Concerns a for-profit ‘loophole’ remains

By Kerri Carr

Concerns remain that the NSW Government's attempt to stop for-profit schools operating in NSW has not gone far enough.

In September the Iemma Government passed legislation in an attempt to stop state money going to schools that return a profit for their owners.

The issue has come to prominence as Independent Colleges Australia, claiming a not-for-profit status, proposes a $25 million childcare centre and K-12 private school on an eight hectare site at Kurri Kurri.

Independent Colleges Australia has previously been linked to for-profit ABC Learning Centres.

Greens NSW education spokesperson John Kaye said the NSW legislation "left open a massive loophole".

"Private providers will still be able to milk the public purse," Mr Kaye said.

"The Iemma Government's failure to close the loophole has created a honeypot that is likely to attract the big corporate players to NSW to set up schools and turn education into a business."

Education Minister Carmel Tebbutt told the ABC's Stateline the Government had put in place legislation to ensure that if for-profit schools are established, they cannot take advantage of State Government funding.

"We believe our funding should be for education, not for shareholders, and the legislation has been deliberately crafted to try and avoid some of the problems that have arisen with similar legislation in other states," Ms Tebbutt said.

"If any part of a proprietor's assets or income are transferred to another party, then that is taken to deem the school as a for-profit school," she said.

Mr Kaye said the Government's legislation allows unrestricted payments to members of a private school's governing body without affecting its public funding.

"All ABC Learning or any other profit-focused business need to do is put themselves or a shelf company on the school's governing body and pay themselves a huge fee. Public money will inevitably end up as corporate profits."

Mr Kaye said The Greens had introduced simple amendments that would have closed "this gaping loophole".

"We proposed to limit the size of payments to governing body members and to restrict membership to real people," he said.

"The Iemma Government rejected these changes arguing that it was not their business to say how much schools should pay their boards."

He said the Beattie Government in Queensland has "very effectively stopped private schools paying dividends".

"The Greens are...concerned that schools are at risk of becoming businesses, run for profit and not for educational outcomes," Mr Kaye said.

"We do not want to see children becoming commodities in a market place driven by commercial imperatives.

"Education is too important to the collective future of this nation and children are too precious to be handed over to the cold calculus of bottom line accounting."

Meanwhile, the Coalfields Community Education Coalition (CCEC) opposes the setting up of a school seeking profit from school education and rezoning of land in the Hunter Economic Zone where it is proposed the Independent Colleges Australia education facility would be set up.

CCEC spokesman Tim Plater said the whole industrial estate was set up on the premise that there would be community use of land and now half of that designated land faced the prospect of being rezoned to allow the school.

"The community was under the impression the community use land would be for playing fields," Mr Plater said.

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