Financially “dire” Anglicans in $40m property bonanza
The Anglican Church Sydney has blamed a lack of government funding for delivering poor quality aged care. It’s actually awash with billions of assets and earned enough in “revaluations” on just one of its properties – in one year – to extinguish all its child rape liabilities. That is, if it hadn’t already secretively shifted them onto its financially “dire” aged care arm. Anthony Klan reports…
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The Anglican Church Sydney booked a monster $50 million profit on a Sydney CBD office tower at the same time it shifted an extra $19m of its child rape liabilities onto its vulnerable aged care residents.
Analysis of just a fraction of the Anglican Church Sydney Diocese’s assets shows it booked an extra $49.88m “accumulated surplus” on its St Andrew’s House complex in December 2019.
The complex, comprised of a nine-level tower, five-level basement car park – and a 38-shop retail arcade leading to Sydney’s Town Hall railway station – now has net assets of $220.76m.
In the 2019-2020 financial year – the same period – the Anglican Church Sydney inexplicably almost doubled its historic child rape liabilities, increasing them by $19.14m.
Yet none of the St Andrew’s House assets are exposed to those liabilities.
While the “St Andrew’s House Corporation has elected to participate in the National Redress Scheme” for child sexual abuse victims, “there were no known liabilities as at 31 December 2020”, church accounts state.
Source: St Andrew’s House Trust 2020 financial report.
As previously revealed, in 2016 the Anglican Church Sydney Diocese transferred all of its historical child rape liabilities into its aged care arm, Anglicare Sydney.
Despite the seriousness of the matter, Anglicare Sydney management – and its entire board – have repeatedly refused to respond to detailed questions put to them since December.
The Sydney Diocese is controlled by a “Synod” headed by Sydney Archbishop Kanishka Raffel.
To date, Anglicare Sydney has been saddled with $39.25m in church sex abuse liabilities, and Anglicare Sydney funds have been used to pay at least $7.5m in abuse claims.
Anglicare Sydney is “economically dependent” on Federal Government funds, its accounts state.
Last financial year Anglicare Sydney received $248.4m in taxpayer aged care funding, which was around two-thirds of its total revenue.
Anglicare Sydney (officially called “Anglican Community Services”, or ACS) is dependent on the Federal Government. Source: Anglicare Sydney 2020-21 financial report.
The Anglican Church Sydney Diocese ran some of Australia’s most notorious children’s homes and orphanages, including facilities that were for many decades the scenes of child rape and severe physical and emotional abuse.
Among them is the Boy Charlton Home in Sydney’s Glebe, where hundreds of young boys were seriously abused over many decades – some dying from the injuries inflicted.
The Anglican Church Sydney Diocese is both the church’s biggest and most “conservative” – making headlines for donating $1m to the “No” campaign against marriage equality.
It is also one of the Anglican Church’s wealthiest, comprised of “over 400 churches” in the Greater Sydney area, covering much of the NSW South Coast, up to Newcastle in the north and Lithgow in the west.
The St Andrew’s House Complex – a $50m gain for the church in one year. Source: Supplied
The St Andrew’s House complex in Sydney’s CBD represents just a fraction of its vast assets.
The $220m complex doesn’t include the adjacent St Andrew’s Cathedral on Sydney CBD’s George Street – which the church accounts for separately.
Anglicare Sydney is one of the nation’s biggest aged care providers with over 2,000 residents across 23 homes, including Sydney’s infamous Newmarch House where 19 residents died after a massive Covid-19 outbreak in 2020.
An inquiry into Newmarch House was highly damning of Anglicare Sydney. Source: 7 News
It has been repeatedly criticised for delivering poor care, including by an inquiry into the Newmarch House tragedy.
Anglicare Sydney has admitted it is delivering care “below community expectations” – but blames a lack of funds.
The church has claimed its Anglicare Sydney business is in an allegedly “dire” financial position and is “unsustainable” in its current structure – because of a lack of government funding.
Last year, Anglicare Sydney announced it would slash 125 aged care jobs across all its 23 homes to save “$7m to $7.5m” annually in a move it said was “an issue of financial sustainability and viability”.
“If you ask whether I am comfortable with reducing the number of hours, no I am not,” Anglicare’s then CEO Grant Millard told a NSW parliamentary inquiry.
