CHARITABLE EXEMPTIONS AND WHAT IT MEANS FOR

WEALTHY PRIVATE SCHOOLS 

The best kept secret in private church school funding is the enormous amounts of indirect subsidization gained through their categorization as "Charities". That is because,since the Pemsel case in the 1890s,  wealthy religious schools are "charitable" by virtue of the fact that they are "religious" and "educational".

The DOGS have been attempting to expose the inequities of this "purple economy' since the 1960s with limited success.

But just occasionally this scandalous and bizarre fact, together with its implications emerges in small, out of the way articles in the mainstream media . Consider the following report from the Financial Review 11 August 2004, p. 4 under the Heading of "Tax Break Attacked" ( reporter Sophie Morris.)

"Public funding for private schools came under renewed attack yesterday when ...the Australia Institute argued that tax deductions for donations to schools were an implicit subsidy that favoured the wealthy.

The Institute's Clive Hamilton stoked the election-year debate by saying the deductions financed sports facilities and buildings at schools that were already well resourced, effectively boosting their federal grants. ...

Dr. Hamilton has conducted research, into how much the tax deduction on donations is worth to private schools, calculating it equals half the federal grant to some schools

For example:

" Melbourne's Scotch College raised $7 million in two years for a music and drama centre - delivering donors a tax deduction of $3.4 million, compared with the $2.6 million in direct federal grants to the school in 2003.

and

"..if half the parents of students at Sydney's St. Ignatius' College responded to the school's request for donations of $1050, the Australia Institute calculated the school would raise $815,850 each year. Assuming the parents were in the top tax bracket, this would involve $395,687in forfeited tax revenue. "