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: the demountable classrooms. This was in Brisbane in summer, no
Speaker 2: air con roasting, so nothing like the sort of facilities
Speaker 2: that we've seen at Scott's College.
Speaker 3: From Swarts Media, I'm Daniel James. This is seven.
Speaker 1: Am, Mike's second is the national correspondent for the Saturday
Speaker 1: Paper and a proud State schoolboy. I asked him in
Speaker 1: an observed question because we're in an observed situation all
Speaker 1: of our own making the divide between Australia's richest schools
Speaker 1: and our poorest keep getting worse. Mike has looked into
Speaker 1: the void and what he found was a system where
Speaker 1: rich parents are able to leverage huge tax breaks through
Speaker 1: charitable donations to their child's school, all in order to
Speaker 1: build facilities of feudal king would be happy with. It's
Speaker 1: a practice that goes way back, and many argue is
Speaker 1: outdated today calls and overhaul of the charitable giving system
Speaker 1: that delivers some kids' castles.
Speaker 3: It's Friday, April eight eight. This episode was originally published
Speaker 3: in July last year.
Speaker 1: Mike, you've been looking into a big redevelopment plan for
Speaker 1: Scotts College, a particularly wealthy private school in Sydney's Bellevue Hill.
Speaker 1: What 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 4: So Scott's Review Hill has just spent almost eighty million
Speaker 4: dollars on knocking down their library and building a Scottish
Speaker 4: 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 5: It is as gaudy and tacky as those gold open
Speaker 5: necked Gucci shirts that people wear with the gold chains
Speaker 5: and everything.
Speaker 4: 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 5: Now it's cost the school three times what they thought
Speaker 5: it originally would. So whoever the project managery should be
Speaker 5: clearly highly embarrassed at the incompetency going.
Speaker 2: If you're going to build a Scottish arsele 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: I 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 inequity between students, especially when they pride themselves
Speaker 1: on being the party of the fair.
Speaker 2: Go It's a very good question, and you're entirely right.
Speaker 2: The contrast between the elite private schools and state schools
Speaker 2: is ex straordinary, you know, very stark. The Australian Education Union,
Speaker 2: which represents public school and early childhood and Tafe teachers
Speaker 2: and staff, pointed out in a recent report that you know,
Speaker 2: while Scott's is building its Scottish Baronial library, elsewhere in
Speaker 2: New South Wales, state students so taking lessons in demountable classrooms.
Speaker 2: So that's one indicator. Another thing that the AEU did
Speaker 2: in its study, it looked at capital works expenditure in
Speaker 2: Australian schools and reported that in twenty twenty one, the
Speaker 2: amount spent by just five elite private schools for the
Speaker 2: benefit of their two hundred and ninety four students was
Speaker 2: greater than the total spent by three three hundred and
Speaker 2: seventy two public schools who were trying to educate almost
Speaker 2: eight hundred and fifty thousand kids. So eighty two times
Speaker 2: as much per student on capital works was the way
Speaker 2: it worked out. The inequity is outrageous. And now the
Speaker 2: Productivity Commission, in a major report to government on how
Speaker 2: to reform the entire charitable philanthropic sector has recommended that
Speaker 2: the tax break for private school building funds should be scrapped.
Speaker 3: 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, they were far less
Speaker 2: well funded, and of course, back in those days, education
Speaker 2: was solely the response disability of the states. So the
Speaker 2: decision happened at a time also when there was considerable
Speaker 2: sectarian divide in the country. There was opposition to government
Speaker 2: funding for non government schools, and there was even uncertainly
Speaker 2: about whether the federal government should be involved at all
Speaker 2: in education. The federal government did get involved, and a
Speaker 2: decade later the Commonwealth began providing capital funding for non
Speaker 2: government as well as government schools, So that was back
Speaker 2: in the mid sixties. But here's the thing, the tax
Speaker 2: break advantage of private schools continued. In nineteen seventy, the
Speaker 2: Commonwealth began giving recurrent funding to non government schools, four
Speaker 2: years i might add before it started providing recurrent funding
Speaker 2: to state schools, and still the non government schools kept
Speaker 2: getting a tax deduction for building funds. So we're in
Speaker 2: this situation where Australia has two levels of government funding schools.
Speaker 2: To a different degree, we have ninety percent of state
Speaker 2: and territory funding for education goes to government schools, and
Speaker 2: more than sixty percent of the corresponding federal funding goes
Speaker 2: to non government store We're talking big bucks here. This year,
Speaker 2: recurrent funding from the federal government for schools totaled something
Speaker 2: like twenty nine billion dollars, and only about a third
Speaker 2: of that, that's eleven point three billion, goes to government schools,
Speaker 2: notwithstanding the fact that they educate almost two thirds of students.
Speaker 2: Catholic 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 3: 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 too. Now, this is a major
Speaker 2: new report from the Productivity Commission. It went to a
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: Commission found was that there was a trade off going
Speaker 2: on whereby people were kicking into building funds which the
Speaker 2: kids great facilities, but also meant that they could reduce
Speaker 2: 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 DGR 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 3: 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 3: So has the government respondent? What are they going to
Speaker 3: do with anything? 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 reports 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.
Speaker 1: Consulted widely is one way of putting it. What does
Speaker 1: it say 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 to disproportionately from
Speaker 2: non government school backgrounds, and overwhelmingly both sides of politics
Speaker 2: send 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 state schools 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 1: Field, Mike, thank you for your time, great pleasure. Also
Speaker 1: in the news, the company behind the Bertuda Advocate has
Speaker 1: been running a podcast strategy for Prime Minister Anthony Alberinsi.
Speaker 1: The ABC is revealed. While a spokesperson of Labor said
Speaker 1: they have not paid content creators, they did confirm they'd
Speaker 1: ask them a teena media to provide advice on what
Speaker 1: podcast the Prime Minister should go on. Podcast appearances been
Speaker 1: a key part of Anthony Alberanesi's re election campaign in
Speaker 1: a bid to appeal to younger voters, and the detection
Speaker 1: of two chemical compounds on a giant planet one hundred
Speaker 1: and twenty four light years from Earth, are the strongest
Speaker 1: evidence to date of life beyond our Solar system. According
Speaker 1: to scientists, observations of a planet known as K two
Speaker 1: eighteen B appear to show chemicals that on Earth are
Speaker 1: only known to be reduced by life. The compounds were
Speaker 1: detected using the James Webs based telescope, with a scientist
Speaker 1: responsible for the discovery saying they now must question whether
Speaker 1: the signal is real and what it means if it is.
Speaker 3: I'm Daniel James. This is seven am. Enjoy your Easter break.