“That is not the way we want to go, but if we want to stay viable – able to operate – there is very little else,” said Millard, a tax haven specialist accountant.
(The Klaxon began revealing Millard’s tax haven past in September 2020. He announced his “retirement” from Anglicare Sydney in May 2021.)
Sydney Archbishop Kanishka Raffel. Pictured with Prime Minister Scott Morrison and wife Jenny. Source: Sydney Anglicans
In response to The Klaxon’s expose late last month, both the Coalition and ALP Opposition have criticised the Anglican Church having hived-off its child rape liabilities onto Anglicare Sydney.
On Sunday Opposition leader Anthony Albanese said if elected an ALP Government would crack down on “dodgy” aged care operators, including sending repeat offenders to jail.
Yet neither the Coalition or ALP would comment when asked whether they would take any action against the Anglican Church Sydney.
St Andrew’s House
The $49.88m profit the St Andrew’s House complex earned the church in 2019 was underpinned by a $40.1m upward property “revaluation”.
That one-year revaluation alone would be enough to cover all the church’s estimated $39.25m historic abuse liabilities under the National Redress Scheme.
The St Andrew’s House complex is held in the “St Andrew’s House Trust”.
How The Klaxon broke the story last month. Picture: St Andrew’s Cathedral.
The trust’s latest financial report shows that at 31 December 2020, the tower and car park were valued at $172m and the retail arcade at $41.5m.
“The office tower was 100% leased as at 31 December 2020,” the accounts state.
The Arcade and tower have a “net lettable area” of 22,254sqm.
One of the tenants is the St Andrew’s Cathedral School which leases several floors in the building, as well as the roof.
In 2019 the trust recorded total revenue of $54.93m, including a “fair value adjustment to investment property” of $40.06m.
The complex cost the church about $9m to build in 1975.
At December 31, 2020, The St Andrew’s House Trust had total assets of $227.67m and total liabilities of $6.91m, leaving $220.76m in net assets.
Its assets included short-term investments (such as shares) of $4.95m and term-deposits of $7.34m.
In 2018 and 2019 the trust’s net income was $9.87m and $10.22m respectively.
St Andrew’s House Trust, 2019 “operating surplus” of $49.88m. Source: Anglican Church Sydney.
In 2020 its net income was $6.927m, mainly due to the net income of the arcade being “92% lower” as a “direct result of the effect of the Covid-19 pandemic”.
In 2020 and 2019 the trust paid out $5.56m and $5.43m respectively to Anglican Church Sydney entities the “Synod St. Andrew’s House Fund” and the “Endowment of the See Trust”, the accounts state.
The Royal Commission into aged care found as many as 68 per cent of aged care home residents were either malnourished, or at risk of malnutrition, and heard that the average daily spend on resident food was just $6.
In its latest annual report Anglicare Sydney says it is “one of the largest providers of aged care services in the country” but claims it is being “significantly impacted by a funding system” that it says has “not been at the level required to sustain the levels of care that the community expects”.
St Andrew’s House Trust, net equity of $220.76m Source: Anglican Church Sydney.
Yet despite Anglicare Sydney claiming to be in a “dire” financial situation (and so unable to provide aged care residents with adequate services) its total assets – fuelled by massive taxpayer funding – had ballooned to $2.035bn by mid-2020.
The Centre for International Corporate Tax Accountability and Research (CICTAR) has found many of Australia’s largest taxpayer-funded aged care providers are siphoning off as profits large amounts of money intended for elderly care.
And many of the so-called “not-profit” providers, such as Anglicare Sydney, have been developing vast property portfolios with taxpayer money, rather than delivering adequate care.
Anglicare Sydney’s total assets have exploded in recent years on the back of huge taxpayer subsidies. Source: Anglicare Sydney. Graphic: The Klaxon
“Many of the largest non-profit aged care operators” were found to be “using public aged care funding to buy property and grow the business at the expense of quality care for residents and decent wages and conditions for workers”, CICTAR states.
CICTAR’s most recent report on the sector, released on March 28, says the Royal Commission into aged care “found a system characterised by neglect” but “despite major recommendations little has been done to reform the underlying structural problems in the sector”.
“Providing additional funding without improving transparency and accountability will not improve care,” the report says.
“Those already profiting from the publicly funded sector may line their pockets further while understaffing and neglect continue.”
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