Victoria’s two independent faith-based Greek schools have raised concern and written to all members of parliament over this weeks state budget which seeks to increase payroll tax for high-fee paying schools.

In a joint letter signed by both Oakleigh Grammar and St John’s College, the schools have raised concern that Victoria would be the “only state in Australia to impose payroll tax on independent schools.”

A high-fee paying school is defined in Victoria as charging annual school fees above $7,500, an arbitrary figure which was adopted some years ago by government.

In the joint statement Oakleigh Grammar and St John’s College define their fees as “low to mid fee schools” but nevertheless have fees in excess of $7,500 and would be “subject to approximately $700,000 in payroll tax for the 2024 school year,” according to their statement.

The schools argue that they would have to make significant cutbacks in programs and reduce staff and may also impact the school fees themselves.

As low to mid fee schools Oakleigh Grammar and St John’s College say that their fees “are already at the highest level of affordability for the parent demographic of each of our schools, many of whom are still struggling to recover from the significant impact of the Covid pandemic.”

Premier Daniel Andrews said private schools have had “a sweetheart taxation deal” that was not affordable in the state’s current financial situation.

Oakleigh Grammar principal Mark Robertson (L) and St John’s College principal Andrew Ponsford. Photos: Supplied

“They have had a preferential tax treatment for a long time, and they’re running businesses,” Andrews said.

Victoria has 230 independent schools and it is estimated that 130 schools charge fees above $7,500.

Despite the dollar threshold of what defines a high-fee paying school the education minister and the treasurer will have the discretion to exempt schools from the change, which is forecast to increase revenue by $134.8 million in 2024-25, rising to $140.3 million in 2025-26 and $147.1 million in 2026-27.

In their letter to members of parliament, both Greek schools, established as registered charities by the Greek Archdiocese, have asked for clarity and “are awaiting more detail about the classification of what constitutes a high fee independent school.”

In a report in The Age on Wednesday a government spokesperson declined to confirm the $7,500 threshold but said it had an “established process for separating low-fee from high-fee schools” and would provide more detail before July.

Independent schools have historically been supported by governments to assist the sector whilst government run state schools are not payroll tax-exempt.

Oakleigh Grammar principal Mark Robertson and St John’s College principal Andrew Ponsford have strongly voiced their concerns in the current economic climate.

“We have continued to receive a high number of hardship applications from our parents due to a higher inflation rate and rising interest rates causing mortgage stress.

“In essence, the introduction of payroll tax for independent schools at large, but more so for low to mid fee independent schools such as Oakleigh Grammar and St John’s College would be catastrophic.”

Neos Kosmos also understands that Greek Community school Alphington Grammar has approached the government regarding this issue.