Victorian government classify what is a ‘high fee’ independent school amid payroll tax change

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Victorian government officials have briefed the Catholic and independent school sectors about their planned payroll tax exemption change.

In the recent Victorian Budget last Tuesday, it was announced that ‘high fee independent schools’ would have their payroll tax exemption cut from July 1 next year.

According to The Sydney Morning Herald (SMH), government officials confirmed on Monday they would base their list of ‘high fee’ schools that will lose their payroll tax exemption on the same standard they used to decide eligibility for the COVID-19 tutoring program.

Under this program, access was limited to schools that charge less than $7500 in student fees.

This means Victorian independent schools which charge more than $7,500 a year in student fees will be classified as ‘high-fee independent schools’ and they would lose their payroll tax exemption.

The Catholic Education Commission Victoria executive director, Jim Miles, spoke out against this on Monday and warned there would be “significant consequences” for mid-fee schools.

The Victorian Budget was handed down on Tuesday.

Impact to Greek Orthodox schools in Melbourne:

St John’s College Preston – a Greek Orthodox school in Melbourne – charges fees of $8772 in years 11 and 12, making it one of the lowest-fee schools subject to the change.

According to the SMH, St John’s College Preston has been under review by the education regulator since last year due to fears the school is financially unviable. The school posted a $1.79 million loss in 2021 and a $1.07 million loss in 2020.

In a letter sent to Victorian MPs on Friday, school leaders at St John’s College Preston, alongside Oakleigh Grammar, reiterated this threat to their viability as a result of the payroll tax change.

The schools leaders said in the letter that as “low-to-mid fee schools” they would “be subject to approximately $700,000 in payroll tax for the 2024 school year” and this “would jeopardise in the worst case scenario, the ongoing viability of our schools.”

The letter also stressed 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.

The Victorian Department of Treasury and Finance argues the changes are fair, and told the SMH the initiative “will ensure the benefit of the exemption will only flow to schools that genuinely need support.”

Source: The Sydney Morning Herald

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