Wednesday, 21 June 2023

Schools payroll tax

David DAVIS (Southern Metropolitan) (15:03): I am pleased to rise and move:

That this house notes that:

(1) the government announced in the budget that it would remove the longstanding payroll tax exemption, present since the introduction of payroll tax in 1941, for 110 Victorian charitable schools with annual fees of more than $7500, raising $421 million over the next three years;

(2) in the middle of a cost-of-living crisis, this will lead to higher fees for thousands of families at a time when they can least afford it;

(3) with this new tax, the Andrews government wants to punish parents who support their child’s education by reaching into their own pockets to pay for it; and

(4) as well as raising fees, many schools will also have to cut programs and reduce the number of teachers because of this nasty new tax.

There has been a lot said about Labor’s new schools tax, and it is a very unfair tax. It clobbers families who are trying to aspire to the very best outcome for their children. People send their children to non-government schools for a whole range of different reasons. Those reasons are sometimes religious reasons. They are sometimes reasons of curriculum – for example, languages. They are sometimes reasons related to ethnicity. I have mentioned in this house before that Oakleigh Grammar is a case in point. Greek community members send their children to a school like that, like Alphington Grammar and like St John’s. There are Jewish-background schools where people send their children for the same sorts of cultural reasons. There are also those who have specialist needs for their children and seek a particular education style or focus which is not replicated in some cases in the government system.

The importance of this diversity is severalfold. It provides choice and the ability of parents to put their children in the very best location that suits them, but it also provides a valuable step to take pressure off government schools. Think for a moment, just for the exercise, about what would happen if every child left a non-government school this year and next year attended a government school. There would be a huge increase in the number of kids in government schools. About 40 per cent of Victorian kids attend non-government schools at one point or another. This is a huge cohort of children, and they are provided with support and with less input financially from the state government than they would otherwise have if they were in a government school. That is not even taking into account the huge logistic and capital requirements that would be there if kids were to move en masse into the government sector.

But even further than this, I think this reveals several things. One is about the budget. It reveals the terrible state of our budget, with huge debt building up. We know now that by 2025–26 Victoria’s debt will be as big as Queensland, New South Wales and Tasmania combined. We know that the interest-servicing costs are increasing massively, and we know that part of what the government has done with this budget is to massively expand the amount of tax collected. It has not only increased existing taxes but has sought brand new taxes. Since coming to government there have been 49 new taxes introduced. It is a huge number of new taxes. Some are small and some are very large. Some are minorly impactful; others are very major impacts on businesses and community and those who are forced to pay them. So there is the tax side of this too.

But make no mistake, equally, underneath the tax issue and underneath the huge need for revenue of this government, there is also a nasty, vicious, ideological heart that is working through this to change the nature of our society. They want to stomp on parents who send kids to a private school. They want to stomp on kids who are at private schools. This government does not believe in choice, it does not believe in parents having the option and it does not believe in parents being able to make the decision. It believes it knows better. It believes it needs to penalise the decisions of aspirational parents, parents who are seeking to do the very best for their kids. I say, as I said in this chamber the other day, people make a whole range of different choices for their kids, and the reasons for them are very complex and diverse, as they should be, because every kid is different, every family is different and every circumstance is different. But closing down choices and options by putting taxes on schools and making it harder for those struggling parents to send their kids to a school, is not the way to achieve a better education system. It is going to achieve a poorer education system, a less diverse system, a less innovative system and a more staid and rigid system, where the government controls more and more and more.

I believe that is exactly what the government is doing with this tax. It is designed to penalise those parents to send a clear message. We have watched the minister and the Premier struggle to explain this policy and the Premier try to backtrack and send out coded messages that they are not going to tax all the ones that they said in the budget. They did say 110. They referred to the $7500 to $8000 cut-off, and now they are tampering with that. But I say to those parents, I say to those schools, the government might tamper around the edges of this policy this year – they might lift the threshold to $10,000, they might lift it to $12,000, they might even lift it temporarily to $15,000 – but make no mistake: they are coming after you, they are coming after your kids and they are coming after your schools. That is what they are going to do. They are going to widen the net in such a way that they can bring in more and more revenue and penalise more and more aspirational families and aspirational kids in this way. One way they might do it is to set a threshold of let us just say $10,000, for the sake of the exercise, and then just hold that threshold fixed over a number of years as they bring in more and more schools. This is a very nasty step, and I think it is worth again just stepping back in this chamber to understand the history of payroll tax in this country.

Until 1941 there was no payroll tax. It was a wartime tax put on by the federal government. And that bill, and I have read the bill closely, made it clear that benevolent organisations and not for profits would not be taxed, would not have to pay payroll tax. The 1966 federal act made it clear that schools specifically were exempted, including all not for profits and so forth, from payroll tax. When the deal was struck with the federal government and the state governments in 1971 to give payroll tax to the states, in this Parliament in the lower house the then Premier and Treasurer Henry Bolte introduced the bill.

Nicholas McGowan: Good man.

