Oakleigh Grammar and St John’s College Preston have sent a letter to some Victorian Members of Parliament, asking them to call on the state government to retain the payroll tax exemption for independent schools.
The letter was sent on Friday morning and is signed by the Chairmen and Principals of Oakleigh Grammar and St John’s College Preston.
It comes after the recent Victorian Budget on Tuesday announced that ‘high fee independent schools’ would have their tax exemption cut from July 1 next year. This would make Victoria the only state in Australia to impose payroll tax on independent schools.
Under the change, Victorian independent schools which charge more than $7,500 a year in tuition fees are, as reported in the media, classified as high fee independent schools.
According to the letter, “if this classification is correct, then low-to-mid fee schools such as Oakleigh Grammar and St John’s College Preston would be subject to approximately $700,000 in payroll tax for the 2024 school year.”
The school leaders said this payroll tax introduction “would jeopardise in the worst case scenario, the ongoing viability of our schools.”
“At the very least, it would impact our schools’ current curricular and co-curricular offerings and negatively impact staffing levels to continue to deliver value-for-money high quality educational programs,” they said.
The school leaders also stressed in the letter that any further increase in school fees due to the introduction of a payroll tax would put many parents out of reach financially to afford an independent school education.
“Our school fees are already at the highest level of affordability for the parent demographic of each of our schools, many of whom are still struggling to recover from the significant impact of the Covid pandemic,” they said.
“We have continued to receive a high number of hardship applications from our parents due to a higher inflation rate and rising interest rates causing mortgage stress.”
Currently, both Oakleigh Grammar and St John’s College Preston are awaiting more detail about the
classification of what constitutes a high fee independent school, with hopes a specific classification system would exempt them from payroll tax.