recurrent funding from each of the state and federal governments, the amount collected in fees and other charges, and

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1 Wealthy private school building spending spree ripped off from public recurrent funding Media package: 22 January 2015 John Kaye Greens NSW MP I:\MLC Kaye\Media\Media Packages\MP15\MP150122_Private school development spending spree ripped off from public recurrent funding.docx The Greens have identified 62 elite private schools in NSW that divert all of their state recurrent funding to new buildings and facilities. In 2012, the latest year for which data is currently available on the My School website, all of the $85 million given by the state government to schools such as St Catherine's in Waverley, Newington College and Cranbrook, supposedly to make them more affordable, was spent on extravagant development projects, according to Greens NSW MP John Kaye. Only 30 percent of the $270 million of recurrent funding provided to these 62 wealthy private schools by both the state and federal governments in 2012 was spent on operations. The lion's share of total public funding, $189 million, was diverted to capital works. The result has been an arms race between schools to spend ever greater amounts on luxury facilities that attract parents who are prepared to pay higher fees. Fuelled by generous public funding, the elite institutions compete for market share amongst the high net worth parents. Lower income households are shut out. The Greens' analysis of non government school spending was based on the most recent financial data on the MySchool website, which lists for each school in NSW: recurrent funding from each of the state and federal governments, the amount collected in fees and other charges, and the amount diverted from the operational budget into capital works and paying down debt on past capital works (referred to as "deductions"). The MySchool website entry for St Catherine's in Waverley (see Appendix 2) shows that the total recurrent budget was $30.34 million, made up of: $25.85 million in fees and other charges and fund raising activities, and $4.49 million in government recurrent funding ($2.88 million from the Commonwealth and $1.61 from the state). The school spent only $22.74 million of this money on operational activities. The remaining $7.61 million was diverted to future capital works and servicing debts on past capital works, according to the My School website. If the school had not been in receipt of government funding, it could have still met the $22.74 million operating budget, but would have had only $4.49 million left to divert to its capital budget. In effect, all of the public funding that was supposed to make the school more affordable has been diverted to the capital budget. St Catherine's has lodged a $62.5 million development application for a major redevelopment including a new aquatic centre, a "state of the art professional grade lyric theatre" and a research centre. (See appendix 1 for details)

2 At 2012 rates of diversion, the 15 year project will be entirely funded from the public purse, using money that was supposed to be spent on bringing down fees $m Figure 1: St Catherine's, Waverley, recurrent income and spending. St Catherine's is not on its own. MLC Burwood and SCECGS Redlands, together with St Catherine's, have lodged development applications with the NSW Department of Planning for more than $200 million of capital works. This is the equivalent cost of building ten public high schools from scratch. In 2012, each of these private schools diverted more than their state recurrent funding from their operational budgets into their capital works spending. (See Appendix 1 for details) MLC SCECGS St Cath's Total Commonwealth ($m) State ($m) Total public funding ($m) Diverted to capital ($m) Capital Project Cost ($m) Years to pay Note: "years to pay" is the number of years to pay for the project if public recurrent funding were the only source. Public school maintenance backlog: $548 million (p. 39) (NSW Auditor General: 'Financial Audit Volume Thirteen 2014, Focusing on Education and Communities', December 2014, The Department of Education has conducted its first Lifecycle Costing analysis of the maintenance and building renewal needs of public schools in NSW. Page 2 of 7

3 The new methodology found a $548 million backlog, which represents 2.3 percent of the total capital (replacement) value of schools. This is substantially higher than the Department's preferred value of 1.5 percent. Media comments Greens NSW MP John Kaye said: "Public funding that is supposed to be spent on bringing down private school fees is being used to build new luxurious facilities. "The effect of much of the state and federal funding going to wealthy non government schools is to fatten up their buildings and facilities and consequently drive up fees. "It is time for some honesty about the public subsidies to private schools. "NSW has long since passed the point where there is any credibility in the claim that public funding of private schools brings down fees. "Schools like St Catherine's, MLC and SCECGS Redlands are pouring all of the state funds that are supposed to support lower fees, into extravagant building projects. "Annual state funding of $4.9 million for these three schools is effectively entirely diverted into capital works, despite their extraordinary levels of wealth. "So secure is St Catherine's in its on going public funding that they can afford to embark on an extravagant $62 million rebuilding program. Over the 15 year Master Plan period, they will spend the equivalent of the cost of building three new public high schools. "St Catherine's spending on the new projects will, over the fifteen year period, be less than their public handouts. In effect, taxpayers are funding the development of a private school, while public education in the city's east is struggling to meet the demand. "Sydney's east has a looming crisis in public high school capacity, while St Catherine's spends $60 million to accommodate just 205 new students. Public education could spend the same money to purchase land and build high schools for at least 2,000 students. "This is public funds being used in an expensive and destructive arms race between exclusive private schools to lure in high net wealth families. "It is hard to argue that St Catherine's really needs a new pool. This is more about being seen to spend up big to show they offer more than SCEGGS or Ascham. "Cut off from the growth years of Gonski funding, it is public education that will pay the price. "The Abbott government's budget widened the gap between wealthy and the rest of the community. St Catherine's knows it will continue to be the beneficiary of public handouts, Dr Kaye said. For more information: John Kaye Page 3 of 7

