Victorian private schools are among a chorus of critics of the state’s latest budget, after payroll exemption for schools with “high fees” was cut and landlords and big businesses were hit by new taxes.
To help repair the state’s budget bottom line, the Andrews government on Tuesday revealed more than 100 private schools will no longer be shielded from payroll tax in a budget measure the opposition and independent education sector warns will lead to higher fees for parents.
The opposition on Tuesday took aim at the measure – which will come into effect mid-next year and will deliver an extra $420m over three years.
“It’s opened the ability for the treasurer, together with the education minister, to effectively whiteboard a hitlist of independent schools right around the state,” said the shadow treasurer, Brad Rowswell.
Michelle Green, the chief executive of Independent Schools Victoria, said the announcement was made without consultation and accused the government of using an “arbitrary” definition of a high-fee school.
“This news is a shock to independent schools and will be greeted with dismay by the parents who send their children to them,” she said.
Green said the state government had long adopted the definition of “high-fee” schools as those that charged over $7,500 in annual fees, but argued it captured those in the mid-range.
She warned the decision would have an impact on the education of students at the state’s independent schools.
But the Australian Education Union’s Victorian branch president, Meredith Peace, the said “everyone needs to pay their share.”
The government’s budget also involves a Covid debt repayment plan that involves a hike to taxes paid by medium to large-sized businesses – as well as for owners of investment properties and holiday homes – to raise $8.6bn over four years.
The government also hopes to save about $2.1bn by cutting up to 4,000 public service workers in the next financial year. All three measures were met with fierce opposition.
Karen Batt, the Victorian secretary of the Community and Public Sector Union, said the cuts were a “cynical political exercise” that would affect the quality of the state’s frontline services.
“People should come first and public sector workers have families and face cost pressures like everyone else,” she said.
The Property Council warned the land tax could be passed on to tenants, while the opposition labelled the land tax increases a “tax on renters.” The council’s Victorian executive director, Cath Evans, said it would cause significant pressure on the Victorian economy.
“There will be landholders who for the first time will be paying land tax, which of course could men increased costs being passed on potentially to renters,” she said.
But Evans backed the abolishing of stamp duty on commercial and industrial properties in favour of an annual land tax.
The Greens were also critical of the budget, saying in the pursuit of surpluses in two years’ time the government had failed to support Victorian renters and those bearing the brunt of the cost of living crisis.
“We’re seeing next to nothing for renters, next to nothing for public and affordable housing. These are the big challenges this budget needed to address and it’s failed to do so,” said the Greens’ finance spokesperson, Sam Hibbins.
The party’s support, as well as that of several other progressive crossbenchers in the upper house, will be pivotal for the government to pass its budget.
When approached by Guardian Australia, several crossbenchers said they were yet to form a position on the budget, though one MP said they were glad it had spared small-to-medium-sized businesses and households from the new tax measures.
“I can’t imagine everyone will be happy but that does make sense to me,” they said.
Paul Guerra, the chief executive of the Victorian Chamber of Commerce and Industry, said the budget was treating big business and property owners as “as an ATM.”
But the treasurer, Tim Pallas, denied there would be a flow-on effect to rent.
