Wednesday, 19 June 2024

Payroll Tax Amendment (Schools) Bill 2024

Introduction

Jess WILSON (Kew) (09:37): I move:

That I introduce a bill for an act to amend the Payroll Tax Act 2007 to exempt wages paid or payable in government and non-government schools from payroll tax and for other purposes.

We know in last year’s budget the Allan Labor government introduced a payroll tax on high-fee independent schools that charge more than $15,000. When originally announced, the Allan government put this in place for 110 schools across Victoria – schools that take immense pressure off the public system, off government schools.

A member interjected.

Jess WILSON: Yes, they do, because 40 per cent of children in Victoria attend Catholic or independent schools – 40 per cent – including in your electorates.

This is a bill that seeks to remove payroll tax not only on non-government schools but on government schools. The coalition has pledged not only to repeal Labor’s tax on non-government schools but also to repeal the tax on government schools. We on this side of the house do not believe that we should be taxing education. It is simply not the case that this applies across the board. We do not tax nurses; there is no payroll tax on nurses in public hospitals, like there is no payroll tax applied to nurses in not-for-profit hospitals in the private health system in this country. Why does this Labor government intend to punish parents who choose to send their children to non-government schools?

The purpose of this bill is to exempt wages paid or payable in both government and non-government schools from payroll tax. We have seen today in reports in the Age that the impact of this tax, Labor’s tax on non-government schools, will see 44 schools in the state pay in net value $19 million, far in excess of what they receive from this government in funding, for the privilege of educating children in this state to take the pressure off the government system. These schools now are paying the government to remain open, to be able to actually provide that education to children in this space.

Independent and non-government schools are not the preserve of the ultrarich, as those on the other side of the house like to speak to. This is class warfare at its very purest by this government. It is simply class warfare. Further, it was only in this recent budget by the Allan Labor government that we saw a decision to put in place a so-called $400 school bonus that is not available to parents who choose to send their children to low-fee Catholic and non-government schools – class warfare at its very purest by this government.

Now we see 58 schools on Labor’s hit list. We know that in the coming years there will be additional schools – 18 schools in the coming years – that will be added to this list, and we know that members on the other side of the house have written to the minister to say, ‘Please, please, can schools in my electorate be exempted from this tax? Can families in my electorate be exempted from this tax?’ We had the member for Mordialloc reach out and talk about the impact – the very, very clear impact – that will happen to Cornish College students if this tax is applied. This is a school, Cornish College, that has only been open for less than a decade. It has worked incredibly hard to make itself accessible to local students by providing a number of scholarships and bursaries to local families. Those programs will not be able to continue thanks to Labor’s tax on non-government schools.

This is a tax that seeks to create division in Victoria. It seeks to undermine choice. It seeks to undermine aspiration. We know from the very clear numbers that nearly 40 per cent of parents choose to send their children to non-government schools in the Catholic sector and in the independent sector, and that number is growing. Independent schools are seeing growth in this state. So despite the cries from those opposite talking about the fact that this is a fair tax because it is applied to government schools, we know that it is not really applied to government schools. It is an accounting trick. It is a way to artificially inflate the budgets of government schools. But we on this side of the house do not think that any school, government or non-government, should be paying payroll tax in this state. The coalition has pledged to remove this tax not just for non-government schools but for government schools. This bill seeks to introduce that change and seeks to make sure that parents have a choice – a choice that is not undermined by class warfare by those opposite by putting in place a tax that makes it harder for parents to choose where they want to send their children to school.

Nina TAYLOR (Albert Park) (09:43): It is interesting the little traversing that the opposition are going on with at this present moment in time to somehow suggest that they are the bastions of fairness and equity when it comes to education in this state, let alone the country, and then to put down the $400 school saving bonus as if that is somehow a negative, when we know that with the cost-of-living pressures there are families who genuinely need this support in our great state of Victoria. It is a way of helping them and helping to provide balance and fairness when it comes to the system. If you think about the significant investment that we have made both in school infrastructure and also in the recent announcement we have made with regard to phonics, we are helping again to provide balance and equity when it comes to the ability of students to have the best possible chance in life when it comes to being able to read and to be literate and also when you look at their further education into the future.

