Wealthy Victorian private schools not ‘exempt’ from dire new taxes

Private schools may be forced to scrap programs, sack teachers or raise fees, after treasury officials refused to grant exemptions to new state budget taxes. See the full list of impacted schools.

Wealthy private schools may be forced to scrap programs or sack teachers after treasury officials refused to grant exemptions to new state budget taxes. Picture: David Geraghty

Treasury officials have not planned to grant any exemptions to the new taxes imposed on wealthy private schools.

In a briefing to opposition MPs on Friday, officials said the government would be left with a budget black hole if it were to grant any exemptions to the new taxes.

Tuesday’s budget revealed the state government’s decision to remove a longstanding payroll tax exemption from 110 schools with annual fees of more than $7500, raising $421m over the next three years.

Schools are able to apply for an exemption from the change, but opposition spokesman for government scrutiny, Nick McGowan, said it was clear none could be granted without impacting the state’s net debt position.

“This is a craven move. While the premier says schools can apply for an exemption, his budget assumes not a single exemption will be granted,” he said.

“Based on the governments own costings, they don’t allow for a single exemption from this insidious schools tax.

“Principals will be left in the unenviable position of cutting programs, sacking teachers, raising fees or all of the above.”

Some education insiders urging the income of parents used to determine horror funding cuts.

More than 100 private schools will be affected.

Schools have already flagged they will have no option but to raise fees by up to $1000 a year.

More than 100 Victorian private schools will be impacted. Picture: David Geraghty

A government insider said the schools affected “know who they are”.

“There are a range of factors that they will be taken into account and it will be elite schools at the top end,” they said.

One school financial expert said taking into account parents’ capacity to contribute – known as CTC – would be “seen as more fair and reliable” than taxing all high fee schools.

The Herald Sun has identified more than 50 schools with high parental taxable income and fees over $7500, led by Lauriston, Scotch College and Loreto Toorak.

Federal Liberal Senator Sarah Henderson said the move was “another decision from a high-taxing, high-spending Labor government which will only result in higher school fees for thousands of Victorian parents.