Minister promises to stop for-profit private schools having access to public purse

By Kerri Carr

Existing legislation about financial assistance not to be paid to non government schools operating for profit would be enforced, not only to the letter but also in spirit, Education Minister John Della Bosca told the NSW Legislative Council on June 7.

Greens MLC John Kaye asked Mr Della Bosca several questions about Independent Colleges Australia's private school proposal at Kurri Kurri. Independent Colleges Australia is claiming a not-for-profit status, but has been previously linked with for-profit ABC Learning Centres.

Dr Kaye asked what steps had been taken to ensure that the school complies with the Education Act in respect of schools paying profits to their owners.

"What steps has the Minister taken to ensure that the school does not exploit the loophole in section 21A (3) (a) of the legislation that allows schools to pass profits to corporations by unrestricted honorarium payments to members of the governing body?" he also asked.

Mr Della Bosca said he had asked the Department of Education and Training to give him further advice about the application of section 21A of the Act in relation to Independent Colleges Australia, as well as the more general issue of the activities of the for-profit sector in primary and secondary education. "I take this opportunity to reiterate the former Minister's view that there is no place for the for-profit," Mr Della Bosca said.

"In the broadest sense the Government maintains its policy position, and I will seek to make further statements in relation to this and related matters in the near future when I have further advice from the Department about the operation of the legislation.

"The policy has not changed but the entrepreneurial nature of this group of people and their operations appears to be boundless," he said.

"They have some good accountants and lawyers and they continue to work on different models, and this might allow them to present their schooling activities as if they are not-for-profit ventures. That is not the spirit of the legislation and we will act to ensure that the legislation is observed not only to the letter but also in its spirit."

Dr Kaye said if Mr Della Bosca was serious he would "need to close two massive loopholes".

"Under the existing legislation, private schools can contract out their teaching activities to a profit-making company," Dr Kaye said.

"Private schools can also continue to receive state subsidies while paying members of their governing bodies large honoraria.

"Either way, state education funds that were intended to subsidise the operations of private schools will end up as profits for a corporation."

"If the Minister does not change the legislation in NSW then this state will become a honey pot to the operators who are out to make massive profits at the public's expense," Dr Kaye said.

"This state gives private schools $734 million each year. The Iemma Government has an obligation to ensure that all of this money ends up being spent on education and not as shareholder dividends and executive bonuses."

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