4 Appendix 1: Three wealthy private schools spend $200 million at the public's expense St Catherine's Waverley: $62 m of luxury, ripped off from state and federal funding St Catherine's in Waverley has lodged a State Significant Development proposal that includes: Stage 1 Concept Approval for a Campus Master Plan, with works valued at $62.49 million Stage 2 Detailed Design Approval for a New Research, Performing Arts and Aquatic Centre (RPAC) (Stages 1A and 1B of the Campus Master Plan), costed at $33.6 million. According to their Development Application, the school's justification for the RPAC: Enhance the current educational curriculum for Sport/PDHPE by introducing an Aquatic Centre in place of the existing, aged outdoor pool Enhance the current educational curriculum for Performing Arts by providing a new state of the art professional grade lyric theatre which addresses the constraints of the existing "play box theatre within the Dame Joan Sutherland Centre (ie. small spectator gallery, insufficient back of house facilities, inadequate size to accommodate school performances etc) Introduce a new Research Centre which reflects a contemporary world leading teaching and learning environment for staff and K 12 students, equipped with a broad variety of leading edge and learning based technology within a diverse range of learning environments In 2012, St Catherine's redirected $2.3 m from their recurrent budget to future capital works and $5.3 million to repay past loans. The school received $1.6 million from the state in recurrent funding, none of which was apparently needed for the purpose for which it was given. The school also received $2.9 million in federal funding. St Catherine's average spending on the new projects will, over the fifteen year period, be less than their public handouts. In effect, taxpayers are funding the development of a private school, while public education in the city's east is struggling to meet the demand. MLC Burwood Senior School Centre: $33.9 m paid for by the public purse in 5 years MLC Burwood is seeking planning approval for $33.9 million (excluding GST) project which involves "demolition of six existing school buildings and residential dwellings at 31A and 33 Park Road, Burwood, and the carrying out of the following works: > construction of a new Teaching and Learning Building and a new Art Building; > alterations and additions to the existing year 6 building; > refurbishment of the Independent Learning Centre to create a seniors room and staff common room; > removal of 22 trees and replacement with 32 new trees; and > landscaping works including two large courtyards." School's justification for the proposed development is: "MLC school needs to redevelop existing senior school facilities to remove inefficient and old teaching spaces and to replace them with modern teaching spaces compatible with new models of teaching. Page 4 of 7

5 Key objectives of the proposed scheme update and improve current learning spaces to meet new models of teaching; improve staff spaces; de clutter the sit to increase usable open space; improve EDS performance and upgrade the site to achieve Building Code of Australia (BCA) and Disability Discrimination Act 1992 (DDA) compliance" In 2012, received $1.9 million from the State government and $4.8 million from the Commonwealth and diverted $6.5 million into capital works and debt funding. If MLC continues to divert almost all of its state and federal recurrent funding into capital works, the taxpayers will have entirely funded of the entire project in just over five years. SCECGS Redlands, Cremorne: $104 million, 20 years, mostly from public recurrent funding SCECGS Redlands has lodged a staged development application, over the next 2 to 20 years, for a concept proposal for its Redlands School Senior Campus comprising: > Stage 1 Monford Place Learning Hub; > Stage 2 Sports and Performing Arts Centre; > Stage 3 Redlands Hall, Lang Gym and Liggins Building refurbishment; > Stage 4 Humphery Learning Hub & Resource Centre; > Stage 5 car park and open landscaping; and > Stage 6 Adams Centre Extension. It is anticipated that the works will be progressively undertaken over the next 2 20 years. Estimated Capital Investment Value for the project (stages 1 6) is $103,964,000 The school's justification for the proposed development: Enable an excellent academic programme Support a fulfilling and diverse extra curricular experience. Create an inclusive, supportive and secure pastoral environment Attract and retain exceptional staff Achieve productive industry, community and parental partnerships Maintain a robust and flexible operational infrastructure Develop efficient, effective, expressive and environmentally sustainable facilities Embody an inclusive transparent and strong governance model SCECGS Redlands received $1.4 million from the NSW government and $2.2 million from the Commonwealth in recurrent funding. The school diverted $5.8 million to capital works and debt funding. All of the state and federal recurrent funding is absorbed by capital funding. Over the life of the project, at the 2012 rate of diversion, the taxpayer will effectively fund more than 68 percent of the total costs. If the school had received no funding from state and federal governments, it would have $3.6 million per year less to spend. However, it did not in 2012 need any of this money to service its operational needs. It is reasonable to therefore conclude that the public funding was entirely spent on capital works. Page 5 of 7

