By Bridie Smith
Australia’s oldest progressive school will sell a section of its Kew primary school campus ahead of controversial changes to state payroll taxes which could cost the small school hundreds of thousands of dollars.
Preshil, an independent prep to year 12 coeducational school is $4.25 million in the red and facing a payroll tax bill of about $300,000 a year from July 1. The sale is expected to recoup up to $2.4 million.
Preshil may also sell and lease back part of the Blackhall Kalimna secondary school campus.Credit: Penny Stephens
In an online meeting with members of the school community on Monday, the school board and new principal Aaron MacKinnon said a change to the state government payroll tax was a factor in the 94-year-old school’s decision to sell The Pines, a section of its Arlington primary school campus on Barkers Road.
“It has a financial impact for us as a small school,” a Preshil spokesperson said.
The school, which last year had 236 students enrolled, has also taken a financial hit from compensation payouts to abuse victims stemming from historical child abuse cases. Some of the legal settlements have been funded through the school borrowing money.
In 2016, John McMillan, who taught at Preshil until 1996, was found guilty over sexual offences involving students.
In the school’s 2022 annual report, school board chair Emma Zipper said that a settlement reached with a former student who was abused by a former staff member decades ago had “had an impact on the school’s financial position” that year.
Zipper did not detail the incident but added the board “commended the bravery of the victim-survivor for coming forward”.
In a letter emailed to the school community on May 15, Zipper said the board would also consider selling and then leasing back part of the school’s secondary campus, known as Blackhall Kalimna, on Sackville Street.
“We are exploring our future footprint needs and growth aspirations as part of our strategic plan,” a Preshil spokesperson said.
Independent school Preshil is selling part of its Arlington campus in Kew.Credit: Penny Stephens
“No decisions have been made to put property on the market, other than The Pines.”
The school dismissed outright the idea of a merger with nearby Carey Baptist Grammar but said that it would “consider all market opportunities that benefit our school community” when it came to the sale of the land.
The Pines was purchased in 1970 and is listed for auction on June 8. Nelson Alexander agent Cameron Ingram anticipated the 594 square metre property could fetch between $2.2 and $2.4 million.
He said as part of the school grounds, the vacant land was listed on the Victorian Heritage Register in 2005. However, it was on its own title.
“What we’re hoping for is that some of the alumni and parents may buy it and donate it to the school. That would be a lovely outcome,” Ingram said.
In a statement to The Age, the school said proceeds of the land may be used to pay down debt. It would also fund a capital works program and cover maintenance of existing heritage-listed buildings.
From July 1, the state government payroll tax will mean non-government schools with an income per student of more than $15,000 will be subject to payroll tax. This will be in place until January 2029, with non-government schools to be assessed annually. If a school’s total income per student falls below the threshold, the school will not be subject to the tax.
Opposition education spokeswoman Jess Wilson, member for the seat of Kew, said the Coalition would scrap the tax.
“This is an unfair tax that will reduce educational choice for parents,” Wilson said.
“Non-government schools come in all shapes and sizes. No school community should be forced to choose between their educational offering and paying Labor’s schools tax.”
A government spokesperson said the payroll tax would remain in place until January 2029, giving schools certainty when planning their budgets and fees. The spokesperson said more than 660 non-government schools were exempt from the tax.
“We’ve already listened closely to schools on this policy – and last year increased the threshold to make sure only Victoria’s highest fee schools are subject to payroll tax.”
With Robyn Grace
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