Cranbrook and the private school “arms race”. How far is elite school funding out of whack?

by Michael West | Mar 4, 2024 | Government, Latest Posts

Cranbrook and other private elite schools don’t get obscene levels of public funding, it’s the old boys. Michael West reports on the inequity in private school funding as ABC Four Corners investigates the most elite school of all. 

Is this some sort of record? ABC Four Corners reporter Louise Milligan has divulged on social media today that ABC, its staff and *others* had copped no less than 7 legal threats from associates of elite Sydney boys school Cranbrook, which perches over Sydney Harbour and the richest suburb in Australia, Point Piper.

“Others” presumably refers to the sources for the ABC investigation. That’s quite a tally of pettifoggers and suggests, in this instance, that a current affairs show can legitimately deploy the word “explosive” for once. “A hit job” is how the Murdoch press is framing it today.

Indeed elitism and the boys’ culture of these fabulously wealthy private schools in Australia’s major cities are bona fide avenues for public interest inquiry, not merely things of titillation. They entrench advantage … and disadvantage in a country that has become a lot more unequal over the past 20 years. And anything that gets public funding is fair game for public coverage.

 

And that is where we come in – on the headline that Cranbrook gets “$6m in government funding”. Is this fair to be slotting private schools millions in public subsidies when they are spending $20m on lavish building projects such as libraries and sports centres?

There will be much made of this in the coming days so a few points: the information about government funding is all public and easily accessible. What is more difficult is working out the equity in the funding models for schools in Australia.

Ski trips and citadels not on the public dime

Yes, private schools are subsidised but their capital works are not – that’s the swimming pools and the fancy building – at least in the case of these GPS schools. Yes, many such as The King’s School did gorge themselves on Covid subsidies when they should not have, at least on a moral basis. 

Yes, this on top of the $41,800 a year which parents, or grandparents, have to fork out to send just one child to Cranbrook. You can add the annual cost of a Cranners ski trip to Thredders on top.

Stories such as this one in SMH recently have lent a spot of fury to the debate.

“The fate of a $29 million plan to build a library resembling a Scottish castle at a private boys’ school in Sydney’s east [Scots College, up the street from Cranbrook] will be decided by an independent panel after residents complained the project would worsen traffic woes and encroach on harbour views.”

Ahem, $29m for a library? Again, it’s the parents and old boys who pay for it though.

So it is that we follow the money. Dial it up on the excellent My Schools website. Cranbrook gets around $6.5m in recurrent funding from federal and state governments, or $3,800 per student. Notice they get zero for capex or building works. The old boys pay for that. The inequity is in the tax breaks but we get to this later.

Now dial up Canterbury Girls High. That gets $12m or $16,000 per student. 

Incidentally, check out Canterbury Boys High. Why do the boys get more than the girls? It’s size of school, greater efficiencies in running bigger classrooms and more students. But that’s an aside.

New private schools, which are often quicker to set up in new suburban areas than public ones, get far higher government subsidies than do the ritzy private schools. The system is means-tested; it is based on ATO data on the wealth of the parents.

Now, there is an argument that Cranners and the like should not get any subsidies at all. It’s not as if they need it. The question is where to draw the line. This is a reasonable position even if many parents are not that wealthy and have to borrow or get their parents to pay the fees. But the numbers are not huge; they are based on a per student model and that the private schools deliver competition to the public sector.

It is true that new private schools do receive capital funding linked to their student numbers. Not the elite schools, though.

Trevor Cobbold, the spokesman for Save Our Schools and an advocate against public subsidies, says public schools have lost billions in funding over the last six years “because of accounting tricks conjured up between the Morrison and state/territory governments in bilateral funding agreements. They have lost about $13 billion over the six years from 2019 to 2024”.

“In total, public schools will have lost over $26 billion in funding over eleven years from 2019-2029 inclusive as a result of the collusion between the Morrison Government and the states and its continuation in the new agreements. It is outrageous that Labor Governments around the country are prepared to prolong the swindle.”

Trevor goes into detail on the inequities of the system on Save our Schools. And he is not much kinder to the Albanese government’s efforts to turn the scales than to the Coalition skew. 

Where the debate lies is in the issue that any funding from government does bolster the balance sheets of the elite schools and enables them to borrow for public works. The way this works is the school raises the finance from the banks and the parents typically repay the loans over a 20 year timeframe. So the recurrent money from the government for each student in a sense facilitates the borrowing but does not pay for it.

Gonski report

The reason that the Gonski Report recommended that every child in every school needed some level of government funding is that it keeps the private sector within the education system. World comparisons are valid. In Germany they don’t have private schools and education standards are higher.

In England, private schools don’t get public funding and are outside the government system so self-regulated, which has implications for education standards and control issues. Here, they remain inside the tent.

So, if we are not overhauling the entire system, we are debating areas of financial fairness in the various aspects of education funding. There is a metric called the ‘schooling resource standard base amount’ which is like a means test for parents which determines the level of government funding. Cranbrook’s would be at the lowest level.

Something that could be tightened up is the charity and tax status. Private schools have DGR or Designated Gift Recipient status, which means wealthy parents claim a tax deduction for donating to the capital works.

For the labourer from the outer suburbs asked to chip in for a classroom at the local public school, the same tax deduction is available but – as is the case with all the tax lurks – negative gearing, franking credits, CGT relief and so forth – some 90% of the benefits of these things tend go to the wealthiest 10%.

Symptom, not the cause

All of which brings us to the point, that the wealth of elite schools is the symptom of government policy and inequality in Australia, not the cause, although you could argue that cultural issues arising from elite schooling affect policy. As one former Cranbrook person notes in the Four Corners expose: “Those people go on to run our country, for better or for worse”.

A recent report from the NSW Productivity Commission found that Sydney was at risk of becoming “the city with no grandchildren”, said Commissioner Peter Achterstraat. High housing costs were forcing young families to leave Sydney, some 35,000 people aged 30-40 between 2016 and 2021 have left the city.

Similar trends, although to a lesser degree, may affect other metro centres over time. All this is down to the failure of successive governments to govern in the interests of all Australians to counter the deleterious social effects of reform stasis. Yes, the 9 years of Coalition government did nothing to arrest the funding skew in favour of wealthy schools but the ostentatious wealth? That’s all down to the parents.

A few points to close. The data for the independent schools on My School website is actual money spent whereas the money for the public and Catholic schools goes to the education departments respectively. And they allocate it.

The way the funding models for education work mean nobody loses money, at least on a per student basis. Two weeks ago, there was news that NSW public schools would lose money. They lost 5,000 students so they lose some $20,000 per student or $100m but the whole sector lost money.

Finally, swimming in money as they are, and backed often by the churches, private schools have been expanding into campuses for disadvantaged youth. The demand, incidentally, for these services has risen dramatically since the Covid lockdowns. It’s a sector that governments want to control and partially fund, but it’s not one they wish to keep entirely public. So joint ventures are rising in this space, which is perhaps a beneficial upshot of the rising inequality of wealth in this country.

So, short of having another inquiry, another report and another bunch of ignored recommendations, the overall structure of Australia’s education system is unlikely to change. There is an encroaching privatisation of the system yet the debates will centre on the detail not the whole. Can Cranbrook do without the funding? Surely. These schools all have waiting lists.

Does it deserve the funding? Probably not. The “arms race” as the battle to outdo the rival schools on grandiose building works, v ensures the debate will not go away. The question is where to draw the line when it comes to cutting public subsidies.

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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