Most schools taking up government money in exchange for scrapping parent donations will be worse off, forcing them to axe essential learning experiences, MPs have been told.

Michael Williams, principal of decile 7 Pakuranga College, told Parliament's education select committee this morning his school will be $300,000 out of pocket if he accepted the Government's offer.

He said most schools would be similar positions, and this position was backed up by primary teachers' and principals' union NZEI.

Budget 2019 included $265.6 million over four years for the Government to pay $150 per student to every decile 1 to 7 schools that axed parent donations.

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Williams said the offer put him in a lose-lose situation; accepting the government offer would see money from donations half, and not accepting it would earn the ire of many parents, who would refuse to pay any donations.

Pakuranga College has about 2000 students, and $150 per student would amount to $300,000.

Donations for school trips and activities added up to $300,000 a year, which doubled when combined with general school donations.

"This bill will give me $300,000 to replace the $600,000 - or $300,000 down the gurgler. I could not accept the offer," Williams told the committee, which is considering a bill that would implement the policy.

He anticipated that rejecting the offer would prompt parents to cut their donations by a total of $200,000.

"Parents would look at me and say, 'You were offered $150, so I'm not going to pay the general donation.' So my choice at the moment is lose $300,000, or lose $200,000."

Other schools also faced losing money by taking up the government offer, including a decile 2 school, Edgewater College, which he said would lose $8000.

"Most secondary schools, when they start doing the sums, will realise they will probably lose money or break even at best."

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NZEI senior professional advisor Karina Bird backed this up, saying that $150 per student was "looking a lot smaller than than what schools get through donations".

NZEI national secretary Paul Goulter welcomed the bill's intent, but said it didn't address "the fundamental under resourcing of schools".

He said schools were unhappy that deciles 8, 9 and 10 missed out, though Education Minister Chris Hipkins has said they may be included later.

Williams said another unintended consequence would be creating a bigger divide between what schools can offer, one of the key problems that the current Tomorrow's Schools review is trying to addressing.

"If this comes in, I will have to stop lots of activities because we won't be able to financially do it. Schools around me will offer them.

"Parents do not move because of who's got the cheaper school donations. They move for quality of learning experience. What we will see, if this goes through, is parents moving to the schools that [can still offer] those experiences."

Denying students those opportunities was "almost criminal".