6 Appendix 2: MySchool financial data example Page 6 of 7

7 Appendix 3: Wealthy private schools that divert more than their recurrent state funding into capital works The attached table provides details of 62 wealthy private schools that divert more than their state funding amount into capital works. In this table Aus NSW GOV_TOT Fees+ Div Div from NSW Div from Tot %Divert Commonwealth government recurrent funding NSW government recurrent funding Total government recurrent funding (Aus + NSW) Total fees and other private revenue. That is the parental contribution. The amount diverted (referred to as "Deductions" on the MySchool site) Amount diverted from the NSW public funding (minimum of NSW and Div) Amount diverted from the total public funding (minimum of GOV_TOT and Div) Fraction of total public funding diverted (Div from Tot/GOV_TOT) The definition of "wealthy" used in this study is: ERI (old system) categories 1, 2 or 3 (with anomalous schools removed), or SES score of 110 or greater. Page 7 of 7

8 School TOWN Aus NSW GOV_TOT Fees+ Div Div from NSW Div from Tot % Divert Newington College Stanmore 5,980,455 1,949,455 7,929,910 41,822,830 8,170,514 1,949,455 7,929, % Pymble Ladies' College Pymble 4,616,832 2,927,341 7,544,173 53,957,732 12,253,067 2,927,341 7,544, % MLC Schl Burwood 4,829,817 1,863,173 6,692,990 27,409,496 6,545,481 1,863,173 6,545, % Knox Grammar Schl Wahroonga 3,991,449 2,404,818 6,396,267 55,042,119 15,261,769 2,404,818 6,396, % William Branwhite Clarke College Kellyville 8,698,042 3,508,598 12,206,640 14,539,314 6,202,958 3,508,598 6,202, % The Scots College Bellevue Hill 3,930,281 1,940,794 5,871,075 56,435,737 24,695,636 1,940,794 5,871, % Barker College Hornsby 4,221,684 2,893,022 7,114,706 50,607,081 5,443,418 2,893,022 5,443, % Stella Maris College Manly Manly 6,513,292 2,578,833 9,092,125 9,219,381 5,041,255 2,578,833 5,041, % St Ignatius' College Lane Cove 4,411,238 2,616,489 7,027,727 34,126,655 5,010,435 2,616,489 5,010, % Inaburra Schl Bangor 4,355,285 1,947,998 6,303,283 11,073,039 4,804,763 1,947,998 4,804, % Sydney Church of England Grammar Nth Sydney 2,698,385 1,800,349 4,498,734 40,782,941 9,530,811 1,800,349 4,498, % St Catherine's Schl Waverley 2,883,136 1,606,262 4,489,398 25,852,945 7,606,987 1,606,262 4,489, % St Aloysius' College Milsons Point 5,224,637 2,429,144 7,653,781 19,129,500 4,481,890 2,429,144 4,481, % Loreto Normanhurst Normanhurst 3,695,395 1,835,184 5,530,579 20,789,939 4,396,184 1,835,184 4,396, % The King's Schl Nth Parramatta 5,334,637 1,605,247 6,939,884 37,612,530 4,353,281 1,605,247 4,353, % Abbotsleigh Wahroonga 2,818,055 1,431,552 4,249,607 36,510,155 4,471,608 1,431,552 4,249, % St Luke's Grammar Schl Dee Why 2,860,451 1,377,042 4,237,493 14,934,019 4,707,269 1,377,042 4,237, % Cranbrook Schl Bellevue Hill 2,712,962 1,491,475 4,204,437 38,918,281 7,623,699 1,491,475 4,204, % Trinity Grammar Schl Summer Hill 7,487,395 2,341,389 9,828,784 43,305,870 4,006,804 2,341,389 4,006, % Sydney Grammar Schl Darlinghurst 2,456,997 1,297,797 3,754,794 36,811,034 5,623,882 1,297,797 3,754, % St Andrew's Cathedral Schl Sydney 3,279,044 1,216,392 4,495,436 24,771,038 3,674,694 1,216,392 3,674, % Wenona Schl Ltd Nth Sydney 2,145,291 1,510,625 3,655,916 25,280,018 5,147,630 1,510,625 3,655, % Queenwood Schl for Girls Ltd Mosman 2,231,412 1,416,815 3,648,227 20,969,709 4,823,184 1,416,815 3,648, % SCECGS Redlands Cremorne 2,162,708 1,394,107 3,556,815 35,824,038 5,772,981 1,394,107 3,556, % Monte Sant' Angelo Mercy College Nth Sydney 5,151,169 2,365,900 7,517,069 19,165,738 3,395,812 2,365,900 3,395, % Roseville College Roseville 2,041,870 1,344,581 3,386,451 17,305,915 5,392,359 1,344,581 3,386, % Tangara Schl for Girls Cherrybrook 2,383,902 1,369,038 3,752,940 6,118,733 3,275,722 1,369,038 3,275, % Newcastle Grammar Schl Newcastle 3,652,877 1,356,651 5,009,528 12,563,791 3,186,714 1,356,651 3,186, % Hunter Valley Grammar Schl Ashtonfield 5,562,840 1,605,266 7,168,106 9,931,304 3,157,788 1,605,266 3,157, % Ascham Schl Ltd Edgecliff 2,046,116 1,050,850 3,096,966 29,404,203 4,753,779 1,050,850 3,096, % Ravenswood Schl for Girls Gordon 1,927,191 1,168,408 3,095,599 24,725,330 7,189,268 1,168,408 3,095, % Loreto Kirribilli Kirribilli 5,406,922 2,298,850 7,705,772 15,664,746 3,037,471 2,298,850 3,037, %