David DAVIS: He was a very good man, and he made a very clear point in that bill of protecting not for profits and protecting schools from payroll tax. He made this point explicit in the second-reading speech and in the bill. It is quite explicit. That is when payroll tax comes to the state, and until this year’s budget private schools and not-for-profit schools have all been exempt from payroll tax. This is 80 years – it is a long time – and this government is overturning that settled, bipartisan policy that we would not put payroll tax on non-government schools.

Again you have got to ask why they are doing it. There are two reasons: the desperate need for cash is certainly one of them, and the other is this deep, nasty, pernicious ideology that hates private schools. They simply hate private schools. They hate the aspiration and they hate the striving that is behind the decisions of so many parents to send their kids to a private school. That is what is going on, and I think it is a really very nasty thing. I think the community needs to call it out, and we need to make it very clear that we are opposed to this. We have indicated that if we are elected in 2026, we will repeal it. The bill went through on Tuesday night. The message has presumably gone to the lower house and the bill will be signed into law in coming days.

There is another aspect of this legislation. There are the very unusual, draconian powers given to the Minister for Education, in conjunction with the Treasurer, where they can designate which schools are in and which schools are out. This again is a mechanism to establish a list. On one hand there is a list of favouritism where they say, ‘You’re okay. We’re going to let you off for the moment – just for the moment.’ And then there is another list, which is the hit list. That is the list where people are going to be clobbered, families are going to be clobbered and schools are going to be clobbered.

If I was on the board, for example, of a non-government school, I would be suggesting to each of those schools that at the bottom of their fee schedules, as they hand them over to parents, the fee invoices, they attach a line item that actually lists and quantifies the government tax that is put on their school so that every parent knows exactly how much tax they are paying for the privilege of sending their child to that school. I think this would make it very clear to people that this is very unfair. They have already paid their taxes over here. Sure, there is some federal money that comes back to private schools and there is a small amount of state money that comes to private schools. They have paid their taxes, but they are already paying tax which helps and properly funds government schools – quite properly. But then over here, where they are paying their fees, they are going to be clobbered, in some cases, we now know, more than $1000 a year to pay for the privilege of sending their kids to that school.

It is a double taxation that is being applied here. You are paying once in your tax, quite properly, to support all schools – and government schools especially, where, let us be clear, parents pay. When my kids were at a local primary school, we did not pay for the fees. We paid a voluntary contribution – fair enough – but essentially the education was free. That goes back to the education acts of the 1870s, and that is a good thing. But to clobber those families, on the other hand, who have made a perfectly legitimate decision, for whatever reason, be it cultural or language education – it could be a music program; it might be a sport program, whatever it is – they have made a decision to send their kid to a non-government, not-for-profit, benevolent school, and they get hit with a tax. This is a very nasty thing that is going on here. I think that people across the community, particularly those parents who are going to end up paying this, need to be prepared to stand up and have a pretty big political fight about this. I think that Labor MPs need to go and confront their non-government schools. They need to talk to them, and they need to understand what is going on. Any non-government school that is below the initial threshold – whatever that may be in the end, once the government gets its act together, because it did not consult on any of this; we know that. Whatever it is, if your school is below the threshold, what we need –

Nicholas McGowan: What threshold?

David DAVIS: Well, I am just saying whatever the threshold is – whatever it is – you need to understand that you are likely going to see your school brought into the net in just a few years. You are going to be caught. They are going to widen this net. We know the line that they initially wanted to go to – $7500 – and nobody believes that that is the end of it. We know that there is huge pressure financially on this government, but we also know it is one of the most ideological governments in the state’s history. They are going to continue this process of hammering non-government schools – hammering them – and I think we should be prepared to fight and stand up on it.

John BERGER (Southern Metropolitan) (15:19): Today I rise to speak on my colleague on the other side Mr Davis’s motion 105. This motion reads:

(1) the government announced in the budget that it would remove the longstanding payroll tax exemption, present since the introduction of payroll tax in 1941, for 110 Victorian charitable schools with annual fees of more than $7500, raising $421 million over the next three years;

(2) in the middle of a cost-of-living crisis, this will lead to higher fees for thousands of families at a time when they can least afford it;

(3) with this new tax, the Andrews government wants to punish parents who support their child’s education by reaching into their own pockets to pay for it; and

(4) as well as raising fees, many schools will also have to cut programs and reduce the number of teachers because of this nasty new tax.

It is important to note that Parliament has already debated the payroll tax, and in fact this chamber did it yesterday. I remember a very late evening sitting to get the day’s events done. Some say removing this exemption will unfairly affect a large proportion of our schools, but the reality is starker. The removal will impact a small number of high-fee non-government schools. It ensures that the payroll tax exemptions are only provided to low-fee non-government schools.

