Global education companies are planning to open Australia's first for-profit schools targeting local primary and secondary students as early as next year.
Fairview Global, a for-profit schools network based in Malaysia, will send scouts to Australia within six months to find potential sites, with the aim of opening two schools next year and in 2015.
''We plan to have one school in the west and one in the east of Australia - cosmopolitan cities of intellects with international-mindedness,'' said the chairman of Fairview International Schools' governing council, Daniel Chian.
At present, private schools must be not-for-profit to receive public funding, a status held by Catholic and independent schools. Schools are for-profit if revenue is passed to an outside person or group for financial gain. They are legal to operate.
Mr Chian said the expansion plan was being guided by a former vice-chancellor of an Australian university who is now a member of the Fairview governing council, but would not reveal the name.
A second company, Gems Education, based in Dubai, hopes to open a school in Australia. Its original plan to start one in Melbourne was shelved two years ago.
The moves have outraged the president of the Australian Educational Union, Angelo Gavrielatos. ''These are large companies driven by a profit motive that consider education as the last bastion when it comes to untapped resources. Our children cannot be seen as a commercial resource - a plaything for companies to make profit.''
The NSW and federal education departments said they had not received any inquiries from overseas for-profit education companies.
For-profit schools are banned under Victorian law. ''The regulator - the Victorian Registration and Qualifications Authority - cannot register a school, primary or secondary, for profit,'' said a Victorian Education Department spokesman.
Some for-profit schools exist in Australia but they mainly cater to foreign students.
A Fairfax Media investigation could not identify a for-profit school aimed at the mainstream student that is part of a global brand such as Gems Education. Gems Education claims to be the world's largest kindergarten to year 12 private education provider, offering the British, Indian, US and International Baccalaureate curriculums.
The company's communications director, Richard Forbes, who is Australian, said it had received three inquiries in the past three months from Australian investors interested in setting up schools, but its focus was on developing schools in Africa and south-east Asia.
Arguing for profit-based education, Mr Forbes said US studies showed a large portion of public-system investment never reached the classroom.
''In a competitive environment, an environment where the customer - the parent - has a choice, the quality must be high or they will look elsewhere,'' he said.
The former deputy prime minister Mark Vaile is a consultant for Gems Education, which is making profits from schools in at least three countries, including Britain.
''There are schools for profit in the UK and in the US, so in an economy like Australia's there will be that level of competition, they will eventually appear,'' he said.
A former dean of education at the University of Melbourne, Brian Caldwell, agreed that for-profit schools would make attempts to break into the Australian market in the next five to 10 years.
''But I don't think it's likely to attract significant enrolments, and I don't think they are the answer to improving Australia's school education - they're not viable,'' he said.
A spokesman for the NSW Education Minister, Adrian Piccoli, gave Fairfax Media the same response as the department on the legality of for-profit schools, when asked whether he would allow for-profits to operate.