Anglican Church shifts $40m child sex bill onto taxpayers

The Sydney Diocese 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 the Blue Mountains and Lithgow in the west.

The intricate scheme hiving-off the Anglican Church’s historic child sex abuse liabilities was directly overseen and approved by long-time Archbishop of Sydney Glenn Davies, as well as by the entire Sydney Diocese governing body.

Experts alerted to the Anglican Church’s actions by The Klaxon said it was very possible other so-called “not-for-profit” religious aged care providers could also be engaging in similar activities to deflect their child abuse liabilities.

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.
Anglicare Sydney is the operator of Newmarch House, where 19 aged care residents died after Covid-19 swept through the facility in 2020, in what was at the time the nation’s deadliest outbreak.

Anglicare Sydney, which operates 23 aged care facilities home to over 2,000 residents, has publicly admitted delivering sub-standard aged care: which it blames on a lack of government funding.

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”.

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.

To date, Anglicare Sydney has been used to pay out $7.6m of Anglican Church child sex abuse claims.

“To date, Anglicare Sydney has been used to pay out $7.6m of Anglican Church child sex abuse claims”

Last year, Anglicare Sydney announced that due to an alleged lack of government funding, its financial situation was “dire” and that it would slash 125 aged care jobs across all its 23 homes to save “$7m to $7.5m” annually.

That was despite that NSW parliamentary inquiry, the Royal Commission into Aged Care Quality and Safety, and the independent inquiry solely into Newmarch House, all warning of a dire shortage of aged care staff.

Anglicare said its business was “ unsustainable” in its current structure, that the situation was “dire”, and that laying off workers 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,” he said.

Anglicare Sydney’s total assets have exploded in recent years on the back of taxpayers. Source: Anglicare Sydney. Graphic: The Klaxon

Anglicare Sydney’s executives and its entire board have pointed to the group’s 2019-2020 financial accounts as evidence of its alleged “dire” financial position.

Yet 2019-20 was when Anglicare Sydney was inexplicably laden with the additional $19.14m in child sex abuse liabilities, which accounts for much of its poor performance.

Anglicare Sydney’s reports state the Anglican Church child abuse liability is “held at fair value” and “calculated with reference to future expected payments”.

No explanation is given why the liability surged from $18.9m to $35.2m in 2019-20.

Anglicare’s claims of facing a “dire” financial situation are despite it receiving an eye-watering $1.5 billion in taxpayer funds in the past seven years alone.

As previously revealed by The Klaxon, the group’s assets, fuelled by massive taxpayer funding, had ballooned to $2.035bn by mid-2020.

The Anglican Church has its roots in Australia dating back to white-settlement in 1788, although it was called the Church of England until 1981.

The Sydney Diocese is controlled by a “Synod” headed by the Archbishop of Sydney.

Regarding its governance structure, Anglicare Sydney states in its 2020-21 annual report: “Six Board members (three clergy, including at least one rector, and three lay persons) are elected by the Synod of the Diocese of Sydney, three Board members are appointed by the Archbishop and two Board members are appointed by the Board.”

In 2016 the Anglican Church created Anglicare Sydney in what it called a “merger” between two of its entities – Anglican Retirement Villages (ARV) and the Sydney Anglican Home Mission Society (SAHMS).

It was ostensibly to give the church more “scale” in the aged care sector. In fact, it saw tens of millions of dollars of its historic child sex abuse liabilities hived-off to its (taxpayer-funded) aged care arm.

Anglican Retirement Villages (ARV) was created in 1959 when it opened its first retirement village at Castle Hill in Sydney’s west.

The Sydney Anglican Home Mission Society (SAHMS) was created in 1856 and has operated many children’s homes and orphanages under multiple names, including Church of England Homes, The Church Society and the Home Mission Society of the Anglican Diocese of Sydney.

It’s where the child rape liabilities exist.

While Anglican Retirement Villages (ARV) and SAHMS each had their own CEOs and management, they were both under the full control of, and fully answerable to, the Sydney Diocese and its chief, the Archbishop of Sydney.

Despite the scheme being labelled a “merger”, SAHMS still exists in its own right, and remains fully controlled by the Sydney Diocese.

SAHMS also technically still has all its historic child sex abuse “liabilities” – except these are now covered by Anglicare Sydney.

This was achieved by the newly-created Anglicare Sydney in 2016 providing a SAHMS with an “indemnity” against all its liabilities, “actual and contingent”.

Page 40 of its 2020-21 accounts state:

“Under the terms of the merger of ARV and Sydney Anglican Home Mission Society (SAHMS) in 2016,(Anglicare Sydney) has granted an indemnity to SAHMS in respect of the remaining liabilities of SAHMS, actual and contingent.”

A similar statement appears in the “notes” deep in each of Anglicare Sydney’s annual reports, starting in 2017-18, its first full year of operations post “merger”.

No mention of “abuse”, or what the SAHMS “liabilities” actually relate to, is made in any of the annual reports.

Anglicare Sydney’s annual reports show the size of its SAHMS “indemnity” started at $21.35m on July 1, 2017. That year Anglicare Sydney paid out $1.17m in abuse claims.

It paid out $1.28m in abuse claims in 2018-19, $2.84m in 2019-20 and $3.55m in 2020-21.

The size of the SAHMS “indemnity” remained relatively constant, around $20m, until 2019-20 when it inexplicably exploded to $35.2m.

The current value of the SAHMS indemnity ($31.75m) and the payouts to date ($7.6m) means Anglicare Sydney is being used to cover $39.35m of Anglican Church child abuse liabilities.

Details of the 2016 “merger” are set out in a document titled “2016 Special Session of Synod”.

It states the indemnity to SAHMS is to “cover its ongoing and historical liabilities” regarding “survivors of child abuse”.

It shows “initial discussions” about a potential “merger” commenced “about two years ago in 2014”.

The matter went cold until late 2015.

In January 2016 it was decided SAHMS and ARV would “merge” with effect “from 1 July 2016”.

On 27 April 2016 Sydney Archbishop Davies held a Special Session of the Synod to formalise the merger.

Tax Haven CEO

Highly instrumental in the “merger” scheme was lawyer and tax-haven specialist accountant Grant Millard.

The Anglican Church appointed Millard as CEO of SAHMS in 2011.

It then appointed him CEO of the new “merged” Anglicare Sydney in 2016.