I’d be interested to know how we intrerpt this fee help aricle in the SMH today.

The basic line is private colleges access to fee help means there is a growing burden on taxpayers because people like Moore College students borrow in excess of $40K to go to college and then earn low incomes that don’t pay it back.

it raises a whole heap of questions:

should we be indebted to government and taxpayers for a theological education?

is it right that we take these loans knowing it will take forever to reach the payback threshhold?

does our indebtedness to the taxpayer commend the gospel to them?

do we want to perceieved as a burden?

should we allow higher bursary’s for students so that they borrow less?

is it true that most students return to secular work as the article reports?

how can we fund theological education in a way that does not damage our reputation before a watching world?

joyfully
Shane

Shane Rogerson - 15 January 2008 08:32 AM

I’d be interested to know how we intrerpt this fee help aricle in the SMH today.

it raises a whole heap of questions.............................

Good questions Shane.

In the Pressie system, I’m sure most who do the full degree courses (the most expensive) are heading into the ministry and with our remuneration tables, if almost $40,000 is the minimum for HECS repayment to cut in, then virtually none of them will ever pay back their HECS fees.

This is definitely an ethical question which the Theological Colleges and their students should seriously, prayerfully and possibly sacrificially be considering.

As things stand, and if the SMH article’s facts are correct then, we are involved (hopefully, unintentionally) in a rort which needs to be addressed.

I would be interested to hear what others have to say on this matter.

This is ammunition the churches don’t need to give the radical secularists at this time in history.

The key to the problem is in this line:

Graduate clergy presented a particular burden to the taxpayer, because their accommodation and living costs were subsidised by the churches and their low taxable income meant they took a long time to repay their debts.

The essence of the inequity is how the tax system treats clergy ‘perks’. For most lay people living in Sydney 33-50% of their after tax income will go to housing costs. Of course, clergy accommodation costs - and we are talking big $$ - are outside the tax system.  (You’d be lucky to rent a 4-5 bed house anywhere in Sydney for less than $300 pw ie $16,000 per year and most of the properties Sydney Anglican clergy actually live in would rent at between $600-$1200 pw)

Unfortunately I do not have a solution as I understand the rationale in congregations providing ‘equitable’ accommodation arrangements to their clergy so that ministry can be provided evenly across the city.

But I do think our Synods need to be proactive in addressing the taxation implications, merely because of the apologetics issue from the public perception that churches are receiving unfair treatment.

Hi Jeremy
I take it you mean that the issue is to do with being a good citizen.
I am not a reformation history expert but its interesting that one of the big beefs that pepople had with the Roman church was that its clergy were a bunch of freeloaders. They had forgotten to serve I take it

e.g in 1467 in Zurich one third of taxable property was owned by the church and therefore exempt; clergy were immune from civil justice and military service, in the city of Worms 10% of the city were clergy and didn’t pay taxes.

Maybe we should take the 1.8 million budgeted for ‘connect ‘ and service/ pay off our students debts - that would be a creative way of reconnecting with our community?!!

shane

I take it you mean that the issue is to do with being a good citizen.

Yes. The rationale for giving clergy generous tax breaks is that they serve the whole community. It’s the chaplaincy model . The fact that churches have retreated from this model (for fairly complex reasons) leaves us very vulnerable to criticism.
It’s significant however that Connect 09 is an effort to reclaim the idea of serving the entire community.

As things stand, and if the SMH article’s facts are correct then, we are involved (hopefully, unintentionally) in a rort which needs to be addressed.

surely no one would intentionally encourage someone to take out a loan in full knowledge of not having to pay it back.

it would be helpful to clarify how the different colleges faciliate and encourage fee payment and promote good citizenry.

i do not believe that aspiring members of the clergy and other church workers should remain indebted to the taxpayer for their theological education. While I am not against one taking out the loan, I believe they should oblige themselve to pay it back as soon as possible even before earning the minimum re-payment threshold.

I was saddened to read this article this morning, partly because of the content itself, but because of the fact that this issue has been let get to this situation, and the fact that it only gets questioned when it is highlighted by an SMH article.

With a four year college degree, each individual may have a debt of around $52,000, which they may or may not have to pay depending on their taxable income in the years following graduation.  The limit for a FEE-HELP debt is now $80,000 having previously been around $50,000.

The ordinary clergy stipend required by the Nomination Ordinance to be paid to Anglican rectors and curates in charge in the Sydney Diocese is in excess of the repayment threshold (which begins at around $40,000), however stipend packaging for ministry expenses may mean that many clergy on the basic stipend would not have to repay amounts.  Repayments effectively operate as a 4-8% additional tax on income for these clergy until their debt has been repayed.

This system in and of itself is not too problematic (though it may take 25-30 years to repay the loan).  What concerns me more is my understanding that when FEE-HELP was introduced at Moore (only a few years ago - and by the way the other theological colleges I have looked at do it too), the following changes happened.

