Catholic Inc: What the Church is really worth
By Royce Millar, Ben Schneiders & Chris Vedelago
February 12, 2018
|$9 billion+ Total wealth
||$30 billion+ Total wealth
||$45,800 average ($68.7 million total) Payments to child sex abuse survivors under church redress schemes
|Cathedral Place, East Melbourne|
An Age investigation reveals for the first time the value of the Catholic Church’s wealth in Australia and raises serious questions about compensation payments to victims of child sex abuse.
The Catholic Church in Victoria is worth more than $9 billion, making it the biggest non-government property owner in the state and much wealthier than it has admitted in evidence to major inquiries into child sexual abuse.
A six-month investigation by The Age has found that the church misled the Royal Commission into Institutional Responses to Child Sexual Abuse by grossly undervaluing its property portfolio while claiming that increased payments to abuse survivors would likely require cuts to its social programs.
Figures extrapolated from a huge volume of Victorian council valuation data show the church has more than $30 billion in property and other assets, Australia wide.
Based on these figures, the church is clearly the largest non-government property owner, by value, in the state, and close to the largest in Australia, rivalling giant Westfield, with its vast network of shopping centres and other assets.
The church also has extensive non-property assets including Catholic Church Insurance and its own internal banks – often known as Catholic Development Funds – which have total assets of several billion dollars, including more than $1 billion in Melbourne.
And it has other investments, including in superannuation and telecommunications. A church-owned fund manager has more than $1.4 billion under management.
Asked specifically to nominate a value for the assets of the church and its associated entities, Melbourne archdiocese communications director Shane Healy said such information was “not available”.
Results from the investigation come in the wake of the royal commission, and four years after the tabling of the Victorian parliamentary inquiry into abuse.
They raise serious new questions about the church’s decades-long bid to avoid or minimise compensation payments to abuse survivors.
The royal commission reported that payments averaged just $35,000 under the Melbourne Response, the compensation scheme established by the then archbishop George Pell in 1996, a total of $11.3 million to 324 survivors of child sexual abuse.
In 2015, the Melbourne archdiocese paid $39 million - more than three times the total compensation amount - for new premium offices, the heritage-listed Industry House in East Melbourne, near St Patrick’s Cathedral.
“These figures confirm what we have known; there is huge inequity between the Catholic Church’s wealth and their responses to survivors,” said Helen Last, chief executive of the In Good Faith Foundation, which supports abuse survivors.
“The 600 survivors registered for our foundation’s services continue to experience minimal compensation and lack of comprehensive care in relation to their church abuses. They say their needs are the lowest of church priorities.”
Healy said the church's meeting the claims of survivors whose complaints of abuse were upheld was “amongst its highest priorities”. He said that since that report the church had paid an extra $17.2 million to survivors.
The Age’s investigation also calls into question the privileges the church enjoys, including exemptions from nearly all forms of taxation and billions of dollars in government funding each year to run services - $7.9 billion for its Australian schools alone in 2015.
It involved obtaining property valuations from 36 Victorian councils, including most of the Melbourne metropolitan area, Geelong, Ballarat and Bendigo, many under freedom of information.
It identified more than 1860 church-owned properties with “capital improved value” (land plus buildings) of just under $7 billion.
While the property portfolio features many churches, presbyteries, schools and hospitals, it also includes offices, residences, car parks, conference centres, tennis courts, mobile phone towers and a restaurant.
The church would find it difficult to realise the value of St Patrick’s Cathedral in East Melbourne, but a large proportion of its properties can be bought or sold, and smaller churches and other properties regularly are.
The Age has used the property and other financial data to extrapolate to wider Victoria, and nationally, arriving at a conservative estimate of more than $9 billion in Catholic Church-owned wealth for the state, and more than $30 billion across Australia.
The church is notoriously secretive about, and protective of, its wealth. Church leaders have repeatedly publicly underestimated church assets and resisted greater financial accountability.
