No to GST on non-government school fees: NCEC

22/01/2015

NCEC News Story
NCEC Executive Director Ross Fox.

Opinion Editorial by National Catholic Education Commission Executive Director Ross Fox

With Australia staring down the barrel of $102 billion in deficits over the forward estimates, belts are being tightened and new taxes seem to be under active discussion.

Last week, The Australia Institute led a small but vocal chorus that has proposed the extension of GST to education and health as part of the answer to the country’s fiscal woes. In fact, they’ve narrowed their focus to private health insurance and to Catholic and independent schools.

The Australia Institute estimates that $790 million could be raised if fees in non-government schools were hit with a 10 per cent GST. That estimate likely assumes the 750,000 children currently in Catholic schools will stay in their school despite being hit with a new tax.

The reality is GST on schools could force many families to remove their children from the school of their choice. Catholic schools in many parts of Australia, including in regional and remote areas, cater for large numbers of families from low socioeconomic backgrounds.

Some simple calculations suggest placing GST on school fees in Catholic schools could cost government as much as it raises.

If a parent moves their child from a Catholic school to a public school, the additional cost to government – state and Commonwealth – of educating each student is currently about $2,600.

And that doesn’t take into account the capital costs of new classrooms and new schools to accommodate the potential influx of students into the government system.

If a transfer of between 5 and 10 per cent of students from non-government schools to government schools took place in response to the imposition of GST on school fees, the estimated $790 million in additional revenue to fill a small hole in the Commonwealth’s $31 billion deficit in 2015-16 would be greatly diminished or even eliminated.

We can debate the regressive nature of the GST. We can debate the merits of the government and non-government education systems. But at the end of the day, if introducing GST on school education will deliver little, if any, additional revenue, why increase school fees for hundreds of thousands of parents?

Some people seem to have fallen into the old trap of pitting government and non-government schools against each other, rather than trying to improve the school system as a whole.

If we are going to have this debate, proponents of the GST on Catholic and independent schools should provide a rationale for why students being educated in government schools – regardless of their family’s socioeconomic status – should not be subjected to the same tax impositions as those in Catholic schools. In the country of the “fair go”, how is such a system equitable?

It might stem from the assumption that government schools are free, but parents across Australia know that is not true. Many parents are paying several hundred dollars each year – thousands of dollars in some cases – to top up the government funding allocated to students in public schools.

Parents of students in Catholic schools are paying, on average, more than $3,300 each year to supplement government funding that covers less than 80 per cent of the annual cost of educating their child.

For a range of reasons, parents have chosen to carry that financial burden to have their children attend a Catholic school. Many have made major sacrifices to foot that bill, but will find it impossible to pay an extra 10 per cent. Would it really be equitable to hit them with increased fees while their neighbours with a child in a government school are unaffected?

Education Minister Christopher Pyne and Shadow Minister Kate Ellis have thankfully stated that GST on school fees is not a goer. Wasting time and energy on the topic is distracting us from the goal of further improving the quality of learning and teaching in Australia’s schools and educational outcomes.

Every child deserves the well-being benefits and life opportunities that arise from a quality school education.

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