Parents and alumni contributed more than $1.1 billion towards private school capital projects in 2022,as many of Sydney’s high-fee institutions embarked on major capital works,including upgrading theatres,sports facilities and expanding foundations.
A Productivity Commission draft report recommends scrapping tax deductions for private school building funds.Louie Douvis
A draft report released by the Productivity Commission,,released late last year,has recommended stripping deductible gift recipient status from school building funds and not extending it to childcare,aged care and some religious organisations.
Parent contributions made to school building funds have long attracted tax deductions,with the report noting the system was set up in the mid-1950s when government support for private schools was “very limited”.
“Since then,government support for non-government schools has expanded considerably,” the report said. “There are some charitable activities where the reasons for deductible gift recipient status have lessened over time.”
But Independent Schools Australia chief executive Graham Catt said the report has sparked a “significant level of anxiety” across the sector,warning the proposed changes would heap pressure on lower-fee schools.
“Independent schools are diverse and half are smaller suburban schools charging fees of less than $5500,” Catt said.
“If it’s harder for families to contribute to building classrooms it will shift more financial burden onto these families via fee rises.”
Productivity commission deputy chair Alex Robson told theHerald that while there is a “role for government supporting school infrastructure,the question is whether tax deductable donations are the best way to do that”.
Building funds for primary and high schools and religious education would be the main entities that would have their tax deductibility status scrapped under the changes floated.
The principal at Waverley College said donations are vital for building new facilities and maintaining classrooms.James Brickwood
“There is a material risk in some cases that donors could convert a tax-deductible donation into a private benefit when a school building fund is set up purely to benefit the people going to the school,with no prospect of wider community benefit,” Robson said.
As enrolments have risen and competition intensified,some of Sydney’s wealthiest private schools have boosted fundraising drives and hired development directors and to run school foundations. In harnessing support from alumni and parents,,some including Olympic-sized pools,theatres,and one with a student centre designed to mimic a.
About 20 NSW private schools raised $340 million from parents and alumni over the past six years,according to aHerald analysis,with the highest donations at Scots,Cranbrook and Shore. The highest-fee schools do not qualify for capital grants from the government.
Waverley College principal Graham Leddie said with one-third of all students at non-government schools,donations are vital to maintain buildings.
“In light of the reduced government funding,and to ensure maintenance costs do not have to be absorbed by parents,we recently hired a foundation officer to help find alternative revenue sources,” he said,adding that college buildings are also used by sporting clubs and holiday camp providers.
Strathfield’s Santa Sabina College has also appointed a new development director to fundraise for scholarships,state-of-the-art facilities and a new sports centre.
But at the new Leppington Anglican College in Sydney’s south-west,principal Michael Newton said his school rarely receives parent donations for capital works,but is in “desperate need of government grants” to build the kindergarten to year 12 campus.
“For a low-fee school in a growth area there aren’t many levers to pull to manage huge construction costs,” he said.
Catholic Schools NSW chief executive officer Dallas McInerney said the commission’s report was “misguided and lacked understanding how charitable giving operates in schools. The government wants to,and this takes that in another direction. We will be looking for a significant correction in final report.”
The principal at low-fee Namoi Valley Christian School,Peter Hendersen,is also concerned changes could result in fewer donations. The small campus in north-west NSW has 40 per cent of students from the lowest quarter socio-economic advantage.
Robson suggested that other avenues for capital funding for schools could come in the form of grants,an alternative tax deduction,or an arms-length entity that could manage donated funds.
Some building funds,childcare and aged care that are classified as “public benevolent institutions” would retain their deductable gift recipient status.
Principal at Trinity Grammar,Tim Bowden,said removing tax deductibility status from school building funds would not increase tax revenue,rather it would “simply wipe out philanthropic giving” for private schools.
A spokesman for the King’s School said it receives “less funding per student,which is only fitting. We make up the difference with fees and donations. Unfortunately,this is yet another example of the continuing attack on the independence of non-government schools and their legitimate autonomy in determining how best to meet the needs of their communities and their significant role in the education sector.”
Scots College and Cranbrook at Bellevue Hill have recently redeveloped school facilities.Sydney Morning Herald
As part of a plan to double charitable giving by 2030,assistant minister for charities Andrew Leigh said the federal government asked the Productivity Commission “to tell us how we could make it easier for Australians to give with confidence and trust to the causes they support”.
Leigh said draft recommendations will guide the commission’s consultations,and he will be listening closely to the commentary from charities,donors and volunteers. The final report is due to be handed to the federal government later this year.
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