Harper Sercombe
The Victorian government has been criticised by a local secondary college over its newly proposed payroll tax.
The new tax is being proposed to help reduce the state’s record debt level.
The May budget papers said approximately 110 schools, or around the top 15 per cent by fee level, would lose their payroll exemption, meaning schools with fees of more than $7500 per year would be affected.
However, since the announcement the government has backed away from this statement saying it is still to lock in a threshold.
Greenvale’s Aitken College has annual fees of $6190 to $9138 according to its website and would therefore most likely be included as a part of the reform.
In a letter to parents, principal Josie Crisara said as a not-for-profit organisation, the school should not be made to pay this tax.
“Schools do not make profits that are distributed to shareholders. They are not set up as structures that allow them to avoid paying taxes like some major corporations,” she said.
“There are no ‘sweetheart deals’ as claimed by the premier for independent schools.
“The Victorian government’s decision to remove the payroll exemption for independent schools is disappointing and short-sighted.
“The payroll tax will be a significant additional cost for schools. In effect, this is a tax on families (and hence students) and on teachers, who will bear the brunt of the cost through increases in fees and/or a cut in programs and services.
“We estimate on average an increase in fees of between 9 and 11 per cent would be required. This tax is an enormous threat to schools and how they operate.
“It will be a sad day if politicians are not held to account for decisions made behind closed doors that have significant impacts on children and educational opportunities.”
This message was echoed by Northern Metropolitan Liberal MP Evan Mulholand.
“Labor has failed to match population growth with new public schools in Melbourne’s north, leading to more families working hard to send their children to independent schools,” he said.
“Public schools in the northern suburbs are over capacity. Instead of investing in new schools, the premier’s solution is to tax independent schools, and make working parents pay more.”
Education Minister Natalie Hutchins has defended the tax and said the state opposition is “fear mongering,” in their attack.
“About 85 per cent of non-government schools, are not going to be affected by this,” she said
“Government schools in this state have long paid payroll tax, and now we are ensuring the wealthier schools do the same.
“We will be drawing a line in the sand between those low fee paying non-government schools and the wealthiest private schools in this state.”
The updated threshold, and a list of schools that will be made to pay the tax, will be determined by the minister and the treasurer by the end of the financial year.
