Boarding and Tax Breaks: Should the Government Do More to Assist our Farmers?

19 September 2019

Boarding schools assist parents living in rural and remote areas (sometimes overseas too) to provide their children with access to schooling that may not otherwise be available. Some of these parents also value boarding for the opportunities it provides for their child to develop independence and to live in a wider community with other children from a variety of backgrounds. This is something that they may not be able to experience if they live in a remote location such as on a station. Boarding fees are charged by non-government schools in addition to the fees for tuition.


Cost of Boarding School

What does it cost, in after tax dollars, to send a child to a boarding school if the parents choose a non-government education?

According to a recent ABC Great Southern article, boarding fees paid by one family in the article were $25,000 per year per child – a total of $50,000 per year for their two children. Tuition fees and other expenses such as uniforms, IT equipment, excursions and a raft of extra-curricular activities are a further financial impost.

Of course, boarding fees vary from school to school and from state to state or territory. According to the Australian Education Network, boarding fees for Years 7 to 12 can range from $12,905 in a Catholic boarding school in regional New South Wales to $20,400 in a leading Melbourne boarding school. Western Australian boarding fees were not included within their data.

So, if a family runs a farm or a station or lives in a rural area where there is no school within a reasonable travelling distance (less than one hour each way) or if the ‘local’ school is only primary or concludes at Year 10, as many district high schools may do, what are their options? There is the ‘School of the Air’ in WA regional areas and similar government on-line schools in other states and territories and there are also several non-government schools that offer online learning. However, these options often require parental supervision, which is not always a possibility, and children who are reasonably self-directed. One other option is for children from these families to attend boarding school in a regional town or in the city.

According to the ABC report, when the Pastoralists and Graziers Association of Western Australia President Tony Seabrook spoke with Prime Minister Scott Morrison about allowing boarding fees to be tax deductible, "The response from politicians is initially negative, it's that connotation of the private school and of being an elite. Comments are raised if they can afford a private school then they shouldn't need a tax deductible component in that," Mr Seabrook said. It was also noted that families are required to pay boarding fees if they send their children to a government boarding facility.


Allowances Available

There are, however, some jurisdictional boarding or living away from home allowances available to families that meet the criteria. In WA, there is the Boarding Away From Home Allowance which is capped at $1791.00 for the year (2019). The Boarding Away from Home Allowance is only available to resident Western Australians who have qualified for the Commonwealth Government Assistance for Isolated Children (AIC) Boarding Allowance or Second Home Allowance. In Queensland there is the Living Away From Home Allowances Scheme with a range of allowances up to $5483.00 per annum for students in secondary school.

The Commonwealth Government Department of Human Services offers the Assistance for Isolated Children Scheme of up to $10,838 per annum. There is also a Second Home Allowance of $245.36 per fortnight, a Distance Education Allowance of $4211.00 per annum and Assistance for Isolated Children Pensioner Education Supplement of $62.40 per fortnight. Once again, all subject to the satisfaction of eligibility criteria.

According to the Australian Government's Department of Social Services website, the “Assistance for Isolated Children Scheme” helps eligible parents and carers with the extra costs of educating their children when they cannot go to an appropriate government school. If an appropriate government school is not available, the family can choose a different school for the child to attend and they may receive financial assistance with the additional costs. All allowances under the scheme, except the Additional Boarding Allowance, are not income or assets tested, but applicants must meet eligibility criteria.

Admittedly, not all families would meet the criteria for this assistance, as this can be based on the remoteness of their home/property, the availability of government or non-government schools within a reasonable travelling distance and, for some, the income of the family. The article also refers to one family whose out of pocket boarding expenses were still $14,000 per annum even though they were eligible for $10,000 of state and federal allowances.


Should Tax Concessions be Provided?

Therefore, do the Pastoralists and Graziers Association of Western Australia have a valid argument? Should the government look seriously at tax concessions for rural families who wish to, for whatever reason, send their children to boarding schools? Should the government also factor in from a policy perspective that families living on rural farms not only earn a living for themselves, but their choice of occupation provides food to those that choose to live in the city?

There are valid issues raised within the ABC Great Southern article to support this point of view in relation to tax concessions-most notably that any education tax concession would be a further incentive for farmers to stay on their land, knowing that they will receive some form of financial concession that enables their children to develop independence and to live in a wider community with other children from a variety of backgrounds just like children who live in metropolitan centres. Kirsty Forshaw who runs Nita Downs Station, two and a half hours' drive south of Broome is quoted in the ABC Great Southern article as saying, "It's not necessarily that we have that money sitting in the bank account, we find ways to juggle, to manage." She said a tax break would make a "big difference" to enable people to stay on the land.

However, notwithstanding that this is a complicated issue due to the Commonwealth/state and territory education funding model in Australia, there is also another valid argument that any parent who pays school fees for non-government schooling is saving the state/territory and federal governments money that would need to be spent by the government if their child went to a government school. Therefore, just as there are tax benefits for health care (less Medicare levy to pay) if someone has private health insurance, could it also be an incentive for governments to offer tax concessions for anyone who pays after tax dollars to have their child educated in a non-government school?

Non-government school education is not just for the wealthy, just as boarding is not just for farmers and people who live in remote locations. Education of children still comes down to parent choice and affordability. Parents can choose government education and government boarding or non-government education and non-government boarding. Their choice is usually based on what they believe will be in the best interests of their children.

The state, territory and federal governments are already contributing substantial allowances to assist remote families to have their school of choice.

Nevertheless, should the Federal Government do more for our farmers?

Craig D’cruz

With 37 years of educational experience, Craig D’cruz is the National Education Lead at CompliSpace. Craig provides direction on education matters including new products, program/module content and training. Previously Craig held the roles of Industrial Officer at the Association of Independent Schools of WA, he was the Principal of a K-12 non-government school, Deputy Principal of a systemic non-government school and he has had teaching and leadership experience in both the independent and Catholic school sectors. Craig currently sits on the board of a large non-government school and is a regular presenter on behalf of CompliSpace and other educational bodies on issues relating to school governance, school culture and leadership.