Education Minister won’t decide on new schools tax until laws already passed through parliament

Concerns are growing over the Andrews government’s controversial payroll tax changes as schools anxiously wait for laws enabling them to be passed.

Schools will not know if they have to pay the Andrews government’s controversial payroll tax changes until laws enabling them are already passed, prompting further concerns about the reform.

Education Minister Natalie Hutchins was on Tuesday grilled over the uncertainty for non-government schools at budget estimates just days after the Andrews government was forced into a backdown on the policy.

Last month, the state budget included plans to lift the payroll tax exemption for “high fee” schools.

It was expected to apply to at least 110 schools and rake in $420m over three years, prompting a backlash from Catholic schools, who warned it would raise fees and unfairly hurt middle-income families.

On Friday, Premier Daniel Andrews told budget estimates the threshold for this tax would now be raised to include fewer schools and bring in less money than first outlined.

Minister for Education Natalie Hutchins says she will consult with schools when the laws pass. Picture: Luis Ascui

But when asked about the specifics of this change Tuesday, Ms Hutchins said it would not be finalised until the Bill which gave her power to set this threshold had already passed as legislation.

This prompted a backlash from Western Victoria Liberal MP Bev McArthur, who said this did not address concerns from schools nervous about the new laws.

“How do you expect any school, any parent or any teacher to have confidence in this government and your proposal If you’re saying that or any or all of them could be subject to this new tax?” she said.

“You haven’t discussed anything with them.”

Ms Hutchins denied that she hadn’t spoken with schools but said she would consult when the laws pass “so we know what we’re dealing with”.

Opposition education spokesman Matt Bach has accused the government of incompetence. Picture: Luis Enrique Ascui

“I’m going to sit down with the sector and work that through,” she said.

“There will be a dollar figure (for fees) that will be drawn once the legislation passes the parliament where we look at determining what is a high fee paying school.

“We know that we know that has changed post-Covid to when we originally set some benchmarks around the money that was allocated to non-government schools from the government sector. That (figure) will be revised.

“I’ll be sitting down with the sector and talking through the methodology and giving consideration and then giving advice publicly.

“This program is not looking to begin until July 1, 2024.”

When questioned about who designed the tax change, Ms Hutchins said these decisions were considered by Treasurer, Cabinet committees and eventually accepted as a “whole of government decision”.

But she went on to say “it’s not my job to give the Treasurer advice on how he passes down his budget” when asked whether she had given him feedback on the payroll tax change.

Opposition education spokesman Matt Bach accused the state government of incompetence.

“Under Labor, Victoria is broke and hardworking families and non-government schools are being made to pay the price,” he said.

“Labor’s Schools Tax will add thousands to the cost of educating a child and make it even harder for Victorian parents to send their kids to the school of their choice.

“This is a punitive, regressive tax on learning and educational choice.”