As Australia’s leading provider of education-purposed financial savings and investment plans, we have a long-term focus rooted in the knowledge that quality education for all is a cornerstone of well-being and sustainable development.

Our vision is for a society where everyone has access to the education and lifelong learning opportunities needed to fulfil their aspirations. As such, we were concerned by the Victorian Government’s recent Budget policy announcement seeking to remove the payroll tax exemption from many independent schools across Victoria.

Our view is that burdening schools with surprise taxes on staff numbers was at odds with other laudable government initiatives, including at the Federal level, aimed at reducing the teacher workforce shortage.

In a letter from our outgoing CEO Ross Higgins to The Hon. Natalie Hutchins MP, Victorian Minister for Education and Minister for

Women, we laid out our broad concerns:

• The exemption’s removal would increase operating costs for independent schools and create a perverse and unintended incentive to reduce workforce numbers at a time when there is an evident teacher shortage.

• Independent schools in regional areas face greater challenges in attracting and retaining staff compared to big cities. Any policy making it more expensive or difficult to attract and retain teachers to regional areas should be avoided.

• This policy would likely result in schools passing on increased costs through higher fees. It would raise the cost of education for Victorian, and only Victorian parents.

• Any independent schools subject to payroll tax will, for the first time, be forced to pay both the new mental health levy and the new temporary higher payroll tax levy.

• Independent schools are community organisations and are not-for-profit so any argument that surpluses are not reinvested appropriately for educational benefit is unfounded.

Citing our exclusive research on the cost of education to which our members have long contributed their own experiences, we suggested that if the Victorian Government remained intent on introducing its new policy, it should ideally:

• Significantly raise the proposed $7,500 per annum fee threshold by which an independent school falls into the non-exempt category. Futurity’s own research shows the average independent secondary school in Australia currently charges over $11,500 per annum in fees.

• Provide the payroll tax exemption for all independent schools who operate in regional areas of Victoria, and to all independent schools who can demonstrate they cater to a significant cohort of First Nations students.

• Ensure the threshold is regularly reviewed and increased in line with the cost of education more generally.

The Cost of Schooling in Australia report highlights Victoria as an already expensive place to be educated compared to other places in Australia, irrespective of whether children attend an independent school or a government school. We found Melbourne is the most expensive city for a government education in the country, with total costs some 17% above the national average.