By Bridie Smith
A third of Melbourne’s private girls’ schools have been operating in the red, forced to increase tuition fees, confine spending to essential projects and delay capital works to deal with the deficits.
COVID-19 lockdowns thwarted fundraising opportunities, eroding schools’ reserves and reducing their ability to absorb the state government’s new payroll tax.
Lowther Hall Anglican Grammar School, in Essendon, reported a deficit for four of the past six years.
Six private all-girls schools have been in the red at some point since 2020, according to an analysis by The Age of 18 all-girls schools’ financial reports lodged with the Australian Charities and Not-for-Profits Commission.
Of the six girls’ schools to report a deficit since 2020, four – Lowther Hall, Sacre Coeur, Loreto Mandeville Hall Toorak and Shelford Girls’ Grammar – have weathered deficits over multiple years.
The other two schools, Ivanhoe Girls’ Grammar and Mentone Girls’ Grammar, reported deficits in 2021 and 2022 respectively, with Ivanhoe Girls’ Grammar noting in its 2022 financial report that school operations had been significantly impacted by the pandemic.
COVID-19 lockdowns meant schools’ extracurricular activities, such as excursions, camps and parent and community social events, were cancelled. These events are often lucrative fundraising opportunities for schools, along with canteen and second-hand uniform sales, which were also compromised by the move to off-campus learning.
In July, a new school payroll tax was introduced, forcing about 60 Victorian high-fee private schools – those with annual fees of $15,000 or more – to pay 4.86 per cent payroll tax.
According to Independent Schools Victoria, 16 private girls’ schools are currently liable for payroll tax compared with five private boys’ schools.
While the schools are running at deficits, they also have considerable assets. Loreto Mandeville Hall recorded more than $95 million in total assets in 2023, and Lowther Hall recorded more than $55 million in total assets the same year. Other schools have recorded having between $18 million and $50 million in assets. This includes cash and property.
Lowther, a 104-year-old Anglican school in Essendon, in Melbourne’s north, reported four deficits between 2018 and 2023, despite enrolments being the highest in a decade. Of its two surpluses, the one in 2022 was just $30,945. In 2023, when 838 students were enrolled and year 12 fees topped $31,000, the school was back in the red with a $737,036 deficit.
The school’s 2023 financial report notes that spending was restricted to essential works, including fixing flooding in a playground, replacing electrical cabling, IT items and furniture.
Lowther principal Elisabeth Rhodes said the pandemic had cost the school hundreds of thousands of dollars and that it was now facing a payroll tax bill of $1.3 million this financial year.
Shelford will cease to exist when it merges with Caulfield Grammar at the end of the year.Credit: Simon Schluter
“During COVID, there were some programs like camps, for example, that couldn’t be delivered [but] our costs didn’t reduce terribly much as the majority of school costs is staff,” she said.
Planned capital works, such as a refurbishment of the senior school, construction of a gymnasium and upgrading the school auditorium, have been put on hold. Rhodes said the school had no choice but to pass on the tax bill to families.
“We have restructured our fees entirely as a result of the changed financial, economic circumstances that we find ourselves in,” Rhodes said.
Fees for year 12 students have risen by $10,000 to $38,900 since 2020.
At Catholic all-girls school Sacre Coeur, in Glen Iris, enrolments have dwindled since 2014, when 730 students were enrolled, according to the MySchool website. Last year, with 680 students in prep to year 12, the school recorded a $1.03 million deficit. Financial reports from the previous year put the school $1.53 million in the red.
Achieving an annual operating surplus is nominated as a key measure of performance in the school’s 2023 directors’ report, alongside reinvesting in facilities and infrastructure.
Catholic girls’ school Loreto Mandeville Hall in Toorak, which marked its centenary in August, saw its deficit grow from $874,359 in 2022 to $1.59 million in 2023.
Shelford, a 126-year-old girls’ school in Caulfield, reported a deficit of $577,459 in 2022 on the back of a $1.05 million deficit in 2021.
The high-achieving girls’ school will close in December when Caulfield Grammar takes over the campus.
Co-educational Caulfield Grammar, which had 3324 students enrolled last year, reported an operating surplus of $8.33 million in 2022 and $12.93 million in 2021. The school will charge $42,822 for year 12 students next year, which includes a payroll tax surcharge of $1782.
Mentone Girls’ Grammar, in Melbourne’s bayside, recorded a $2.18 million deficit in 2022, off the back of a $1.15 million surplus the year before.
Genazzano FCJ College, a 135-year-old Catholic school in Kew, has been unable to turn enrolments around since they started to nosedive in 2014 when 1095 students attended the school. Last year, 738 girls were enrolled in prep to year 12.
The school recorded a $3621 deficit in 2019 before reporting a $7.9 million surplus the following year. Financial reports for 2021, 2022 and 2023 have not been uploaded to the Australian Charities and Not-for-Profits Commission website so the impact of COVID-19 lockdowns on the school and its ability to absorb the payroll tax are not clear.
All independent schools registered as charities are required to submit an annual information statement to the commission. Large charities, such as schools need to provide a financial report outlining their performance over the previous calendar year.
Genazzano FCJ principal Loretta Wholley said in a statement that the school “consistently meets its financial obligations through the preparation and auditing of annual financial statements”.
Wholley said the payroll tax had put a strain on the school’s budget. However, the school would work to minimise the impact of the tax on school fees, she said.
Girls’ schools that have remained in the black since 2020 have still had their profit margins slashed. Korowa Anglican Girls’ School in Glen Iris, which took in many Shelford students before the school’s closure, boasted a $10.15 million surplus in 2020, thanks in large part to a donation to the school’s building fund. Last year, the school’s surplus slipped to $1.45 million.
Principal Frances Booth said fees would increase as a direct response to the payroll tax, which she described as “a great challenge”. Fees for year 12 students next year have risen to $42,970, from $40,350 this year.
One of Victoria’s oldest private girls’ schools, Ruyton, in Kew, reported a $2.19 million surplus in 2022 – the smallest in seven years and almost half the surplus recorded in 2020.
Independent Schools Victoria chief executive Rachel Holthouse said the payroll tax had a disproportionate effect on girls’ schools.
“While [girls’ schools’] circumstances vary, some can face distinct challenges, especially those with smaller enrolments,” she said. “Schools with limited reserves can find financial shocks particularly challenging.”
Regional executive director of the International Coalition of Girls’ Schools Loren Bridge said demand for all-girls schools remained strong.
She pointed to the results of a 2023 survey by the International Coalition of Girls’ Schools, which showed a 2.6 per cent annual increase in enrolments among private girls’ schools in Melbourne.
“The future of all-girls schools is really strong and, really, they’ve never been more relevant,” she said.
“Places where girls can develop their leadership skills, their independence and their confidence in those critical school years are incredibly relevant.”
Ivanhoe Girls’ Grammar, Loreto Mandeville Hall, Mentone Girls’ Grammar, Ruyton Girls’ School and Sacre Coeur declined to comment.
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