Catholic schools up fight against payroll tax, government open to lifting exemption threshold

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The education minister has said the government is open to lifting the private schools payroll tax threshold even further as Catholic schools urge families and principals to lobby their local MPs against the plan to slap payroll tax on mid-priced and high-fee schools.

Melbourne Archdiocese Catholic Schools (MACS) is seeking to mobilise school communities against the tax, which was originally targeted at the 20 Catholic schools and 90 independent schools that charge more than $8000 a year.

Xavier College in KewCredit: Eddie Jim

After a backlash from non-government schools, the government on Wednesday said it was open to sparing schools that charge students less than $13,000 a year.

MACS on Tuesday urged the school community to seek meetings with their local Labor MP and forward letters of protest over the tax plans.

“As a parent, I have chosen to educate my child at a Catholic school because I believe it offers the best fit for my child’s needs, while keeping fees affordable for my family,” the MACS letter says.

“The proposed new payroll tax would require affected schools to make difficult decisions relating to their teaching and learning opportunities, facilities, and fee levels at a time where everyone is feeling cost-of-living pressures.

“Hardworking parents in your electorate, like me, should have the right to expect that if we choose a Catholic education for our child that we will not be targeted by taxes that would affect our child’s education.”

The removal of the payroll tax exemption for some non-government schools was announced in the state budget to help repair the state’s finances.

The government said the tax brought high-fee schools in line with state schools, which pay payroll tax, and would bring in $422 million over three years.

But the news was slammed by non-government schools, which warned they would increase fees, cut programs and sack staff in response.

Last week, the government indicated it would revise the exemption threshold to $10,000, putting 11 Catholic schools in the firing line. Education Minster Natalie Hutchins on Wednesday confirmed the government was open to lifting the exemption even further.

“Bills are always open for amendments,” Hutchins said. “We’ll be looking at the legislation and how we apply it.”

She added that she was confident the government’s tax bill would pass in some form.

Premier Daniel Andrews stressed the schools tax hike wouldn’t kick in until July 2024.

“State schools receive their budgets in September,” he said.

“It beggars belief that we can somehow organise hundreds and hundreds and hundreds of schools on a September for January timeline, and some of these [non-government] schools can’t. I think I think that there’s more than enough time to resolve these matters.”

Catholic Education Commission of Victoria executive director Jim Miles has also asked government MPs to raise the threshold, to reduce the number of Catholic schools that would be required to pay.

Only five Catholic schools – Loreto Mandeville Hall, Sacre Coeur, Genazzano FCJ College, St Kevin’s and Xavier College – charge more than $20,000 a year.

“We are asking for you to advocate to your colleagues that the proposal not proceed,” Miles wrote.

“At the minimum, the fee threshold at which schools become eligible for payroll tax should be significantly increased.”

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