I am keenly listening to my community’s views on this bill. The Minister for Education, with the consent of the Treasurer, will make the determination of which non-government schools will remain exempt from the payroll tax, and it will be done by considering each school’s level of fees and charges, parents’ contributions and any other appropriate factors. How is it fair that government schools have for so long been required to pay payroll tax but non-government schools have not? These changes will ensure that high-fee non-government schools contribute their fair share, and I note that the Minister for Education in the other place Minister Hutchins and her department are working with the peak bodies to finalise and implement these changes accordingly. The Andrews Labor government will always use Victorian taxpayers money responsibly, and that includes the funding allocation given to our schools. However, the Andrews Labor government prides itself on the fact that we will act when we recognise there is a need to go back to the drawing board.

Despite the way this motion is framed, the removal of the tax exemption is not yet in effect and will not be in effect for roughly a year. The bill is not law yet. We have one of the best aspects of our democracy on display right now: constructive debate, a discussion that will lead to the best possible outcomes for stakeholders. This payroll tax is being introduced to improve the lives of all Victorians, which will ultimately mean the improvement of every single student’s and their parents’ lives. Good government must look to the whole picture. The removal of the payroll tax exemption on high school fees will ultimately improve all education in this state. It is not in the interests of the Victorian people to have COVID debt drag on; action needs to be taken now.

Some act like support for schools is a one-way street. It makes very little sense. The evidence shows that the Andrews Labor government supports non-government schools in a range of ways. We are committed to funding 20 per cent of the schooling resource standard for non-government schools under the National School Reform Agreement, and there are a range of measures in the 2023–24 budget that will support non-government schools. On top of what I said yesterday, it includes $450 million for the Non-Government Schools Capital Fund. Funding is provided in construction, expansion and renovation of low-fee Catholic and independent schools of Victoria. This follows $402 million in 2018–19 for the Victorian government’s Non-Government Schools Capital Fund 2019–20 to 2022–‍23; $120 million in 2015–16 for the Victorian government capital funding program for non-government schools from 2015–16 to 2018–19; and funding for specific programs, including $168 million for the Camps, Sports and Excursions Fund. This program provides support for non-government schools and their students. It helps to cover the cost of camps, sporting activities and excursions to ensure family circumstances are not a barrier to participation. This year’s budget increases the amount of funding per year by $25. In addition, the low-fee non-government schools will also benefit from $17 million for access to the Smile Squad free dental program, commencing in 2026.

To look at the tutor learning initiative, an independent evaluation found that 88 per cent of primary school principals and 75 per cent of secondary school principals surveyed said something important, and that is that our programs are improving student achievements. It is noticeable and it is real. That is why it has been extended to the end of this year. In fact more than 88,000 students in low-fee non-government schools received this targeted small group support in 2021 and 2022, and it is continuing into this year. That benefits more than 600 low-fee non-government schools. In fact we have assisted schools with 257 projects, 180 of those in the Catholic sector and 77 in the independent sector, and we will not be stopping any time soon.

Take a school in my own community, the electorate of Southern Metropolitan. In fact this is Mr Davis’s community. We have seen students from Galilee Regional Catholic Primary School in South Melbourne benefit from a massive upgrade. Students and staff of this school community have received $5 million so they can have access to a new multipurpose hall and performing arts facility, and that is on top of the refurbished general learning area, administrative facilities and outdoor spaces.

Our government’s funding commitments are divided across four project categories. The first category is building new campuses in areas of Victoria experiencing significant enrolment demand. The second is expanding the capacity of existing schools in areas of Victoria experiencing significant enrolment demand. The third category is upgrading facilities in existing schools according to their need, including the replacement of existing relocatable classrooms; and the fourth is a planned removal of asbestos and other cladding.

In 2018 the Andrews Labor government committed $402 million over four years to upgrade and build new Catholic and independent schools across the state, and a further $450 million was allocated in this year’s budget to continue to provide funds to non-government schools. We are working with both the government and non-government school sectors. That means Catholic Capital Grants (Victoria) Ltd and the Victorian Independent Schools Block Grant Authority manage the program for schools in their respective sectors.

Before I finish today I want to talk about service. The Andrews Labor government is supporting our low-fee non-government primary schools by funding the mental health in primary schools program. The program funds schools to employ a mental health and wellbeing leader. Any parent in this place with kids in school will know how important that is. In the modern era our young people face unique changes and challenges, and they are different to those in my day. That is why the support provided to individual schools will help teachers better identify and support at-risk students and build relationships with and referral pathways to local mental health services.

Finally, we have invested more than $126.4 million to establish the Victorian Academy of Teaching and Leadership because we need the best teachers no matter what school your child goes to. The teaching excellence program is an Aussie first. Participants are from all three school sectors. Government, Catholic and independent schools are undertaking this advanced flagship learning program for highly skilled teachers. In just two years the academy has trained 238 teacher participants, with 92 per cent of the participants having identified that the professional learning and development had a positive impact on their lives and their professional practices.

Evan MULHOLLAND (Northern Metropolitan) (15:28): I am delighted to speak on this motion and once again to defend independent schools in my electorate from the cruel intentions of this Andrews Labor government. As a proud representative of the northern suburbs, my electorate is home to probably the most diverse communities in Victoria. One unique characteristic is that diverse communities are all aspirational communities. Migrants come from all across the world and settle in the northern suburbs as their new home, with high hopes and big dreams, all of which fit into a suitcase.

