Today during Budget Estimates, Abigail grilled the NSW Department of Education and NESA on private schools gaming the rules to get public subsidies and government tax breaks. 

Watch a video of the exchange here or read the excerpt from Hansard below.

ABIGAIL BOYD: Mr Dizdar, what is the total New South Wales Government expenditure on non-government schools in the budget?

MURAT DIZDAR (Secretary, NSW Department of Education): Let me take that on notice. The Commonwealth is the predominant funder, and 20 per cent of the funding comes from the State.

ABIGAIL BOYD: Yes. Could you take it on notice to provide me the total figure?

MURAT DIZDAR: Yes.

ABIGAIL BOYD: The Not-For-Profit Guidelines for Non-Government Schools state very clearly:

A school operates for profit (without limiting the circumstances in which it does so) if the Minister is satisfied that … any payment is made by the school to a related entity or other person or body for property, goods or services at more than reasonable market value…

Do non-government schools have to disclose the salaries of their senior executives and principals in order to demonstrate their not-for-profit status?

MURAT DIZDAR: I'll bring in Mr Martin because that responsibility under section 83 C has gone across to NESA from the department.

PAUL MARTIN (CEO, NSW Education Standards Authority): When NESA is interrogating a school in relation to not-for-profit guidelines, there is an analysis of commercial rates or appropriate award rates of pay for staff. But there's a limitation to that, because independent schools pay heads and heads of school at different rates than the department et cetera, and they retain the right to be able to do so. But, more broadly, the commensurate amount that a person might earn in a school is part of the process of checking for profit.

ABIGAIL BOYD: Okay, but if we've got private schools receiving government funding, getting tax concessions and then paying principals up to $1 million a year, that appears to be a breach of the Act. How are they possibly getting reasonable market value if public school principals are paid somewhere between $140,000 and $216,000.

PAUL MARTIN: The pay or the salaries and the packages of the salaries for independent school principals are not seen as breaches of section 83C. I would have to double-check exactly how it's characterised in relation to the Act or the second reading speech, but I know that the salary rates of heads of independent schools do not bring them into section 83C noncompliance.

ABIGAIL BOYD: It would be rather a perverse result if what we're doing is looking at the market as being just the private school market for salaries and then deciding that this is reasonable. If all of the non-government schools are creating their own super-space market in order to then justify those high fees and not breach the rules, has there been any legal advice given in relation to the application of 83C?

PAUL MARTIN: I'll take the legal advice on notice. There are a range of independent schools that pay a range of amounts for their heads or principals. Some of them would be commensurate with government schools; some of them might be lower; some of course, as you've indicated, are quite generous salaries. They're mostly decided, I think, by the school boards—the independent boards of independent schools. It is my understanding that they are not part of the assessment of breaches of 83C.

ABIGAIL BOYD: They definitely are included in the Not-For-Profit Guidelines for Non-Government Schools, and there is a specific section about how salaries do need to be at a reasonable market value. In what world is a private school principal salary that's five times that of a public school principal salary reasonable market value?

PAUL MARTIN: I couldn't pass judgement on that. It's a matter of the particular independent school and what they believe is an appropriate salary for the person who's fulfilling that—

ABIGAIL BOYD: It's not, though, is it? I mean, it's a question of—

PAUL MARTIN: That's an opinion that I wouldn't be prepared to—

ABIGAIL BOYD: No, but it's a question of, if you're going to call yourself not-for-profit, you cannot be distributing profit. If you are paying services to a principal of $1 million—which is way above the market rate when you view the school sector as a whole—then that is effectively a distribution of profit to an individual.

PAUL MARTIN: That's an opinion that I'm not necessarily sharing. What I would be arguing is that there are particular schools that sit within different markets, and that comparing a particular independent school with the average of principals across the State is not the intention of that section of 83C.

ABIGAIL BOYD: But shouldn't it be? I mean, really, if we're looking at—

PAUL MARTIN: Again, that's an opinion I wouldn't—

ABIGAIL BOYD: Again, we're looking at whether or not a school should be entitled to a whole range of
benefits that it gets because it's notionally not for profit, and that entire test is then based on a market that those
private schools themselves can push up to make whatever they like, and we're just making a farce of the whole
system, aren't we?

PAUL MARTIN: The issue of the packages of the heads of independent schools and its relation to, not only salary, but potential benefits of housing and all sorts of other packages, they're all part of the particular market that they operate in and decided by boards. The for-profit legislation is really about the use of government funds for areas that don't relate to the education of students. I would argue that the use of those funds, irrespective of views about how large those salaries are, are still related specifically and directly to the education of students in those schools.

The CHAIR: That's the point, though, isn't it? It's either for the education of students in schools or it's a distribution of profit in that payment of salary, and so it brings us back to that original point.

PAUL MARTIN: I don't think that that legally fits within section 83C.

Read the full transcript in Hansard here.

11 March 2026