Andrews govt to backtrack on controversial schools tax

Sky News host Caleb Bond says John Pesutto has finally said a sensible thing with vowing to axe private school tax.

“If you tax private schools more it’s bad thing for schools and students,” Mr Bond said.

The government has faced fierce backlash from Catholic and private schools since announcing it would remove the payroll tax exemption for 110 schools that was expected to generate $420m in government revenue.

The Premier told the parliament’s Public Accounts and Estimates Committee on Friday that the government would revise initial plans for the tax free threshold to affect schools with average fees of $7500 or more.

“I’m not in a position to confirm what it will finish up at, but it will go up,” he said.

“There will be less than 110 schools…and the overall revenue that is derived from this measure will almost certainly be less than what is forecast.”

Mr Andrews said Education Minister Natalie Hutchins would soon be in a position to announce the new threshold.

“It would be my expectation that when the minister strikes that threshold…that we would do that once and not have to go back and do that each and every year,” he said.

“That would be an uncertain set of arrangements and we want to try and get as much certainty as we can to those schools.”

The Catholic Education Commission of Victoria on Wednesday wrote to Labor MPs on behalf of its 21,000 students and 40,000 parents, pleading with them not to proceed with plans.

The removal of the payroll tax exemption was expected to cost high-end schools up to $7m a year and add about $1000 to annual fees.

The letter signed by CECV executive director Jim Miles says the $421m tax would “damage our relationship and reverse decades of settled policy”.

“The new tax will rip up to $1m a year from the operating budgets of schools,” it said.