However, I do not want to be drawn into this stunt – this diversionary tactic – because of course it is a procedural motion, and if I proceed to get into the nitty-gritty of certain matters of payroll tax or otherwise, then we are absolutely taking away from the government agenda that we have set out this week. It is a legitimate agenda. We have justice legislation reforms. We had integrity reforms that we were debating last night and other motions as well. So I do think it rather galling that the opposition think that they actually have some sort of premise in this debate when it comes to fairness and equity in terms of education and so forth. We know that over 90 per cent of Victoria’s non-government schools remain exempt from payroll tax.

Every government school in Victoria pays payroll tax. It is only fair that the highest fee paying private schools now also contribute. We listened closely to schools on this policy and increased the threshold to make sure only Victoria’s high-fee schools are subject to payroll tax. So I do think it is a bit rich for those opposite to be declaring that somehow they are the bastions of equity and fairness when it comes to education and calling out elements which really undermine and take away from the pre-eminence of the otherwise strong education reforms, upgrades and so forth that we are setting in this state.

Non-government schools with income per student of more than $15,000 will be subject to payroll tax under the legislation changes which are coming into effect from 1 July 2024. This applies to schools where the annual recurrent income per student is over the threshold of $15,000 per year. The threshold is in line with national benchmarks for per-student funding set by the Commonwealth government – oh, yes, and there is that too, because we conveniently avoid the Commonwealth aspect when it comes to funding of schools in this state, particularly non-government schools. Oh, yes, we have conveniently avoided that suddenly we are not paying attention, because we know that that is absolutely a very significant aspect of funding for non-government schools. Schools that collect annual recurrent income of $15,000 or more from parents while also receiving minimum government funding of $2612 per student have resources significantly above the national benchmark levels, right?

If we are talking about equity, that is why I was calling it out before, because I was thinking: hey, has somebody done the maths on this? If you are looking at equity and fairness, let us look at the numbers. Non-government schools are fully funded as guided by the schooling resource standard. The Commonwealth contributes 80 per cent of government funding for non-government schools, with the state government contributing the remaining 20 per cent. On that premise we can see this is nothing more than a stunt. It is a diversionary tactic. It is taking away from important government business here. It will not deliver. This procedural motion is not delivering any more fairness for any student in this state of Victoria, so we are calling it out for what it is. It is a nonsense, this debate, and I would urge the opposition to get on with the business that we are here to do.

James NEWBURY (Brighton) (09:47): I rise in strong support of the member for Kew’s move to introduce the Payroll Tax Amendment (Schools) Bill 2024. This bill must be debated urgently. This is an issue that is a moral line in the sand. The state Labor government has decided to make money off children. It is absolutely outrageous. The reason that this bill must be debated today is because not only are there 58 schools which are currently caught up in the Treasurer’s attack on those children but there are 18 schools which are about to be caught up in the government’s attack – schools that are doing good work in educating our next generation. I refer to Alice Miller School in the member for Macedon’s electorate, Alphington Grammar School in the member for Northcote’s electorate, Ballarat Clarendon College in the member for Wendouree’s electorate, Ballarat Grammar, again in the member for Wendouree’s electorate, Girton Grammar School in the Speaker’s electorate, Kardinia International College in the member for Lara’s electorate and North-Eastern Montessori School in the member for Eltham’s electorate as just some examples of schools that are about to be caught by this outrageous attack. And what will we see then? We will see those members quietly write little letters to the Treasurer – and hide them. They may come out under FOI. We will not see them stand up for the kids in their communities in this place, but that is what this bill does. That is what this bill is about. This bill is standing up for the 58 schools that the government is making money out of.

Natalie Hutchins interjected.

James NEWBURY: The former Minister for Education is interjecting across the chamber. If only the minister had actually used her voice on behalf of kids when the policy was introduced.

Members interjecting.

