is the national correspondent for the Saturday Paper
Speaker 1: and a proud State school boy. I asked him an
Speaker 1: observed question because we're in an observed situation all of
Speaker 1: our own making the divide between Australia's richest schools and
Speaker 1: our poorest keep getting worse. Mike has looked into the
Speaker 1: void and what he found was a system where rich
Speaker 1: parents are able to leverage huge tax breaks through charitable
Speaker 1: donations to their child's school, all in order to build
Speaker 1: facilities of feudal king would be happy with. It's a
Speaker 1: practice that goes way back, and many argue is outdated
Speaker 1: today calls for and overhaul of the charitable giving system
Speaker 1: that delivers some kids' castles. It's Thursday, July twenty five. Mike,
Speaker 1: you've been looking into a big redevelopment plan for Scotts College,
Speaker 1: a particularly wealthy private school in Sydney's Bellevue Hill. What
Speaker 1: can you tell me about it?
Speaker 2: Yeah, for sure, it's been quite a saga. Back in
Speaker 2: twenty nineteen in this elite boys school in Sydney announced
Speaker 2: that it was going to have a new library. And
Speaker 2: they had a perfectly serviceable, functional library, but they decided
Speaker 2: it needed to be upgraded for quote contemporary teaching unquote.
Speaker 3: So Scott's at Bellevue Hill has just spent almost eighty
Speaker 3: million dollars on knocking down their library and building a
Speaker 3: Scottish baronial castle.
Speaker 2: The design they went with was made to look like
Speaker 2: a Scottish castle, you know, with turrets and battlements and
Speaker 2: all the rest of it. And it was supposed to
Speaker 2: be opened in twenty twenty one.
Speaker 4: It is as gaudy and tacky as those gold open
Speaker 4: necked Gucci shirts that people wear with the gold chains
Speaker 4: and everything.
Speaker 1: Honestly, talk about ostentatious.
Speaker 2: Things didn't quite go to plan, and so all these
Speaker 2: years later the library is still under construction due to
Speaker 2: various delays, and apparently it was quite difficult for them
Speaker 2: to acquire sandstone and slate from Scotland.
Speaker 4: Now it's cost the school three times what they thought
Speaker 4: it originally would, So whoever the project managery should be
Speaker 4: clearly highly embarrassed at the incompetency going.
Speaker 2: If you're going to build a Scottish castle, mate, you've
Speaker 2: got to have Scottish slate, right, eighty.
Speaker 1: Million dollars for a library that is extraordinary by any standard,
Speaker 1: but particularly Australian standards in twenty twenty four, How did
Speaker 1: Scott's fund this?
Speaker 2: Well, actually it's not that extraordinary, I hate to say,
Speaker 2: but you know there's a bunch of stories of opulent
Speaker 2: facilities at elite private schools. You know, these stories are legiant,
Speaker 2: wealthy parents and alumni kick in money to build these
Speaker 2: new facilities. Fewer perhaps as conspicuously kitchy as the library
Speaker 2: at Scots, but you know there's any number of indoor
Speaker 2: swimming pools, and you know all sorts of sporting facilities
Speaker 2: and other stuff that they have that are funded through
Speaker 2: these tax deductible building funds. So you know, I guess
Speaker 2: mocking Scots for you know, building this outlandish Scottish castle
Speaker 2: for their boys seems like pretty easy sport, but really
Speaker 2: it's not funny. When you decide to donate to a
Speaker 2: private school you're a wealthy parent or grandparent, or old
Speaker 2: boy or old girl, you get a tax break for it.
Speaker 2: You can claim up to forty seven cents in the
Speaker 2: dollar because kicking into private school building funds is considered
Speaker 2: to be a charitable action, and so it attracts what
Speaker 2: they call deductible gift recipient status DGR status. So as
Speaker 2: things stand now, donors to non government schools who are
Speaker 2: overwhelmingly wealthy parents are benefiting to the tune of some
Speaker 2: one hundred million dollars per year at the expense of
Speaker 2: government revenue, which ultimately means other taxpayers, most of whom
Speaker 2: could never afford to send their children to elite private schools.
Speaker 1: We've seen public schools around the country that don't have
Speaker 1: air conditioning, that don't have grass, they have demountable classrooms,
Speaker 1: They definitely don't have castles, that's for sure. The inequity
Speaker 1: is pretty stark. So how is the labor government justifying
Speaker 1: having such in equity between students, especially when they pride
Speaker 1: themselves on being the party of the fair go It's.