This kind of story is familiar to me. My nonna and nonno settled in the northern suburbs in the 1950s. They arrived in Australia by boat with nothing but a suitcase, and they started a life for themselves. They worked really hard. I know my nonno worked six- or seven-day weeks as a metalworker, all to provide for his family and all to make the choice to use the vehicle of education to provide for his family so that his children could have what he could not, so that his children could read English, so that his children could get ahead. That is the case for so many migrant families around Victoria, particularly in my electorate. That is why to me this Labor schools tax has to be one of the most cynical policies I have ever seen from this Andrews government. I am proud to be part of a team that has guaranteed that we will scrap this tax.

I just wanted to point out something that my colleague Mr Berger said in his contribution when pointing out all the initiatives that the government had for independent schools – clearly given over by the Premier’s private office – what they were doing for independent schools and all the grant programs and things like that. They are basically just washing money through non-government schools. You have got a case where the government is saying, ‘Oh, we’re giving you this and we’re giving you that and you should be thankful for that. We’ll take a million and we’ll give you 20,000, and you should thank us for the privilege.’ That is what they are doing with the hard-earned taxpayers money that they receive, washing it through independent schools and asking them to be thankful for it. That is not the kind of attitude we should have from this government. The government should be thanking, actually, independent schools for the job they do and for the relief they give in terms of easing pressure on the school system.

I think Labor loathes independent schools. They do not want parents to decide for themselves where their children are taught. They do not want parents to choose schools that align with their values. They talk down independent schools. I have not heard a single positive word about independent schools from Labor, but the people out in the real world speak differently. Just look at Aitken College in Greenvale and Hume Anglican Grammar in Mickleham, in the growing northern suburbs. Enrolments in these independent schools are booming, and much of it is actually due to Labor’s failure to deliver for public schools in the growing northern suburbs. They are happy to approve new precinct structure plan after new precinct structure plan and get all the stamp duty revenue that comes with that, but they are not actually investing in public schools. Let us look at Craigieburn’s public school Mount Ridley College. It is overflowing. It has 2750 students, so they can thank Hume Anglican Grammar for relieving some of that pressure.

Let us look at Greenvale. Greenvale does not even have a public school that goes all the way to year 12, because of the decades of underinvestment in this area by the Labor government, so Aitken College, who they are planning on taxing, is actually the only school in the area parents can send their kids to. We see the principal of Aitken College Josie Crisara – she has described it as bizarre, this tax, and urged MPs not to support it because there has been no consultation on this. She has tried to express that to the local member, I believe, and it is quite clear – and I have spoken to many parents at Aitken College, one of them a sponsor of a petition that is online on the parliamentary website – that the Labor member for Greenvale has failed in his first hurdle to advocate for his community, who have been shafted by this government. He has failed at his first hurdle, his first test, for the local community. You would think after receiving the biggest swing against the government in the state you would want to listen to local communities, you would want to listen to parents, you would want to listen to families who send their kids to independent schools and then go into bat for them in the Parliament. I tell you what: I will go into bat for them in the Parliament every single day I am here, even if the member for Greenvale will not, because they are being shafted by this Labor government and do not have a member of the government, supposedly of the community, to stand up for them. That is quite disappointing.

Labor have initially said 110 schools will be impacted, but you never know – they have got history. They have got 49 new or increased taxes and they have a history of dropping thresholds, like they have done with land tax, just raising the volume a bit on different taxes. We can see their history on this. They have got form. They have got form on that side of the house. They will pass a tax –

Members interjecting.

Evan MULHOLLAND: I mean, he is a new resident in Greenvale. We have seen, even in the Public Accounts and Estimates Committee (PAEC) –

Members interjecting.

Evan MULHOLLAND: They cannot be proud of the Minister for Education. She said, ‘It’s not my job to give advice on Labor’s schools tax,’ despite the Treasurer explicitly telling PAEC, the very same committee, ‘That’s a matter for the Minister for Education.’ I agree with Dr Bach: she will not be education minister for long. This government has a history of winding people that are not quite up to scratch around portfolios, and I make a prediction that we might see the same thing here. She also failed to name a single school that she had consulted with. She said she had spoken to schools and when asked ‘Which schools?’ – who – she said that she attended a dinner. As my learned colleague Dr Bach has revealed to this chamber, they seemed to more barrel her up rather than her seeking them out to speak to them about the impacts of this wicked tax.

I heard some comments yesterday I just want to get to. Mr Batchelor was speaking on this yesterday. He justified it by saying that they have got to make these savings somewhere to bring in our COVID debt. He asked what we would cut. He said that if they do not do this, we will cut something. I said this in the last sitting week as well, when I detailed some of the programs that perhaps the government could look at. It was quite prophetic actually because I said that they ought to look at the fishing rod program, which has been in the news lately. That is an area they could certainly look at.