* Fees for studying a Theology degree were increased to a level deemed appropriate by a government department for full-fee degrees.
* Concessional study arrangements for wives of college students were removed.
* The Synod of the Diocese of Sydney decreased their level of financial support for Ordination Candidates. (If you read some of last year’s synod documents you will find that this spare money is being used to fund Connect 09).

The capacity to have more theological students and more funding for the colleges may counteract these issues, but if we are to continue to rely on the government to graciously allow us to do ministry with the taxpayer’s money, we should not be surprised if that money disappears some day.

I think people are forgetting that the system is designed this way. The community may think it’s a little unfair, but the government has written the laws cause it wants this system.

I’m not planning on paying back any of my (large) HECS or FEE HELP loans.

I think people are forgetting that the system is designed this way. The community may think it’s a little unfair, but the government has written the laws cause it wants this system.

No I think you’ll find its an unintentional anomaly.

[comment deleted]

BTW - Am a correct to assume that churches don’t have to pay the fringe benefit tax on clergy accommodation costs that would apply to other occupations if their salaries were packaged in a similar way??

I don’t have one of these debts personally - though I guess I could obtain one with further study. It seems to me that there is a question whether there is definite ethical problem. If you enter an agreement (whether we created it or not) where you take money for a certain purpose, to be paid back under certain conditions - you use the money as required but never then meet the conditions of repayment then there is no problem. There are (i would hazard a guess) 1000’s of normal (as opposed to theological) graduates in the same boat - women (and maybe men) who finish uni, get married and have kids and leave the workforce permanently or long term, or those who work in low paying jobs despite (say) an Arts degree, paid for by the taxpayer. There are plenty of married couples where one works part time and never fulfills the requirements of repayment (unless I’m missing something).

We used to provide free university education to pretty much anyone who had the brains to go through the system. Obviously we decided as a country that that was not the most helpful model (hmmmm!). Here’s a newish model - a user pays model where society pays for the education until such time as the person can afford to repay it. If the government puts it in place, and a complimentary system of packaging wages - and we use the system - with both parties knowing full well that there is a likelihood that many ministers will never repay the money - then the ethical issue seems out the window.

There’s a few more suggestions we could make of course.
1. Synod could go back to funding College (other churches can do whatever they have to do)?
2. We could pay our ministers more so they go over the threshold and force them to pay it back?
3. We could make the students pay the full cost? $40,000 + living expenses for 4 years… easy?!
4. Individual churches could set up cadetship programs - pay the student $15K per year and then have them for 4 years after college at a reduced rate for full time ministry? of course MT&D;would have to revise it’s policies.
5. Churches could be taxed a levy by Synod to pay for training and take the burden off the government? Though we might already be doing that for something else?
6. We could have part time ministers who are paid a small wage and make them get real jobs.

As an aside - I wonder if clergy have actually retreated as one writer seem to be saying from being chaplains to society. I’m not sure that it was ever the case that clergy were chaplains to the sort of soceity we have today… but if by that we mean that we no longer deal with death and funerals, marriages, baptisms and general counselling for local folk, do memorial services, hospital visiting in the middle of the night, supply food and assistance to the destitute, visit the elderly in nursing homes, evangelise everyone we come across and pastor those around us, and a thousand other little jobs that our clergy do then I guess you must be right. Though as I look at my schedule for the past 2 months or so....?!

Jeremy - yes you are correct. Churches and charities don’t pay FBT on Clergy accomodation. I’m not sure there are comparable jobs with that sort of packaging available or likely. If we change the system - which of course the Government can do - then we’re going tohave to come up with some pretty creative solutions. Pay rates for Rectors are set at 85% of the average weekly male wage - so that would have to increase. How does a minister coming from say penrith or Picton afford a house in Vaucluse or Mosman - assuming we ditch the housing and get ministers to provide their own? If we start paying FBT then are the congregations going to dig deeper? or do we change our whole structure and have no full time ministers but only tentmaker ministries?
I think one of the things about these discussions is rather than just saying there is a problem (true or otherwise) - we actually need to be creative about solutions.

Shane Rogerson - 15 January 2008 11:06 AM

surely no one would intentionally encourage someone to take out a loan in full knowledge of not having to pay it back.

it would be helpful to clarify how the different colleges faciliate and encourage fee payment and promote good citizenry.

Shane that is how I have heard it being promoted by some senior clergy eager to get people studying in their college and preparing themselves for ministry.

I was a self-funded student through Bible Collge and I do not believe that fee-help should be used to help people through college if the intention is to never repay it. (last sententce modified to remove “rort” which is far too harsh and incorrect a description - sorry.)

In my current MA course I have deliberately chosen to pay for it out of my own funds (admittedly a ministry benefit fund) so as not to have a Fee Help debt I would never repay.

I’m not planning on paying back any of my (large) HECS or FEE HELP loans.

hi Danii - there is no question about the lawfulness of it all, but if you were quoted in the SMH saying this do you think most punters would put you into the category of good citizen or unwanted costly burden to taxpayers?

there are many things that our laws allow, but the question is whether it is appropriate to be percieved as expoliting them. Will it damage the credibilty of our witness before a watching (and sceptical ) world?