James NEWBURY: I remember, Shadow Minister for Education, the minister consulting at one dinner about the impact. That was the level of consultation with schools. It was embarrassing for the minister to stand up and say the consultation that was done was at a dinner –

Natalie Hutchins: On a point of order, Speaker, I am not sure if there are any regulations in Parliament about the tone that is being used and the decibels that are being reached by those opposite, but I would like to put a complaint in that my ears are hurting.

The SPEAKER: It is not a point of order.

James NEWBURY: I am more than happy if the minister wants to leave the chamber. I can understand why the minister is embarrassed by this policy. I can understand why. I understand after the strong public response the minister was forced into a partial backflip, but it was not good enough. And what we have seen today is 44 schools are paying the government to teach kids – $19 million. It is outrageous to think that this is a so-called Labor government that uses catchcry words around fairness but is charging schools to teach our kids. This is a moral question, and you can see how quiet the members on the other side of the chamber are because they are embarrassed. They know the 18 schools that are about to be hit.

Then in this budget the government went further. I recall in the briefing the government gave to members how it described possible risks and the need to close loopholes. What kind of government would see children being educated as a possible risk and a loophole that needs to be changed? We know that, after the new 18 schools are caught in the Treasurer’s vicious net, members will write secret letters to their schools with their crocodile tears about how they have advocated to the Treasurer on their behalf. This bill must be debated today. This is a moral question. This is about children being treated fairly no matter where they go to school – and that is the side that the coalition is on – so we must debate this bill today.

Lauren KATHAGE (Yan Yean) (09:52): I am so glad to follow the member for Brighton, who spoke of me this morning. I would like to thank him for his continued interest and focus on me and his guidance of my career in this place. I just want to take this moment to thank him for his interest in my development. But we are not here to talk about me. We are here to talk about the bill that those opposite are wanting to introduce, and I would like to say I am worried. It seems that those opposite have discovered education again. Suddenly they have focused and realised there is this thing called education, and you know what, I worry when they do. I worry when they remember that education is a thing, because last time they did that they shut two schools in my electorate.

James Newbury: On a point of order, Speaker, this is a procedural motion about the introduction of a bill, and the member has not yet referred to the bill.

The SPEAKER: I have been pretty free with people having a debate on this bill that is being introduced. There has been pretty wideranging discussion, as the member for Brighton was enabled to do as well. Member for Yan Yean, I do remind you that this is a procedural debate.

Lauren KATHAGE: In seeking to introduce this bill, the member for Kew spoke about how important those opposite believe education to be – and a quality education – for students, and the importance of choice. I can say that the families of Plenty and Kalkallo lost choice when their schools were shut by Jeff Kennett. That reduced the choice for families, which those opposite this morning have said is so important. Those opposite are talking about a hit list. I think the idea of a hit list gets to the core of why they are seeking to introduce this today – they want to distract from the other hit list which is being announced today, which is the federal government’s nuclear sites that are being –

Jess Wilson: On a point of order, Speaker, this is a narrow, procedural debate, and I think we are straying into very different territory.

The SPEAKER: I do ask the member for Yan Yean to come back to the procedural debate before the house. This has nothing to do with nuclear energy.

Lauren KATHAGE: Thank you, Speaker, I appreciate your guidance. The other week I attended the opening of a new building in Marymede Catholic school in Doreen, a lovely school in my electorate. That building, that lovely senior learning building, was co-funded by the school and the federal Labor government, because as well as believing in and supporting education, we know that the federal government is primarily the level of government that is responsible for non-government schools. That is why the federal member was there and making a speech and whatnot. I would like to say that in the acknowledgement of country as part of that opening ceremony I was reminded of the strength and depth of Catholic social justice teaching and how important it is for many families who send their children there. I was impressed with how sincerely they sought to acknowledge the traditional owners of the land there. I would like to acknowledge them as a great school for teaching that to their children. That school charges around $7000 per year for a student to attend there for a Catholic senior education, which is less than half of the amount we are talking about here triggering payroll tax. It is a modest but high-quality school for local families, and they are not covered under what we are talking about today.