9 School TOWN Aus NSW GOV_TOT Fees+ Div Div from NSW Div from Tot % Divert Brigidine College St Ives St Ives 5,008,570 2,136,099 7,144,669 12,121,385 2,997,865 2,136,099 2,997, % Moriah College Bondi Junction 3,777,293 2,324,619 6,101,912 22,298,547 2,947,320 2,324,619 2,947, % Pacific Hills Christian Schl Dural 4,796,016 2,332,879 7,128,895 9,601,507 2,726,786 2,332,879 2,726, % SCEGGS Darlinghurst Darlinghurst 1,759,495 1,050,052 2,809,547 25,293,489 2,700,439 1,050,052 2,700, % Kambala Rose Bay 1,741, ,044 2,699,356 22,192,633 2,694, ,044 2,694, % Danebank Schl Hurstville 4,337,953 1,493,501 5,831,454 14,222,367 2,597,947 1,493,501 2,597, % The Hills Grammar Schl Kenthurst 3,109,184 1,389,171 4,498,355 16,812,046 2,481,254 1,389,171 2,481, % The Emanuel Schl Randwick 1,921,293 1,090,460 3,011,753 11,835,827 2,427,489 1,090,460 2,427, % Tara Anglican Schl for Girls Nth Parramatta 2,489,385 1,136,477 3,625,862 14,189,992 2,150,053 1,136,477 2,150, % Kincoppal Rose Bay Rose Bay 1,782,815 1,271,837 3,054,652 18,764,754 2,137,132 1,271,837 2,137, % Oxley College Burradoo 2,759, ,824 3,608,915 6,614,052 2,049, ,824 2,049, % Reddam House Nth Bondi 1,696,292 1,180,418 2,876,710 14,778,233 1,790,123 1,180,418 1,790, % The French Schl of Sydney Maroubra 1,576, ,413 2,205,772 8,428,754 1,709, ,413 1,709, % Blue Mountains Grammar Schl Wentworth Falls 3,164,178 1,059,040 4,223,218 7,744,909 1,632,324 1,059,040 1,632, % Meriden Schl Strathfield 3,094, ,940 4,076,602 15,409,530 1,623, ,940 1,623, % The Scots Schl Albury Albury 3,813,806 1,002,472 4,816,278 10,360,498 1,461,042 1,002,472 1,461, % Mount Sinai College Maroubra 965, ,596 1,403,209 2,943,832 2,864, ,596 1,403, % Sydney Grammar Schl St Ives Prep St Ives 674, ,784 1,029,166 9,889,605 1,795, ,784 1,029, % Sathya Sai Primary Schl Murwillumbah 749, ,958 1,008,415 1,842,738 1,536, ,958 1,008, % Pittwater House Schls Collaroy 2,063, ,181 2,830,905 9,449, , , , % Sydney Grammar Schl Edgecliff Prep Paddington 532, , ,215 7,405,978 1,233, , , % Masada College High Schl St Ives 940, ,691 1,532,650 5,742, , , , % Frensham Schl Mittagong 1,493, ,023 1,853,822 7,093, , , , % Forestville Montessori Schl Forestville 545, , ,405 2,271, , , , % Loquat Valley Anglican Prep Schl Bayview 726, ,266 1,054,452 2,773, , , , % German International Schl Sydney Terrey Hills 471, , ,400 3,003, , , , % Masada College Lindfield 416, , ,157 2,283, , , , % Sydney Japanese Schl Terrey Hills 406, , ,626 2,964, , , , % The Athena Schl Newtown 147,580 68, , ,470 83,600 68,842 83, % Barrenjoey Montessori Schl Avalon 58,367 15,998 74, ,539 21,601 15,998 21, % Total: 184,732,536 85,261, ,994,371 1,199,793, ,469,935 85,261, ,865, %