On Thursday, the Victorian government retreated on its new payroll tax for non-government schools. Now the new payroll tax will apply only to those schools that charge $15,000, or more per student.
Originally, the threshold was $8,000, which would have put Greek independent schools such as Alphington Grammar School in Alphington and John’s Greek Orthodox College in Preston under economic pressure.
The new payroll tax was announced in the Victorian Budget last month and is set to come into effect on July 1, 2024. The government stated that it aims to “support the recovery of emergency COVID spending over the past three years.”
On May 31, Neos Kosmos reported on the concerns expressed by principals of St. John’s College and Oakleigh Grammar, concerns echoed by Catholic, Islamic, and Jewish schools.
The two Greek schools’ principals said that they provide an “essential service to the Greek community with respect to language and culture” and warned that the payroll tax could jeopardize the ongoing viability of the schools.
The advocacy efforts of the Greek Community of Melbourne, the Greek Archdiocese, as well as a host of Catholic and other low-fee independent schools seems to have forced a partial retreat from the government.
In a statement, Minister for Education Natalie Hutchins said, “We’re making sure exemptions from payroll tax flow to the schools that genuinely need support.”
“We continue to support non-government schools through programs like a $450 million investment for new buildings and upgrades in this year’s Budget.”
Neos Kosmos understands through discussions with the government that there have been consultations with the independent schools’ sector and the Greek community on the issue.
The government said that more than 660 non-government schools will remain exempt, while 60 schools (8 per cent) will fall under the new provision outlined in the budget.
And stated that it funds approximately $1 billion for operating expenses to non-government schools each year and highlighted that “funding for non-government school students has grown by 8 per cent per student in real terms since 2014-15.”
The government said it allocates $450 million over four years to continue the Non-Government Schools Capital Fund, which supports new builds and upgrades at low-fee Catholic and independent schools. This funding builds on the $522 million previously invested in non-government school infrastructure since 2015.
Despite the government’s change of heart the Victorian opposition has vowed to repeal the tax if elected in 2026.
“We will continue to fight this measure; it is punitive and unfair,” Opposition Leader John Pesutto told Neos Kosmos.
“Make no mistake, this is the thin edge of the wedge,” Pesutto warned.
He said that even with exemptions, there is will be no guarantee that Greek independent schools will not face the tax in the future.
For a list of schools liable for payroll tax, visit vic.gov.au/payroll-tax-non-government-schools