Speaker 2: A very good question, and AI right, the contrast between
Speaker 2: the elite private schools and state schools is extraordinary, you know,
Speaker 2: very stark. The Australian Education Union, which represents public school
Speaker 2: and early childhood and tafe teachers and staff, pointed out
Speaker 2: in a recent report that you know, while Scott's is
Speaker 2: building its Scottish Baronial library, elsewhere in New South Wales,
Speaker 2: state students so taking lessons in demountable classrooms. So that's
Speaker 2: one indicator. Another thing that the AEU did in its study,
Speaker 2: it looked at capital works expenditure in Australian schools and
Speaker 2: reported that in twenty twenty one, the amount spent by
Speaker 2: just five elite private schools for the benefit of their
Speaker 2: ten two hundred and ninety four students was greater than
Speaker 2: the total spent by three three hundred and seventy two
Speaker 2: public schools who were trying to educate almost eight hundred
Speaker 2: and fifty thousand kids. So eighty two times as much
Speaker 2: per student on capital works was the way it worked out.
Speaker 2: The inequity is outrageous and now the Productivity Commission, in
Speaker 2: a major report to government on how to reform the
Speaker 2: entire charitable philanthropic sector, has recommended that the tax break
Speaker 2: for private school building funds should be scrapped.
Speaker 1: So will the government act. That's after the break mark.
Speaker 1: The inequity between government and elite private schools has become
Speaker 1: increasingly entrenched. It's easy to see when you compair a
Speaker 1: Scottish castle to a demandable. So how do we get here?
Speaker 2: Let me take you back in history, because the Productivity
Speaker 2: Commission did quite a good job of that in its report.
Speaker 2: The decision to allow a tax deduction for donating to
Speaker 2: building funds for non government schools was taken seventy years ago,
Speaker 2: back in nineteen fifty four. And back then, of course
Speaker 2: such schools were fewer in number, far less well funded,
Speaker 2: and of course, back in those days, education was solely
Speaker 2: the responsibility of the states. So the decision happened at
Speaker 2: a time also when there was considerable sectarian divide in
Speaker 2: the country. There was opposition to government funding for non
Speaker 2: government schools, and there was even uncertainly about whether the
Speaker 2: federal government should be involved at all in education. The
Speaker 2: federal government did get involved, and a decade later the
Speaker 2: Commonwealth began providing capital funding for non government as well
Speaker 2: as government schools. So that was back in the mid sixties.
Speaker 2: But here's the thing. The tax break advantage of private
Speaker 2: schools continued. In nineteen seventy, the Commonwealth began giving recurrent
Speaker 2: funding to non government schools, four years i might add
Speaker 2: before it started providing recurrent funding to state schools, and
Speaker 2: still the non government schools kept getting a tax deduction
Speaker 2: for building funds. So we're in this situation where Australia
Speaker 2: has two levels of government funding schools. To a different degree,
Speaker 2: we have ninety percent of state and territory funding for
Speaker 2: education goes to government schools, and more than sixty percent
Speaker 2: of the corresponding federal funding goes to non government schools.
Speaker 2: We're talking big bucks here. This year, recurrent funding from
Speaker 2: the federal government for schools totaled something like twenty nine
Speaker 2: billion dollars, and only about a third of that, that's
Speaker 2: eleven point three billion, goes to government schools, notwithstanding the
Speaker 2: fact that they educate almost two thirds of students. Catholic
Speaker 2: schools get about ten billion, and other non government schools,
Speaker 2: which is where of course the really elite schools tend
Speaker 2: to be concentrated, they got just over eight billion dollars.
Speaker 2: And of course, despite all this, the tax deduction for
Speaker 2: contributing to private school building funds continues despite the fact
Speaker 2: that the circumstances that pertain seventy years ago no longer apply.
Speaker 1: Have there been calls to change this arrangement.
Speaker 2: Well, yes they have for a long time, from education
Speaker 2: unions from others. It was raised by some of the
Speaker 2: feeder reports at the Gonski Report a decade and more ago.
Speaker 2: But just last week we found out that the Productivity
Speaker 2: Commission has recommended it two. Now, this is a major
Speaker 2: new report from the Productivity Commission. It went to the
Speaker 2: whole charitable sector, but it specifically recommended that thousands of
Speaker 2: charitable funds that benefit private schools there's something like five
Speaker 2: thousand of them and their wealthy donus should be stripped
Speaker 2: of their tax deductible status. It found that the building
Speaker 2: funds that are set up by the non government schools
Speaker 2: to pay for capital works do not meet the appropriate
Speaker 2: criteria for charitable activity and they should not be accorded
Speaker 2: what they call deductible Gift Recipient or DGR status. The
Speaker 2: Productivity Commission set out in some detail the criteria that
Speaker 2: should apply to be registered for DGR status, and they
Speaker 2: found essentially that the private schools didn't meet any of them.
Speaker 2: It's as simple as that, to give one example of
Speaker 2: one of the criteria, No private benefit should attached to
Speaker 2: charitable giving. But in the case of private schools, what
Speaker 2: happens is if you give to these building funds, you
Speaker 2: get a tax deduction for it. If you pay school fees,
Speaker 2: you don't get a tax deduction. So what the Productivity
Speaker 2: commiss found was that there was a trade off going
Speaker 2: on whereby people were kicking into building funds which gave
Speaker 2: the kids great facilities, but also meant that they could
Speaker 2: reduce the fees they charged for access to those facilities.
