Father Peter Confeggi, a parish priest at Mount Druitt, said there was also a "large amount of dissatisfaction" with the spirituality that will be taught during the event, with many fearing it would be a right-wing brand of Catholicism.
Others within the church who did not want to be named told The Sun-Herald of similar concerns about the six-day event, which will cost the church an estimated $150million and NSW taxpayers at least $86million.
"There is a great dissatisfaction with the Restorationist spirituality, which is also devoid of any commitment to social justice," Father Confeggi said.
Father Confeggi said his parish was one of the most disadvantaged in Sydney.
He said the church and state funds could be directed elsewhere, including to the 120,000 people sleeping homeless in Australia or education of the disadvantaged.
"To keep the church doors open here in Mount Druitt we scratch week after week after week," he said.
"The bottom line is this is a gross embarrassment to the church that I serve."
Father Confeggi said it was an "utter scandal" that a chalice, Communion plate and vessel to hold Communion hosts - adorned by Argyle diamonds and being made for a rumoured six-figure sum - would be given to the Pope.
Yesterday Bishop Kevin Manning, the Bishop of Parramatta and member of the local organising committee for the event, defended it, saying it was "an investment in the future of the Church and society".
"World Youth Day is about renewing the faith and ideals of young people so that they, too, will work for social justice and charity and will carry forward the works of the Church in these areas," he said.
"The Catholic Church is the largest non-government provider of education, health care and welfare services for the disadvantaged in Australia and the world and we want to ensure that such works continue and are strengthened in the future."
He said World Youth Day would "renew Australia's commitment to a fair go, produce a new generation of leaders committed to justice and charity, and also guarantee that the significant contribution the church makes to the care of the most disadvantaged continues".
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