Next door to the senior school there is a kindy, and guess who paid for the kindy – that was a state Labor government. Guess how much the kindy is – it is free, because we made kindy free.

Cindy McLeish: On a point of order, Speaker, this is a procedural motion, not a time for a members statement.

The SPEAKER: The member has concluded her contribution.

Brad ROWSWELL (Sandringham) (09:58): I also rise in support of the member for Kew’s very sensible proposal to introduce the Payroll Tax Amendment (Schools) Bill 2024. Members of the Labor government in this place know in their heart of hearts that this is deeply unfair. They know that historically this state has not taxed education. They know that last year’s budget introducing a tax on education for the first time in our state’s history was the wrong thing to do. They know that, because I know amongst members of the government there are some people with a decent heart, like the member for Mordialloc, who wrote on behalf of his constituency to the Treasurer to say this is not right. I am sure that there are other members of the Labor caucus who also recognise, truly representing schools within their community, that Labor’s schools tax is not right. They know that. They are making those internal advocacy points to members of the executive, to ministers, within this government. Members of school communities right around this state who are impacted by Labor’s schools tax know it is not right because they are the people who are paying the price after 10 years of Labor and 10 ‍Labor budgets. That is why the member for Kew’s bill, the Payroll Tax Amendment (Schools) Bill 2024, must be considered as a matter of urgency in this place. It is a matter of fairness; it is a matter of equity. This government says that it governs for all. It does not; it, frankly, does not.

They also say that, yes, state schools are impacted by payroll tax and state schools pay payroll tax. But the truth of that is that there is no net impact to the bottom line of a state school’s budget. It is a simple accounting trick, an internal mechanism, within the Department of Education and within existing state schools. Frankly, that is why this side of the house has come out and said, ‘Well, under a government we lead, state schools will not pay payroll tax, because it has no net impact on the bottom line of a state school budget.’

The news today that there are some 44 of the 58 independent schools that will pay more to the state government than they receive from the state government as a result of Labor’s schools tax is an absolute abomination. It should be widely and broadly condemned. We on this side of the house are the only people in this place prepared to stand up and call this out for what it is.

I want to, in the time that I have remaining, just unpick a furphy. There is an impression on the government side of the house that those who send their kids to independent and Catholic schools are rich, that those parents who choose to send their kids to independent and Catholic schools are wealthy. Can I tell you they are not. It is often hardworking parents who are not just working one shift in a taxi but working a second shift in a taxi to earn enough dough to give their kids the best start in life. These are the same people that this government is punishing. These are the people in this state that this government is punishing. After 10 years of Labor and after 10 Labor budgets, Victorians are paying the price for the bad economic decisions, the economic mismanagement, of this government.

The only reason why they have introduced this schools tax, which is impacting Victorian families, which is limiting educational choice and which is putting principals in a situation where they need to choose between providing the best educational outcomes for their students and cutting programs or raising fees, is because this Labor government cannot manage money. The only reason they are doing this is to raise revenue. That is the only reason they are doing it. They are raising more revenue than they have ever raised before, and yet taxes are going up and debt is going up. Surely after 10 years of Labor and after 10 Labor budgets there are some members of the Labor caucus or some members of this government who would actually recognise that it is not working and that it is Victorians – many constituents in Labor electorates – who are paying the price for the poor economic decisions of this government.

I wholeheartedly stand with the member for Kew, the Shadow Minister for Early Childhood and Education, in fighting for families, in fighting for educational choice in this state and in fighting for a fair go for those families who want to choose to send their kids to an independent or a Catholic school. It is a dark day in Victoria when we tax education in the way that this Labor government has. It is a stain on this government and a stain on the state of affairs in Victoria.