Jeremy Halcrow - 15 January 2008 01:19 PM

No I think you’ll find its an unintentional anomaly and that the public won’t see it as a ‘little unfair’ but as a tax dodge.

BTW - Am a correct to assume that churches don’t have to pay the fringe benefit tax on clergy accommodation costs that would apply to other occupations if their salaries were packaged in a similar way??

You’re combining two issues which I see quite separately. “Clergy” getting tax breaks is quite another thing to HECS.

hi Danii - there is no question about the lawfulness of it all, but if you were quoted in the SMH saying this do you think most punters would put you into the category of good citizen or unwanted costly burden to taxpayers?

there are many things that our laws allow, but the question is whether it is appropriate to be percieved as expoliting them. Will it damage the credibilty of our witness before a watching (and sceptical ) world?

Well hopefully they’d also quote me saying that I plan on living on almost nothing in some distant country giving a people forgotten by the world God’s word. And yes, I suspect the world would not approve at all.

I think my comments may have sounded a bit harsh earlier.

To clarify: I don’t think we should be questioning whether individual ministers are acting ethically by merely doing as the taxation system obliges of them.

[comment withdrawn]

Danni said:

You’re combining two issues which I see quite separately. “Clergy” getting tax breaks is quite another thing to HECS.

[comment withdrawn]

That said, your case, as a future missio is an entirely different situation and is equivalent to any individual trained in Australia who ends up living o/s.

Jeremy Halcrow - 15 January 2008 01:19 PM

I think people are forgetting that the system is designed this way. The community may think it’s a little unfair, but the government has written the laws cause it wants this system.

No I think you’ll find its an unintentional anomaly and that the public won’t see it as a ‘little unfair’ but as a tax dodge.

BTW - Am a correct to assume that churches don’t have to pay the fringe benefit tax on clergy accommodation costs that would apply to other occupations if their salaries were packaged in a similar way??

Wrong Jeremy. The system was designed in full knowledge of this. Be a journalist & do some real research - go to Moore College and ask for the reams of material they produced in discussion of FEE-HELP. It includes information from discussions with the relevant authorities.

About FBT: I think the official position is that fringe benefits for clergy are taxed at 0%, which makes them non-reportable.

The fringe benefits may not be reportable for income tax purposes, but the diocesan renumeration handbook says at least some benefits are taken into account for Centrelink related payments.

I don’t doubt that the college said that these amounts may not ever be paid back.  What concerns me is that the system was designed so that it would lead to many Anglican ministers or potential Anglican ministers susceptible to a change in government policy (which includes either a change in the repayment thresholds, a change in the FBT rules or a change in availability of FEE-HELP loans). 

There is no guarantee that tax rates or repayment rates cannot be increased in the future when a government decision maker sees all these debts in existence and decides to get them repaid.  FEE-HELP may be an overall positive, and it is a good option where people would otherwise have had to saved tens of thousands of dollars before going to college, but I’m not sure that this changes the fundamental criticism.

I do however think that if a person has been given by God the financial means to get themselves through bible college without government support, they should seriously consider doing so, even if that requires working in the secular workforce for a longer period of time than they might have otherwise.

Chris… play fair bro ;)

1. Are these documents available to the public? If not, why would you expect MTC would give them to me?

2. Are you suggesting that the Federal Government has knowingly entered into a situation to pay for theological education?

I suspect the world would not approve at all.

Hi again Danii,
I don’t need to tell you there is a diffence between suffering for righteousness sake and suffering becasue we do wrong (1 Peter 3:8-18).

I don’t want to suggest you are on a slippery slope but shouldn’t there be a little more principle behind the pragmatism?
i.e getting trained is good, going ot the nations is good, therefore enslaving myself to a loan I have no intention of repaying is good?!  This seems a lttile too utilitarian is it not? What happens to the principle of doing good to all - both the nations and australian taxpayers?

Hi Chris, I am sure that because Jeremy is committed to the highest quality of journalism (and has been awarded for it) he will make his way to Moore and investigate further and in the mean time will talk further about being and presenting as good citizens.

joyfully

I do however think that if a person has been given by God the financial means to get themselves through bible college without government support, they should seriously consider doing so, even if that requires working in the secular workforce for a longer period of time than they might have otherwise.

wow, they could serve the gospel of christ in the workplace! but hang on, we wouldn’t want to waste our life!!!!

in all fairness, I could not afford to pay my college fees yet had been given strong encouragements to go believing that God would provide (this was after 5 years in the work place and 2 years doing MTS.)
My wife and I decided that she would work full time - and the Lord gave her a payrise, I would work part time - and the Lord provided a contract, and we would ask freinds and family to pay our fees (independant)- and they did.  you could argue that fee help is just another way thatthe Lord has provided, excpet I find it difficult to get around the reality that it is a LOAN that should be repaid in order to let no debt remain outstanding (Rom 13:8) and that we be careful to do what is right in the eyes of everybody (Rom 12:17).

enjoy grace