Nicholas McGowan: How much?

Evan MULHOLLAND: A lot. Also, I said they could look at the $3000 subsidy for electric vehicles. I do not know if you fellows have been out to Greenvale or Broadmeadows, but not many people in the northern suburbs can afford a $70,000 electric vehicle. I think that kind of subsidy is probably aimed more at the people of Ashwood than the people of Broadmeadows. The government has in fact now scrapped that subsidy, so perhaps someone was listening. Perhaps they took my suggestion on where to cut. There are other areas they could cut. I do not know why we need to be appointing a director of diversity and inclusion at the Suburban Rail Loop for over $270,000 a year.

Nicholas McGowan: $1.5 million on fishing rods. There we go.

Evan MULHOLLAND: On fishing rods – exactly. These are all the things that the government could look at. Perhaps they could look at their $30 billion in cost overruns. What a record for the future Premier – $30 billion in cost overruns on infrastructure projects. This is a wicked tax. This is an attack on choice and this is an attack on families. We will repeal it in government.

Michael GALEA (South-Eastern Metropolitan) (15:38): I rise to speak on this motion moved today by Mr Davis, after that rather bombastic, entertaining contribution from Comrade Mulholland. I always appreciate hearing from you, especially about fantastic local members like the member for Greenvale and the member for Kalkallo too, who are working hard day in, day out for their communities.

A member: He’s a very good man.

Michael GALEA: He is a passionate advocate for his community, and he is out there every week doorknocking his community, which is more than can be said for some on your side.

I do rise to speak on this motion moved today by Mr Davis, and I am unsurprised by the lack of context. Really, the way it is written – goodness me. There is an apparent conflation, an exaggeration, implicit in the motion’s wording. I am unsurprised because I fully expected such language from a coalition motion on this issue.

Nicholas McGowan interjected.

Michael GALEA: I appreciate the offer to read the motion, Mr McGowan. I think I will be able to get through the rest of my 9 minutes without going through the whole motion, but if I am struggling, you will see me pick it up.

Changes to payroll tax exemptions for schools do have a real impact, and it is essential that any measures are considered carefully and are carefully applied. The politicking from members opposite is misleading, it is disingenuous and it shows contempt for the public. This fearmongering causes real distress, especially amongst parents, many of whom are being told about price increases that will not even occur at their schools.

Members interjecting.

Michael GALEA: At their children’s schools. I have already appreciated those school principals who have reached out to us, and I have enjoyed productive conversations with them. I look forward to meeting a few more. I am looking forward to meeting the principal of Beaconhills College, which has a campus in Berwick and also in Pakenham. Along with my colleague, another outstanding outer suburban local member, the member for Pakenham Emma Vulin, I am looking forward to meeting with them. I understand and we are hoping that in the case of that particular school it does appear that they will not actually be affected by this anyway, but we will be working through that with them. It is something that we will be working through for all our schools. If there is –

Nicholas McGowan: I’ll give you the list for my electorate.

Michael GALEA: If they are not subject to the threshold, they are not going to be covered by it. It is quite as simple as that, Mr McGowan. This is not a special exemption that I am putting into place, this is just a statement of fact.

Members interjecting.

Michael GALEA: It is not a special exemption; it is absolutely not.

The ACTING PRESIDENT (Sonja Terpstra): Order! Order on my left, please. Mr Galea to continue without assistance.

Michael GALEA: Thank you, Acting President, grateful as I am for the assistance. As I said, all schools, whether they are affected or not, or whether they think they will be affected – my Labor colleagues and I will be working with them in our constituencies to ensure, whether they are affected by this or not, that they are fully supported. I look forward to continuing those discussions.

The other framing of this motion is that we are pulling the rug out and that there is no support. There have been some outrageous things said today. This budget included a number of measures for private schools. I can list you one in my electorate too, in one of the non-Labor held electorates, which is Rowville. We have had a $2 million commitment to a Catholic primary school. They are a low-fee Catholic school, I should say, too. They will not be affected by this either, as others have been suggesting. We have been proud to go out and announce that. In spite of the fact that the member for Rowville then declared on his social media that we have given nothing for Rowville schools, we actually have. We have not only funded that, we have also funded an upgrade to Carrington Primary School – planning works for their renewal – which will be in the order of $13 million. I think it is important to keep the facts in the discussion.

In the outer suburbs there is a number of things going on in the outer north, but I am not the member for Northern Metropolitan. I will talk about the South-Eastern Metropolitan Region, where not only do we have two new primary schools being built at the moment this year, which will be opening to students for the start of term next year, Alexander Boulevard primary in Clyde North and Brunt Road primary in Officer, we also have three new schools announced in the budget – two new primary schools for Clyde North as well as a secondary school for Clyde North too. The assertion that we are not investing in public schools is frankly ridiculous, and the assertion that we are also not investing in private schools is ridiculous too.

