Trevor Cobbold, national convenor of Save Our Schools, has drawn on new ACNC figures to argue that it is ‘incredible' that tax-exempt commercial income made by private schools is ignored in how their funding from the taxpayer is determined.

Non-fee income made by private schools should not be ignored in the calculation, he contends.

“Only the rich benefit from this arrangement…”

“Disregard of donations, investment income and other commercially sourced income is a major loophole in the private school funding system.

“It provides enormous benefits to rich families and wealthy schools who are best placed to take advantage of the loophole.”

Cobbold, a former economist who worked for the Productivity Commission and its predecessors for over 30 years, suggests these same benefits are simply not available to ‘any significant extent’ for public schools nor to less advantaged private schools.

This is an inequity which must be ended, he says.

Data from the Australian Charities and Not-for-profits Commission (ACNC) shows that 50 Victorian private schools serving the wealthiest families in the state drew in nearly $150 million from donations, investment income and other income streams in 2023, Cobbold adds.

He notes that the schools’ income from rental properties, hire of facilities (such as swimming pools and theatres) and sale of assets was up by $19 million on the previous year.

“They received $43.8 million in donations, $27.9 million as investment income and $77.8 million in other income.”

Yet these 50 schools received a total of $416 million in government funding in the same year, Cobbold notes, declaring ‘the big winners are Brighton Grammar and Melbourne Grammar’.

“The donation stream for these schools is supported by multiple tax-exempt organisations such as foundations, building funds, scholarship funds, library and funds or trusts which have Deductible Gift Recipient (DGR) status.

“Donations to these funds are tax deductible for the donors. This is effectively another form of taxpayer subsidy for the schools as they would receive fewer donations without DGR status.”

Independent Schools Victoria (ISV) has hit back at the commentary, slamming the ‘misleading claims’ about tax-deductible donations in independent schools.

The “blame game” is “once again targeting families for exercising school choice”, ISV says.

“This is another example of the same tired playbook – misleading figures and twisted narratives to attack families who choose independent schools,” ISV chief executive Rachel Holthouse argues.

“The reality is that most independent schools receive very little government support for infrastructure. More than 95 per cent of capital funding comes from parents, fundraising, and loans – not taxpayers.”

ISV highlights that in July 2024, the Federal Government ‘rightly rejected’ recommendations to remove the tax-deductible status of school building donations – recognising that ‘this funding is essential, not excessive’.

“Families are already doing the heavy lifting. They make real sacrifices to pay school fees and contribute to facilities – not for luxury, but for classrooms, libraries and safe learning environments,” Holthouse says.

The sector is “not the enemy”, she emphasises.

“Independent school families come from all walks of life… The public deserves better than these blame-game tactics.

“School choice counts – and that means standing up for every family who avidly backs their child’s future and makes financial sacrifices.”

Cobbold, meanwhile, has called on the Albanese Government to commission the National School Resourcing Board to conduct an inquiry into including non-fee income in the funding model. He says this would ensure fairer funding of private schools.

“These arrangements result in massive over-funding of wealthy private schools by the taxpayer.

“It is a huge waste of funds and simply adds to the huge resource advantage that exclusive private schools have over public schools," he contends.