Victorian Minister in charge of tax lobbied against it

Victorian Education Minister Ben Carroll lobbied against his government’s controversial move to abolish a tax exemption for high income private schools – a tax of which he is now in charge.

Victorian Education Minister Ben Carroll lobbied against his own tax. Picture: Wayne Taylor

Victorian Education Minister Ben Carroll lobbied against his government’s controversial move to abolish a payroll tax exemption for some private schools – a tax he is now in charge of administering.

The Weekend Australian has obtained a letter dated June 16, 2023, written by Mr Carroll while he was public transport minister. It was sent to then-education minister Natalie Hutchins and expressed concerns about the payroll tax changes imposed on high-income private schools.

Mr Carroll, who is now also the Deputy Premier, told Ms Hutchins that he had been invited to visit Penleigh and Essendon Grammar School, a private school in his electorate of Niddrie, “to discuss various issues that ­impact the school”.

“Their greatest concern was the proposed introduction of the private school payroll tax,” he wrote. “I have included a letter from the principal which outlines their concerns but one of the main issues I drew from the conversation was the lack of consultation and forewarning in the introduction of this tax.

“It was requested of me as the local member of parliament to raise these concerns, therefore I hope you can take the attached letter into consideration when finalising your decisions.”

Since July 2024, non-government schools that receive an ­income of more than $15,000 per student have been liable for payroll tax. In a statement on Friday, Mr Carroll said: “Every government school in Victoria pays payroll tax and I believe it is fair that the highest-fee private schools also contribute.

“We listened closely to schools on this policy – 92 per cent of non-government schools have retained their payroll tax exemption and only Victoria’s highest-fee schools are subject to payroll tax.”

The government announced it would remove the payroll tax exemption for some non-government schools in its 2023-24 budget, as part of a suite of measures aimed at repaying $31.5bn of debt attributed to the Covid pandemic.

The measure was initially set to impact about 110 schools with school fees of $7500 or more, but the government revised its policy and doubled the threshold to an income per student of above $15,000 following a backlash from the independent and Catholic school sectors.

About 60 independent schools will pay an estimated $46m in payroll tax this year, with the bill to increase to an estimated $95m next year. The Victorian government’s net debt is forecast to reach $187.8bn by June 2028.