I had delight in visiting yet another fantastic outer suburban Labor MP, the member for Bass Jordan Crugnale. We visited Clyde Grammar school, which received a considerable amount of funding for its primary school campus, and we got to see the benefit of that state funding and how those students are benefiting from that as well. So this notion that we are underinvesting in public and private schools and whatever is complete rubbish. I am sure my colleagues who cover the north will have plenty of examples themselves of schools that have been funded too, as will colleagues in the east, in the west and of course in the regions as well – right across this state. It does not matter where you are, whether you are in one electorate or another, this is a Labor government that is investing in our children’s future.

I should just mention as well – I did mention Beaconhills before – that I would like to give a particular shout-out to the year 12 legal studies class, who, members may have noticed, were observing us from the gallery yesterday in question time along with other MPs from both sides of the house and both sides from the other house too. It was great to have them in to have a look. We had a Q and A with them beforehand; they had some really good questions.

Nicholas McGowan interjected.

Michael GALEA: We then had a Q and A after – you might be interested to know this, Mr McGowan – and they had even more questions. We spent about half an hour on all the questions just from our question time. They said it was more enjoyable than I thought they would say – they said it was very enjoyable. They said it was very fiery as well, so I am sure they had an even better time in the Assembly in the afternoon. They also asked many questions about procedure: why do we bow, why do we do this, what are the time limits – really, really good questions. They also asked why members below them were on Instagram. I do know who was on that, but –

Matthew Bach: I am updating mine now.

Michael GALEA: Perfect. Maybe it was you, Dr Bach. But they were a really perceptive group of students, and it was really great to meet with them yesterday. There are a number of measures in –

Renee Heath: On a point of order, Acting President, on relevance, I think he needs to come back to the topic.

The ACTING PRESIDENT (Sonja Terpstra): Thank you for raising that point of order. I have been listening intently to the debate, and this debate has been a very wideranging debate on both sides of the aisle today. I have said this before, and I will say it again: if members on this side of the chamber want to open the door to extraneous matters, then those on the government benches are entitled to respond in kind. Mr Galea to continue without assistance.

Michael GALEA: I am sure to Dr Heath’s delight, I was actually just about to return to the subject of this budget and the COVID debt repayment plan in particular.

These measures in the 2023–24 state budget, which do include the payroll tax changes as part of the budget’s broader tax reform measures, cannot be viewed in isolation. I think we need to remember that 2020 was an unprecedented year, with a devastating bushfire season leading into the beginning of a one-in-100-year pandemic. In Australia economic activity fell across the board, as it did across the globe. International students – one of our largest export industries – tourists and migrants arriving in Australia effectively ceased almost overnight as borders closed. About 240,000 Victorians lost their jobs between March and September of that year. There was a massive demand on our hospitals and healthcare professionals as we grappled with the pandemic. The record levels of government support were crucial in preventing the impact of the COVID-19 pandemic from becoming far worse – far worse for our health outcomes, far worse for livelihoods, but also far worse for our economy.

This could have been significantly worse than it was had it not been for interventions at all levels of government. State, federal, Labor and Liberal governments banded together. We can have many disagreements over what the appropriate courses of action were in whatever particular scenario, but governments got together and worked together to do their absolute best. That included the Victorian government, who fought day in, day out for Victorians. People may not agree with every decision that was taken – that is perfectly understandable; we live in a democracy and people have that right, absolutely – but this is a government that fought for Victorians during that time and spent what it had to spend to keep Victorians out of the ICU and in jobs.

We do have this COVID debt; it is approximately $30 billion. This payroll tax measure is one component of paying that down. And I do ask those opposite: what is the alternative to paying this down? We could speculate hypothetically about what you might have done differently – and I certainly hope it would not have been a hands-off, laissez faire, Institute of Public Affairs approach to the pandemic – but one thing I am sure that we can agree on –

A member: He’s gone.

Michael GALEA: He has gone. It’s a shame – my friend over there has gone. This is an important aspect of our COVID debt repayment plan, and for those reasons I do not support this motion.

Melina BATH (Eastern Victoria) (15:48): I am very pleased this afternoon to put my name in favour of Mr Davis’s motion 105 on the notice paper lambasting the Andrews government for an unnecessary tax on top of another unnecessary tax, on top of the 48th tax that we have seen since Daniel Andrews came to government, who previously stared down the barrel on the eve of the 2014 election saying, ‘No more new taxes do I promise’ – in the Premier’s words. Now, the Premier’s words decided to fall out of his mouth yesterday in a very uncultured and derogatory form, and I note that he begrudgingly apologised on the request of the Speaker. I have since checked in with my colleague Ms McLeish, and she is doing very well but is clearly most upset by this.

In terms of the COVID debt, as Mr Galea went to, and even the bushfires – so it has been a wideranging piece of debate so far – Victoria’s state debt at the end of COVID was larger than New South Wales, Queensland and Tasmania all aggregated. As I said yesterday in communicating on this topic, if there was an Olympic medal, unfortunately Victoria and the Andrews government would be gold standard in terms of debt. The government is paying this down, apparently, and they have chosen families who want to send their children to an independent school.