Dylan WIGHT (Tarneit) (10:03): It pains me to stand up this morning and speak against this motion from those opposite. Quite frankly, this motion this morning from those opposite is nothing more than embarrassing. The audacity of the member for Kew to come in here and to speak on this motion and the audacity of the member for Brighton with his particular brand of bleeding heart politics to come into this chamber and to say that this government, the Allan Labor government, is profiting off children is nothing short of absolutely obscene. Let us get the facts straight. Ninety per cent of non-government, independent schools are not affected by this whatsoever. The audacity of them to come in here and speak on education. Those opposite have closed more schools than they have opened. We can track it all the way back to the Kennett years. Ninety per cent of non-government schools in this state are not affected by this, and I can tell you right now that not one school in Tarneit, not one school in my electorate, is affected by this policy. How many schools in Kew are affected? We are talking about schools that spend more to build one building than we spend to build two government schools ‍– schools that spend more on one building than we spend on building two government schools – and that is our priority. I can say right now in the electorate of Tarneit, where I have been for only 18 ‍months through the campaign and through my time here, we have opened five new schools in Tarneit – five brand new schools.

We have made Victoria the Education State. Education has been our priority ever since we got elected. To come in here and say that this government is waging class warfare by making some of the highest fee schools in this state pay their fair share is absolutely obscene. It is nothing more than coming in here and giving a little nod to your own electorate, because for those on this side of the chamber like me, there is not one school in my electorate that is affected by this, and I have some of the most fantastic low-fee non-government schools that you could ever come across, whether that be the Islamic College of Melbourne, which gives Muslim families in Tarneit and the west the opportunity to go and get educated in line with their faith and is an absolutely amazing school – it is not affected, and it will not be – or St John the Apostle, which allows Catholic families in Tarneit and Hoppers Crossing in the west to go and get educated in line with their faith and is not affected and will not be affected.

This is nothing more than alarmist. Like I said, the member for Brighton and his particular brand of bleeding heart politics is nothing more than alarmist, but we should not be surprised, because it is day in and day out. Let us get the facts straight: 90 per cent of schools are not affected – certainly no school in my electorate. Eighty per cent of funding for these schools is the primary responsibility of the federal government.

We understand that choice is important. We get that, and we support choice. If you are a family that would like to send your children to a high-fee non-government school, that is absolutely your choice, but choice does not mean that you get an infinite exemption to a tax that government schools pay and that every other business in Victoria pays whilst you sit there and run surpluses on your budget and whilst you sit there and do capital works that cost more than an entire government school. You do not get an infinite exemption from that because we support choice. This motion is absolutely absurd. The audacity of the Liberal Party to come in here and lecture us on education is absolutely ridiculous, and it will always continue to be.

Assembly divided on motion:

Ayes (25): Brad Battin, Jade Benham, Roma Britnell, Tim Bull, Martin Cameron, Chris Crewther, Wayne Farnham, Sam Groth, Emma Kealy, Tim McCurdy, Cindy McLeish, James Newbury, Danny O’Brien, Michael O’Brien, Kim O’Keeffe, John Pesutto, Richard Riordan, Brad Rowswell, David Southwick, Bill Tilley, Bridget Vallence, Peter Walsh, Kim Wells, Nicole Werner, Jess Wilson

Noes (52): Juliana Addison, Colin Brooks, Josh Bull, Anthony Carbines, Ben Carroll, Anthony Cianflone, Sarah Connolly, Chris Couzens, Jordan Crugnale, Lily D’Ambrosio, Daniela De Martino, Steve Dimopoulos, Paul Edbrooke, Eden Foster, Matt Fregon, Ella George, Luba Grigorovitch, Bronwyn Halfpenny, Paul Hamer, Martha Haylett, Sam Hibbins, Mathew Hilakari, Melissa Horne, Natalie Hutchins, Lauren Kathage, Gary Maas, Alison Marchant, Kathleen Matthews-Ward, Steve McGhie, Paul Mercurio, John Mullahy, Tim Pallas, Danny Pearson, Tim Read, Pauline Richards, Tim Richardson, Ellen Sandell, Michaela Settle, Ros Spence, Nick Staikos, Natalie Suleyman, Meng Heang Tak, Jackson Taylor, Nina Taylor, Kat Theophanous, Mary-Anne Thomas, Emma Vulin, Iwan Walters, Vicki Ward, Dylan Wight, Gabrielle Williams, Belinda Wilson

Motion defeated.