The Coalition is urging the Albanese Labor Government to rule out adopting recommendations from a draft Productivity Commission report which threatens to rip funding from non-government schools and charities.
Commissioned by Treasurer Jim Chalmers in February, The Future Foundations for Giving Report has issued draft recommendations for deductible gift recipient (DGR) status to be scrapped for non-government primary, secondary, childcare, aged care and other religious organisations.
It also calls for the ending of "basic religious charity" status - increasing red tape and reporting requirements for almost one in five Australian charities - including those which support schools and religious education.
This is a slap in the face for the non-government sector, at a time when more Australians are turning to religious charities and organisations for support.
It comes amid surging enrolments for non-government schools which are responsible for more than 35 per cent students across Australia.
The changes have the potential to devastate non-government schools which have enjoyed DGR support since 1954.
Shadow Treasurer, Angus Taylor, said it was just another example of a government with the wrong priorities.
"At a time when Labor is taxing Australians at record levels, Jim Chalmers' own review is calling to increase taxes on non-government schools," Mr Taylor said.
"This will just pass on costs to families struggling with the cost of living and leave non-government schools deprived of vital infrastructure.
"This is a cynical, political, and divisive proposal from a government which has spent a year dividing Australians with ideological distractions.
"Rather than address cost-of-living, Labor is attacking non-government and religious schools. Dr Chalmers and Education Minister Jason Clare must rule out this recommendation and rule it out urgently."
Shadow Minister for Education, Sarah Henderson, said the proposal would have far-reaching consequences.
"This proposed school building tax is a direct, ideological attack on independent and faith-based schools and must immediately be ruled out by the Albanese Government," Senator Henderson said.
"This would be catastrophic for low fee-paying non-government schools which depend on DGR status to construct new school buildings and other vital infrastructure.
"With the vast majority of students at non-government schools from low and middle-income families, this proposal is another cruel blow for struggling families.
"After attacking religious freedom in schools and delivering discriminatory teaching scholarships, this is further evidence of Jason Clare's hostility towards the non-government sector. Parents have no interest in Labor's insidious class warfare.
"Not only do non-government schools support parental choice, but they also play a vital role in taking funding pressure off the government school sector.
"The government has a responsibility to protect the funding mechanisms which are critical to the viability of low fee-paying schools particularly in regional and remote Australia where student numbers are reduced and capital is scarce," Senator Henderson said.
