The Morrison government has given Catholic schools more than 10 times the amount of money needed to maintain "affordable choice" for parents, according to analysis by the Grattan Institute.
Meanwhile, federal Education Minister Dan Tehan has signalled there is room to compromise as he attempts to fend off a major stoush with the NSW Liberal government over school funding.
The $4.6 billion injection into private schools announced last week included a $1.2 billion "choice and affordability" fund designed to help Catholic and independent schools keep fees low.
About $718 million is expected to flow to the Catholic sector, with much of that money earmarked for keeping fees low at inner-city primary schools where government funding will decrease under the new "direct income" method of assessing school wealth.
But the Grattan Institute's Pete Goss said as few as 30 Catholic primary schools nationwide faced fee increases in excess of $4000 a year. The median income of families at those schools was more than $200,000, he said, while just one in 100 of their students was socioeconomically below average.
Dr Goss said Catholic primary schools could "easily afford" to keep fees low for less-advantaged families at a cost of just $3-4 million a year - or no more than $50 million over the decade.
Rather than subsidise fees!!!! Catholic schools could keep fees low just for the families who aren’t advantaged - for less than a tenth of the price.
"They could find that $3-4 million from their own funds, they don't need an extra slush fund."
The schools were largely in inner-city Sydney, particularly the north shore, and Melbourne's eastern suburbs, Dr Goss said.
He said the Morrison government's argument that extra money was necessary to ensure "affordable choice" for parents was misleading.
"Affordable choice is not the same thing as low-fee," he said. "What's affordable to a family on $300,000 is very different to what a family on $60,000 can afford."
The $1.2 billion fund will be delivered to private school authorities in each state to use as they please, though the government wants part of the money to flow to regional and remote schools, as well as those affected by drought.
It is the most controversial part of last week's $4.6 billion boost to private schools, and was quickly branded a "slush fund" by Labor, the unions and former NSW education minister Adrian Piccoli.
The remaining $3.4 billion provides interim and transitional funding as private schools move to a new model for assessing their wealth - based on parents' tax records, rather than the census.
Current NSW Education Minister Rob Stokes has led the charge against the policy, threatening to reject any agreement that duds public schools. On Sunday, Mr Tehan conceded NSW could derail the arrangements if its dissent persisted, but indicated he was open to compromise on some aspects.
"These are negotiations. The NSW state government for instance wants things included in the way their contributions to their state schools are counted, so we'll have disucssions around that," he told the ABC's Insiders program.
"I'm sure that he [Mr Stokes] will say they would like more money. I don't know a state and territory government that doesn't want more money for one thing or another. But I'm sure we'll be able to work all that through."
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