This private school costs $24,000 a year. It says it can’t afford more staff to help kids with learning difficulties

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This private school costs $24,000 a year. It says it can’t afford more staff to help kids with learning difficulties

Private schools say the new payroll taxes imposed by the state government are starting to bite in the classroom, with one putting off employing much-needed special education teachers.

Some 16 months after the tax was introduced, Hamilton and Alexandra College in Victoria’s west says the tax has impacted daily school operations, staffing and services.

Hamilton and Alexandra College principal Dr Michael Horne said the tax is hurting the school.

Hamilton and Alexandra College principal Dr Michael Horne said the tax is hurting the school.

Principal Dr Michael Horne said the 154-year-old college, which employs support staff for students with learning difficulties and teachers in the classroom, had not been able to grow those ancillary roles to meet demand since the tax’s introduction.

“[In terms of] teacher assistance or learning support assistance, we haven’t been able to expand those in the way that we probably needed to, to be honest,” he said.

Acknowledging staff as the school’s most significant expense, Horne said that the school was not replacing some roles and was consolidating other administrative roles.

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The payroll tax was announced by then-treasurer Tim Pallas in the 2023 budget, the same year the college purchased a 45-hectare property near the Grampians as an outdoor education campus.

Horne said the property, known as Mirranatwa, was purchased for $680,000 using capital reserves. But he said calling on the school’s capital reserves to bridge the impact of the payroll tax would not be sustainable.

“[If we used capital reserves] we’d run out of money fairly quickly,” he said.

“It would be like using your savings at home to pay for your electricity bill.”

Last year, the school recorded a surplus of $462,373. Horne estimated the payroll tax would wipe out about half of the school’s projected surplus next year.

“Where we would have been able to spend that on buying new tables, painting classrooms, redoing gardens or new play equipment for our junior school, it’s really it slowed that process down,” he said.

Westbourne Grammar School, in Truganina, will also have less money following the introduction of payroll tax.

While not being specific, principal Dr Adrian Camm said the school had responded by tightening discretionary spending and delaying non-essential projects.

Like numerous schools liable for the 4.86 per cent tax – which includes COVID-19 and mental health levies – Hamilton and Alexandra College raised tuition fees, upping them by 6.5 per cent last year. The average annual increase, Horne said, was between 3 and 5 per cent.

“We knew straight away [when it was announced] that this tax was going to be an extra impost on top of what was already a really difficult financial circumstance.”

This year Hamilton and Alexandra College’s tuition fees are $24,112 a year for students in years 9 to 12.

The tax, which is projected to deliver an estimated $101.8 million to the state budget this year, applies to schools with annual fees of $15,000 or more. It will be in place until January 1, 2029.

This year three more Melbourne private schools started paying the tax, and another 10 will be paying the charge within three years.

National convenor of Save Our Schools Trevor Cobbold said it was only fair that all schools paid the tax, regardless of the sector they operated in. Payroll tax is applied to state schools across the board.

A former economist with the Productivity Commission, Cobbold said the $15,000 threshold should be scrapped, so all private schools were liable.

“They are putting up their fees faster than the rate of inflation so it’s not a big impost, and it should apply to all private schools.”

The chief executive of the Independent Schools Victoria lobby group Rachel Holthouse said schools had tried to absorb the cost, but that as time went on it had become increasingly difficult.

“What we’re seeing is the impact on schools that are being hit with the tax is acute,” she said.

Independent Schools Victoria chief executive Rachel Holthouse said schools were coming under increasing financial pressure.

Independent Schools Victoria chief executive Rachel Holthouse said schools were coming under increasing financial pressure.Credit: Joe Armao

A state government spokesperson said over 90 per cent of Victoria’s non-government schools were exempt from payroll tax.

“Every government school in Victoria pays payroll tax. It’s only fair that the highest-fee private schools now also contribute.”

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