IEU members are deeply concerned by revelations that public funding for Catholic schools may have been wrongfully spent on Liberal party matters including branch stacking.

Illegal political donations

The NSW Independent Commission against Corruption (ICAC) is investigating allegations that Catholic Schools NSW made illegal political donations to the NSW Liberal party.

The ICAC public inquiry was in its third week of hearings as part of its investigation into allegations involving possible offences under NSW electoral funding laws as Newsmonth went to press.

The allegations include claims Catholic Schools NSW made political donations to the Liberal Party that were not declared and exceeded caps. The payments were allegedly made at the behest of chief executive Dallas McInerney, who has stood aside from his role.

The ICAC has heard evidence that up to $265,000 in Catholic Schools NSW funding may have been diverted to a conservative Liberal factional group known as the Reformers.

The Reformers sought to sign up conservative members to the party’s Sydney branches.

The ICAC also heard evidence that members of the Reformers employed by Catholic Schools NSW recruited and renewed members to the Liberal party during work time.

Funding sources

NSW Catholic schools received nearly $4 billion in federal and NSW government funding in 2024, accounting for almost 80 per cent of the sector’s income. Catholic Schools NSW, the governing body for almost 600 schools, distributes funding to the diocesan school system.

In 2024, NSW Catholic diocesan schools received $2.9 billion from the federal government, $749 million from the NSW government, $550 million in school fees and $100 million in private income, donations and investments.

Corruption inquiry

IEUA NSW/ACT Branch Secretary Carol Matthews said IEU members expect full transparency and accountability in the use of public funding by non-government schools.

“This funding should be used to improve student academic outcomes and enhance the learning experience for students,” she said.

“Responsible school expenditure includes professional learning for school staff, development of curriculum materials, support for students with disabilities, and adequate pay and working conditions for staff who deliver quality education.”

Matthews said IEU members would be deeply concerned if any public funding for non-government schools was diverted from its intended purpose.

“This is because teachers and school staff face ongoing workload pressures and resourcing constraints,” she said.

Matthews said the IEU backed reforms to ensure public funding of non-government schools was transparent.

“The NSW government closely scrutinises expenditure at the individual school level and at the school proprietor level to ensure funding is used solely for the operation of each school,” she said.

“However, similar scrutiny is not applied to organisations such as Catholic Schools NSW that receive funding on behalf of Catholic diocesan schools.

“The union believes legislative provisions should be broadened to provide greater transparency at all stages of the funding process.”