Victorian Independent schools hope for a ‘no surprises’ state budget

A total of 52 Independent schools educating about 65,000 students have to pay the tax from July this year, with the number of targeted schools rising to almost 70 within five years as they inevitably reach the arbitrary tax threshold of annual fees of $15,000.

Most schools hit by the tax, which is not imposed on schools in any other state, have had to increase fees paid by parents to cover the cost.

‘The last thing school communities need are any surprises in the Victorian budget that add pressure to family budgets at a time of financial strain,’ the Acting Chief Executive of Independent Schools Victoria (ISV), Ms Meg Hansen, said today.

The tax on learning was announced without consultation in the 2023 Victorian budget.

Non-government schools had been exempted from payroll tax for half a century, since they are not-for-profit bodies providing a community service.

Some schools will end up paying more in tax than they receive in state government funding.

The last quarterly inflation figures show education costs in Melbourne have risen by 5.59 per cent, highlighting the sacrifices made by families who pay school fees from their after-tax income.

‘An assumption behind the unfair payroll tax is that all families and all Independent schools have the capacity to absorb it,’ Ms Hansen said. ‘This is false, and even more so when education costs are rapidly rising. Schools have no choice but to either increase fees or cut services to students.’

Ms Hansen said parents with children in Independent schools will be hoping this year’s Victorian budget does not include any surprise measures that limit choice.

‘There’s a growing awareness in the government and among MPs from all parties that this tax has negative consequences,’ she said. ‘We will continue to advocate for it to be scrapped.’