Scrap the tax on learning
The payroll tax on non-government schools doesn’t add up.
It should be scrapped.
Victorian Parliamentary Budget Office (PBO) report on the likely impact of payroll tax
18 October 2023
The Victorian Parliamentary Budget Office (PBO) has prepared a report on the likely impact of payroll tax on additional non-government schools that are likely to become liable for payroll tax by 2029 as their fees rise above the $15,000 threshold.
The report, prepared at the request of the shadow education minister, Ms Jess Wilson, estimates that 18 additional schools will be liable for the tax by then. Fifteen of these are Independent Schools.
In comments to the media, ISV Chief Executive Michelle Green said:
‘This independent estimate of schools that will be liable for the tax by 2029 includes schools serving the needs of hard-working aspirational families, with no or extremely limited capacity to absorb it.
‘The only way to avoid the tax is to not increase fees, even by a modest amount. This is impossible, given rising cost pressures and the need to maintain services for students.
‘Schools which will be hit by the tax from next year have had no alternative but to reluctantly increase fees, even as they have sought to cut costs elsewhere.
‘Widening the tax net breaches a clear written commitment that non-government schools were given at a meeting with Department of Education officials on 27 July, that the list of schools liable for the tax “will be held constant until 1 January 2029”.
‘Despite our opposition to the tax, we continue to work with the government and seek to build a cooperative relationship with Education Minister Ben Carroll.’
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A tax on families
Lowther Hall Anglican Grammar School parent
Shani Martin’s daughter Aria was born with a disability. The early intervention that Lowther Hall Anglican Grammar School provides has been integral to her learning.
But Shani and her husband are already at full working capacity.
If the payroll tax is passed on to parents, Shani says they won’t be able to afford the type of learning environment that Aria needs.
Presbyterian Ladies' College parent
“Unlike the public perception that only rich people send their kids to Independent schools, that’s not the case for us… We know many parents who are in similar positions.”
Rashmi sends his kids to Presbyterian Ladies College and he and his wife work hard to make sure they can support their kids through Independent schooling.
If the payroll tax is passed on to parents, many will have no choice but to remove their kids from Independent education and put them into public schools that are already struggling.
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A tax on learning is a tax on families
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Payroll tax on Independent schools doesn't add up
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ISV Perspectives blog
The learning tax must go
‘The imposition of payroll tax on non-government schools doesn’t add up. It should be scrapped,’ writes ISV Chief Executive, Michelle Green.
‘Since payroll tax was first adopted in Victoria over 50 years ago, non-government schools have been exempt. That’s because Independent schools are not-for-profit organisations that provide an essential service: a sound education that allows families to choose a school that matches their values and their aspirations for their children.
‘The Victorian Government’s decision to impose payroll tax on these schools is unprecedented. No other state does it. It will apply to schools the government arbitrarily declares as ‘high fee’, using a formula that only the government knows.’
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about the payroll tax
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