Catholic schools in the Hunter and mid North coast could, for the first time, be asked to pay rent to the church for the land they stand on under proposals being considered by the diocese of Maitland-Newcastle.
The initiative is encountering resistance from some Catholic educators, who fear such a plan risks diverting a portion of government funds intended for Catholic schooling into the administrative coffers of the church.
Currently no Catholic schools in any of the eleven dioceses in New South Wales pay rent to church authorities. Any decision to proceed would set a new precedent, generating potentially millions of dollars for diocesan funds.
"The majority of Catholic educationalists are privately appalled at the approach being taken" one source told the Herald. "It would not pass in the court of public opinion. Many of us fear that it would imperil legitimate claims for government funding of Catholic education if it was perceived those funds were being diverted to provide a revenue stream for the church."
Internal critics fear any move to start extracting rents from Catholic schools might be used to help bolster church finances against claims for compensation for the victims of child sex abuse within the church.
But the NSW Catholic Education Commission insists all government grants going through the Catholic system are subject to audit and to not-for-profit safeguards.
"Financial arrangements between diocesan schools authorities and their dioceses are made locally and must comply with Section 83C [of the NSW Education Act] introduced in late 2014," a spokesman for the commission said.
"Section 83C specifies that funds granted for the purpose of school education must be used to support school education."
A spokeswoman for the head of the Maitland-Newcastle diocese, Bishop Bill Wright, said none of the 56 Catholic schools within its territory had yet been asked to pay rent to the church. But she conceded the diocese was "considering a number of options, which may include rental arrangements for schools located on parish or diocesan land".
"Such discussions are currently taking place, but no formal decisions or changes to existing processes have been made."
The spokeswoman said any change would be "fully compliant" with government legislation.
So-called "systemic" Catholic schools are run through a byzantine administration system under which each of the 11 dioceses in New South Wales has its own Catholic education office, reporting to a local bishop.
Federal and state government education grants are funnelled via the NSW CEC which applies a formula carving up the funds among the dioceses. Each diocese then decides how to use the money to fund the schools within its boundaries.
"The individual school is at the bottom of the food chain," said one source.
A spokesman for the NSW CEC said it did not know of any systemic Catholic schools in the state currently paying rental for occupation of church land. But some parishes might be charging schools for use of parish halls and similar premises. Catholic Education Offices do pay rent to the church for their administrative headquarters, generating revenues which can run into the hundreds of thousands of dollars annually.
The NSW CEC says all such related party transactions have to be registered, and disclosed for audit.
Catholic church authorities have come under the microscope at the Royal Commission into Institutional Responses to Child Sexual Abuse in recent weeks, with scores of witnesses giving evidence about the way abuse complaints were handled. So far Catholic Church authorities have paid out a total $276.1 million in response to claims of child sexual abuse received between January 1 1980 and February 28 2015.
The diocese of Maitland-Newcastle has made 128 payments to victims, at a total cost of $26.6 million.
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