‘Finalising the list’: Victorian schools, parents in limbo over higher fees

Parents of Victorian private school children will be left guessing on whether or not their child’s private school fees will increase.

Victorian Premier Daniel Andrews meets students from Mt Waverley Secondary College at Monash Tech school. Picture: NCA NewsWire/David Geraghty

Parents of some private school kids in Victoria may not know if they will be stung with higher fees until the new financial year, with the state government refusing to detail exactly which schools will need to pay payroll tax from July next year.

The surprise announcement in Tuesday’s state budget that about 110 independent schools will no longer be exempt from the 4.8 per cent payroll tax left principals and educational associations in shock, with at least one school estimating it will add up to an extra $7m to their annual costs.

Premier Daniel Andrews said on Thursday because schools can change their fees, usually by increasing them, the government will wait to inform them about who is on the hit list.

“We're just finalising that list. And I don’t think it’s unreasonable that we would have a conversation with those schools first, and let them know formally, these matters don't come into effect until the new financial year,” he said.

“We will get all this to you. But whenever you draw a line … or wherever you‘ve got one thing that’s fixed and other things that are variable, the line can move.

“There will be some that are on the cusp. The general proxy that we applied (is) if you are not eligible for the tutor initiative, you are not eligible for things like capital.

“The schools we're talking about have never been eligible for our capital program. They are seen as being in an entirely different league to your suburban, parish, primary school or low fee secondary school within that category.”

Late on Tuesday night, a government spokeswoman said: “The Government has an established process for separating low-fee from high-fee independent schools.”

“The threshold will be indexed, and we’ll have more to say about which schools will no longer receive the exemption before the new financial year,” she said.

Independent Schools Victoria chief executive Michelle Green said the lack of clarity is causing “confusion, uncertainty and anxiety” among schools, teachers and parents.

“The budget papers forecast how much the government says it will get from this tax, but the government won’t say who it will be taking the tax from,” she said.

“While the Premier has not said precisely which schools will be taxed, it’s clear from his comments and advice we’ve had from government officials is that it will be arbitrarily imposed on about 100 schools that educate about 100,000 students.”

With no confirmation from the state’s education minister Natalie Hutchins or treasurer Tim Pallas about which schools will need to pay the tax, associations including the National Catholic Education Commission chief Jacinta Collins have been left to guess that schools which charge more than $7500 in fees could be caught.

“A reported $7,500 arbitrary threshold would wrongfully categorise many Catholic schools as high-fee schools,” she said.

The measure may apply to more than 25 Catholic secondary colleges and could cost them “upwards of $1m”.

On Wednesday, Caulfield Grammar principal Ashleigh Martin told parents in an email it is “completely unreasonable” to expect schools to budget for the unexpected cost.

“With the previously exempt payroll tax of 4.85 per cent, plus the Covid impact and mental health levies estimated to total 1 per cent, initial analysis suggests Caulfield Grammar School’s costs will increase approximately $6-7m annually to cover the increased tax and levy,” he said.

“It is presumptive to assume that families can foot the bill for this poorly planned tax and levy increase,” he said.

“Adding additional inflationary pressure to Victorian families with children in independent schools is unfair and arbitrary.

“The instability these changes will have on independent schools and families could lead to further strains on the already stretched government school sector.”