According to Independent Schools Victoria, the strongest growth is in schools serving – and we heard this from Mr Mulholland, referring to his area – aspirational families. Many of them are migrants in those growth suburbs, who sacrifice maybe some of their extras to focus on the wellbeing and the educational outcomes of their children. ACARA, which is the Australian Curriculum, Assessment and Reporting Authority, in 2022 suggested that around 160,000 children attend independent schools – about 15 per cent of all of those students in our state. They meet the needs – those independent schools ‍– of around 21 different affiliations, philosophies and approaches to education, so they are a broad-ranging level of independent schools. About 25 per cent of them are in outer regional and also inner regional areas. If you are looking at that, that seems quite reasonable. We have got 25 per cent of the population in rural and regional Victoria; we have got 25 per cent of the independent schools. About half of them have annual school fees of over $7500 per student. These particular schools apparently, according to the government, are high fee paying schools. Many of them are from my electorate. At least 13 of these schools on that potential 110 hit list are in rural and regional Eastern Victoria Region. It is supposed to raise these funds. It is supposed to raise approximately $400 million over the next three years to pay down some of this COVID ‘government spin’ debt.

One of the things that I find quite appalling is that the government is prepared to put this impost tax – or it ends up being an impost tax – on families, a tax on education, by way of removal of the payroll tax exemption, and nobody wants to own it. My colleague the member for Gippsland South did an amazing job on the Public Accounts and Estimates Committee the other day, as he did in all of the last two weeks. He quizzed the Premier. I was listening to the Premier obfuscate about whose responsibility it was. He was not owning it. He was saying, ‘Well, actually, it’s the Minister for Education.’ Well, define that last list of who is in and who is out. Then we saw the Treasurer on a subsequent day say, ‘No, that’s definitely for the Minister for Education.’ Then we saw towards the end the Minister for Education, Minister Hutchins, go, ‘No, no, it’s not my job to give that advice.’ Well, who is going to be on that hit list? Nobody wants to touch it.

One of the key factors that this government does so beautifully well is consult after the fact. They consult by having a conversation with somebody that may loosely resemble a key stakeholder or may be part of the government infrastructure system or part of the government framework and call that consultation. We have seen that in so many different policy settings, and if you have not heard me mention the native timber industry as being one, you have not been listening to my contributions over the last few years.

What will that mean to schools? At the end of the day those schools will have to forward on those cost imposts to families – families that make choices with school fees as low as $7500. They are going to have to put those cost imposts onto families, and then those families will have to make a decision. One of the schools in my electorate of Eastern Victoria Region is the Gippsland Grammar school. It is a great school offering really high-quality education, and I thank all the staff, principals and students for doing their best on any and every given day. They are concerned, as an independent school, as to the impacts of being hit, but they are also concerned about what the government is doing in terms of the transition and funding model. They are concerned that whereas in the past they looked at socio-economic status as a funding model, it is actually going to be transferred, altered and changed to become a direct measure of income funding model as a methodology to determine how they are going to be funded. So they raised that with me as a concern around another level: will there be funding cuts to these schools if that system is changed?

Finally, we want choice. We often hear the government talk about how it is important to have choice in a whole range of things, from religion to your sexuality to how you identify to where you travel and who you vote for, and we need choice as to whether to go to one of our fantastic state schools. As I have said in the past, I have enjoyed the privilege of teaching in the state school system in a country school with exemplary teachers, but also I chose for various reasons to send my children to a local Catholic school. I chose that not because I am Catholic but because I knew that there was a section there. My youngest, most beautiful child had a learning disability, and I knew that that system was going to meet his needs in a better way. I researched this quite thoroughly. So that was my choice. I wore the cost impost at the time. It is one of those low fee paying schools, but who knows? It could even be on this cut list now. With that I had the choice. I do not want to see good parents in our state have that choice removed through financial burden. As we have said on this side, the Liberals and the Nationals will repeal this tax when we come to government.

Jacinta ERMACORA (Western Victoria) (15:57): I will speak on this motion Mr Davis has brought forward. From the outset I will say that just because something is longstanding does not make it immune to review. A payroll tax exemption that has remained unaltered since 1941 should be open to reconsideration. It is not hard to argue that the socio-economic demographics of school education in this state have changed since 1941. One of the other things that has changed is that Robert Menzies is no longer the Deputy Premier of this state, nor is he the Prime Minister of this country – since 1966. Back in 1966, when Robert Menzies was the PM, there were zero women MPs in the Victorian Legislative Council. There is a big difference in this government here –

Members interjecting.

The ACTING PRESIDENT (John Berger): Order! I have been observing today’s proceedings, and there has been nothing but interjections from my left all afternoon. Ms Ermacora, could you please resume, without interruption.

Jacinta ERMACORA: There were zero women MPs in the Victorian Legislative Council. That is a big difference from this government here in 2023, where we now have more than 50 per cent women in the government and more than 50 per cent women in the cabinet. If we look opposite, it is clear that there has been lots of looking back, because there are still so few women in the Liberal opposition. So whilst history can be instructive, it is often better to look forward, and that is exactly what the Andrews Labor government in its 2023–24 budget does.