In 2013, the Victorian parliamentary inquiry into the handling of child abuse by religious and other organisations requested on notice details about church assets from Archbishop Denis Hart and his executive director, Francis Moore.
The Age can reveal that, despite the committee writing to Hart and Moore reminding them of their obligations to the Parliament, the information was never provided.
“The value of the church’s assets is a question that remains unanswered,” said Liberal MP Georgie Crozier, who chaired the parliamentary committee. “It is a question I would still like answered.”
“It appears,” Ms Crozier told Cardinal George Pell in 2013 in his appearance before the inquiry, “that the leadership within the Catholic Church has been misdirected and geared towards the protection of the church and its assets”.
Asked about the value of church assets Pell responded: “One, I do not know. Secondly, it would depend a bit how you define them — you know, what value is there in a church building?”
The Melbourne archdiocese was again quizzed about its assets by the royal commission in 2014.
This time it provided a report of its main financial arm, the Roman Catholic Trusts Corporation, which valued its properties in the Melbourne archdiocese at just $109 million.
This, despite it owning hundreds of schools, churches and other assets.
In fact, The Age investigation has found the archdiocese owns about $115 million in property in the working-class, south-east suburban Melbourne municipality of Greater Dandenong alone.
The fine print of the report reveals the properties disclosed to the royal commission were valued at “historical cost” – that is the amount paid for properties when they were originally acquired, often in the 1800s or early 1900s.
Many, presumably, would therefore be valued at nothing, because they were government land grants. The fine print discloses other investments in shares, convertible notes and what appears to be commercial property of $72.9 million.
Healy did not respond to a question about whether it had grossly undervalued the property assets of the church.
He defended the use of historic cost accounting and said it was approved by its auditors. But he confirmed the archdiocese insured its property on commercial - not historic - terms.
Catholic Church finances are complicated by an ancient, disaggregated structure that has allowed church leaders to sidestep questions about overall wealth, and made it notoriously difficult for abuse survivors to identify a defendant to sue for damages.
The church includes 28 administrative dioceses and dozens of religious orders across the country.
But the Catholic church also often presents itself as a single institution.
In an internal research paper on employment published in November, the church is described as “one of Australia’s largest employers” with a staff of 220,000 people across 3000 agencies.
Many researchers have attempted to estimate the wealth of the church in Australia and globally, but the efforts have been stymied by a lack of reliable financial data.
But in 2013, in response to the Black Saturday bushfires, the Victorian government introduced a fire services levy that applied to all landowners including, for the first time, churches. Properties affected have to be valued to ascertain the appropriate levy.
In evidence to the royal commission, the church repeatedly warned that boosting compensation payments to victims could lead to cuts to social programs.
Mr Healy said the church had borrowed money to pay sex abuse survivors “which will be repaid from asset sales’’ and the church would continue to meet the cost of claims from its own resources rather than parish assets.
“As a significant contributor to society the archdiocese will continue to fund programs that support the vulnerable and needy and meet its legal and reporting obligations to the ACNC (Australian Charities and Not-for-profits Commission) and other regulatory authorities to which it is subject,” he said.
How we did the calculations
Obtained council valuation data for 1860+ properties in 36 municipalities through freedom-of-information
These valuations totalled $6.9 billion in capital improved value in church-owned property.
The data is now two years old so we assumed a highly conservative increase in property values of the consumer price index (CPI) since then.
We used conservative assumptions to extrapolate for 41 rural councils and two outer metro councils to arrive at more than $7.7 billion in church-owned property in Victoria.
The Church in Victoria has other significant assets including more than $1 billion in deposits in a Church run-bank to arrive at total wealth of more than $9 billion.
We extrapolated the property assets of the church in Victoria across the nation by using a church database of the number of parishes, schools, social welfare, hospitals and nursing homes in each state.
We then used conservative assumptions to arrive at total property wealth of between $25.7 billion to $29.6 billion.
We also detailed the non-property assets of a number of national church entities (such as insurers, hospitals) totalling more than $4.3 billion.
We arrived at total Catholic property and other wealth in Australia of at least $30 billion.