Specialist School Among 60 Facing ‘Unfair’ Tax in Australian State

Specialist School Among 60 Facing ‘Unfair’ Tax in Australian State
Victorian Minister for Education Natalie Hutchins addresses the media at a press conference in Melbourne, June 29, 2023. (AAP Image/James Ross)

One of the Victorian private schools facing a new $322 million (US$214 million) state tax caters to children with language and learning difficulties.

Andale School in Kew has been named on a list of 60 independent and religious schools in the state to be stripped of their longstanding payroll tax exemption from July 2024.

Education Minister Natalie Hutchins set the income threshold for non-exempt schools at more than $15,000 (US$10,000) per student, capturing the specialist school in Melbourne’s inner east.

The school, which was formed in 1981 before moving to Kew in 1987, charges parents $3740 (US$2480) per term and has students aged from 5 to 13 with language and learning difficulties.

“Many students come to Andale because their learning needs cannot be met in their current education setting,” its website reads.

Opposition finance minister Jess Wilson, whose electorate of Kew takes in the school, has written to Hutchins and Treasurer Tim Pallas to highlight the case and urge its exemption.

“I cannot understand that there would be any reasons why it would be a deliberate decision by the minister or the Andrews government to put that school on the list,” Wilson told reporters on June 30.

The Victorian government and Andale School have been contacted for comment.

Last month’s Victorian budget stated about 110 high-fee schools would lose the exemption, raising $422.2 million (US$280 million) over the forward estimates.

But the threshold was set higher than initially planned following backlash from peak bodies for the independent and Catholic school sector, stripping about $100 million (US$66 million) from the budget.

Hutchins denied it was a backdown, declaring the government had listened to the concerns of schools but had to start repaying COVID-related debt.

“This is all about recovery,” Hutchins said on June 29 afternoon.

“It’s only fair that a whole range of organisations across the state, including the business sector, including our really high profiting, high fee-paying private schools, are part of that payback plan.”

Of the 60 schools on the list, 54 are independent and will pay the lion’s share of the tax.

Schools will have to decide if they cut educational programs and staff or increase fees to cover the cost, Independent Schools Victoria chief executive Michelle Green said in a statement.

“It will come as a financial shock to parents from a wide range of backgrounds who are already struggling with cost-of-living pressures,” Green said.

Catholic Education Commission of Victoria executive director Jim Miles, who described the tax as unprecedented and unfair, suggested some schools would end up paying more in payroll tax than they receive in recurrent state grants.

“It should also be made clear that the government sector, in effect, pays payroll tax to itself,” Miles said.

“It’s completely misleading to say this new tax results in equal treatment of school sectors.”