Speaker 1: We're seeing the tax system used to thinly veil middle
Speaker 1: to upper class welfare in this country. How does the
Speaker 1: private school's experience compare with other charities.
Speaker 2: Well, that's another interesting aspect of this report from the
Speaker 2: Productivity Commission. They found that other, more needy and more
Speaker 2: worthy in their view, charitable endeavors miss out under the
Speaker 2: existing DGI regime. There is something like sixty thousand charities
Speaker 2: in Australia, but only about forty percent of those have
Speaker 2: tax deductible status. And the report explicitly says, and I'll
Speaker 2: quote it again, the DGR system creates inefficient, inconsistent and
Speaker 2: unfair outcomes for donors, charities and the community.
Speaker 1: So whack.
Speaker 2: You know, you could hardly get a more swinging indictment
Speaker 2: of the current regime. And of course they chose the
Speaker 2: private schools as the exemplar of all that was wrong.
Speaker 2: So the nation's five thousand odds school building funds just
Speaker 2: serve as a case study of the randomness and the
Speaker 2: incoherence of the current system.
Speaker 1: So has the government respondent? What are they going to
Speaker 1: do with anything?
Speaker 5: Well?
Speaker 2: I called the Assistant Minister for Competition, Charities and Treasury,
Speaker 2: Andrew Lee, and asked him about this last week and
Speaker 2: he said the government was quote open to considering all
Speaker 2: the report's recommendations, bar one, and that one recommendation that
Speaker 2: they have said they won't pursue is the recommendation around
Speaker 2: private school building funds. He said, to quote him, that
Speaker 2: was in the interim report. We consulted widely on it
Speaker 2: and we have opted not to pursue that consulted widely.
Speaker 1: He's one way of putting it. What does it say
Speaker 1: that the government won't even consider changes to this?
Speaker 2: To be frank, the private school lobby in Australia is
Speaker 2: a bit like the gun lobby in the United States,
Speaker 2: it's hugely politically powerful. It is protected by rich, well
Speaker 2: connected parents who are very keen to protect the privilege
Speaker 2: of their kids. Furthermore, our politicians come disproportionately from non
Speaker 2: government school backgrounds, and overwhelmingly both sides of politics send
Speaker 2: their own children to non government schools. Despite all this,
Speaker 2: all the research shows that private schools actually serve to
Speaker 2: make Australia not only are less equal, but a less
Speaker 2: well educated society overall. If you look at the international
Speaker 2: comparisons of educational attainment, Australia has one of the largest
Speaker 2: gaps in the world between our top achievers who are
Speaker 2: globally competitive, and the educationally underprivileged who are falling way
Speaker 2: behind and falling further behind over time. And those tend
Speaker 2: to go to state schools in low SS areas, So
Speaker 2: that's an indictment. I worry also that they also make
Speaker 2: this country less socially cohesive, because you know, rich kids
Speaker 2: are cloistered, poor kids are ghettoized, and I fear we're
Speaker 2: in a vicious cycle whereby middle class parents feel compelled
Speaker 2: to pay for private schools simply because states rules are
Speaker 2: so poorly resourced. And yet we see wealthy parents getting
Speaker 2: a tax break for building opulent facilities. I'm with the
Speaker 2: Productivity Commission. I think it's outrageous and it should be scrapped. Indeed,
Speaker 2: if we're up to me, I would do as they
Speaker 2: do in some other countries and say, well, you're welcome
Speaker 2: to have a private school, but if you charge fees,
Speaker 2: you don't get government money. If you don't charge fees,
Speaker 2: you get the same resourcing as state schools. So level
Speaker 2: the playing.
Speaker 5: Field, Mike, thank you for your time, great pleasure. Also
Speaker 5: in the news.
Speaker 1: Today, tech billionaire Elon Musk has denied reports that he
Speaker 1: was planning to donate forty five million dollars US a
Speaker 1: month to an organization focused on Donald Trump's reelection must
Speaker 1: The nile comes days after Jay Biden withdrew from the
Speaker 1: presidential race, with his vice president Krmala Harris now holding
Speaker 1: enough delegates to claim the Democratic nomination in August. Musk's organization,
Speaker 1: America Pack, can receive unlimited donations to put towards an
Speaker 1: election campaign, circumventing the limits imposed on donations directly to
Speaker 1: individuals like Trump and according to a report released by KPMG,
Speaker 1: Australia's fertility rate is the lowest it's been since two
Speaker 1: thousand and six, and it is continuing to fall. The
Speaker 1: report sites increased cost to living pressures and the housing
Speaker 1: affordability crisis as the main contributing factors for people choosing
Speaker 1: to have fewer children or no children. KPMG says that
Speaker 1: there hasn't been such a drop in fertility since the
Speaker 1: oral contraception pill was introduced to Australia in the nineteen seventies.
Speaker 1: I'm Daniel James. This is seven am. See you tomorrow.