The bill includes a suite of measures as part of the COVID debt repayment plan. After careful consideration by the government, it was decided that this was the best avenue without impacting those who are struggling the most. Individuals and businesses that did well under COVID-19 are the ones being asked to contribute to reducing the debt for a temporary period of time. As I said yesterday, the criticism of the COVID debt repayment plan from those opposite really does make us wonder what they would do in the same situation. It is of course very instructive to look back at the Liberals’ record in government. Premier Kennett introduced –

Nicholas McGowan interjected.

Jacinta ERMACORA: Looking back is always useful to learn a lesson, but looking forward is the way to go. Jeff Kennett instituted a $100 levy on every single property in this state despite the significance of their socio-economic status and despite the situation and circumstance that each individual was in, causing extreme hardship for many individuals. The Kennett coalition government tried to close the Warrnambool railway line, did close down several schools in our region, abolished the industrial relations commission, sold off the SEC and consequently caused a –

Matthew Bach: On a point of order, Acting President, I do realise that on all sides of the house this has been a wideranging debate, but when we get to the SEC under Mr Kennett it is hard to see how that bears any resemblance whatsoever to the motion before the house. I would urge you, respectfully, Acting President, to bring the speaker back to the motion.

The ACTING PRESIDENT (John Berger): Could I please bring you back to the topic, Ms Ermacora.

Jacinta ERMACORA: I will move on. Jeff Kennett closed down schools in Victoria –

A member interjected.

Jacinta ERMACORA: I am on the topic of schools – causing 7000 teacher job losses.

Members interjecting.

The ACTING PRESIDENT (John Berger): Order! I cannot hear the speaker. Could you please resume without any interruption.

Jacinta ERMACORA: And not many years later there was a skills shortage in Victoria. This can only be described as decimating the economy of Victoria, not managing the economy of Victoria and this state. During the pandemic Liberals criticised every strategy the government provided. They criticised the health response. They criticised the financial assistance packages. They criticised our investment in vaccination research. The federal Liberal government said ‘It’s not a race’ when of course it absolutely was a rush for vaccinations. Unsurprisingly the coalition has criticised the debt reduction strategy today. Meanwhile Victorians disagreed with the Liberal muck-up strategy and returned Labor for a third term with an increased majority. This motion appears to be yet another opposition scare tactic. They use scare tactics because they are too busy fighting amongst themselves to decide what they stand for. It is opportunistic and, frankly, counterproductive.

I would like to remind the chamber that the government has a track record of supporting not just public education but also education in non-government schools. Victoria has committed to funding 20 per cent of the schooling resource standard for non-government schools under the national school reform agreement. Every non-government school receives government funding under the national school reform agreement. In the 2023–24 budget alone the government announced it will continue to support non-government schools by delivering $450 million to the Non-Government Schools Capital Fund, which provides funding for construction, expansion and renovation of low-fee Catholic and independent schools. It has gone quiet, Acting President.

In addition, low-fee non-government schools will also benefit from $17 million in access to the Smile Squad free dental program, commencing in 2026. I could go on. The tutor learning initiative has been deemed a success in evaluations from 88 per cent of primary school principals and 75 per cent of secondary school principals. More than 600 low-fee non-government schools are receiving this funding this year. In my electorate I had the pleasure of opening the new science lab and learning area at Emmanuel College, a non-government Catholic school that received $2 million in government funding from the Non-Government Schools Capital Fund. This was from more than $520 million the government has invested in non-government schools. I was blown away to see the facilities. They truly are going to inspire a new generation of STEM workers.

Those opposite speak emphatically of how there will be an increase in tuition fees as if it is guaranteed. I keep hearing stories from the coalition that private schools in their electorates may be included in new tax measures, and their first act was to convey the news to parents. Those opposite are addressing this payroll tax expansion as if the government is legislating for parents of children in private schools to pay more fees. They pretend that government has a direct hand in how schools budget. There is absolutely nothing wrong with educating our children in the public school system and in the private school system. In the current society, we operate under this facade that our children will achieve better results if they attend a private school. In 2022 an Australian educational researcher debunked that. Looking at the differences in academic achievement from years 3 to 9, they found that the results demonstrate that private schools are not associated with systematically higher average student achievement in primary or secondary school, nor with steeper trajectories in reading or numeracy.

The real issue in educational success is regional versus metropolitan, and that is the issue that I would argue is important. So maybe rather than criticising the new tax measures by forcing a new cost-of-living pressure, those opposite should encourage non-government schools in their electorates not to pass on the costs to their students. I again mention that this motion has come before us for debate with the bill already having passed yesterday.

Matthew BACH (North-Eastern Metropolitan) (16:07): Yes, it has been brought on for debate after the bill passed yesterday, but if you talk to any independent school – and I talk to independent schools every single day; I talk to staff at Independent Schools Victoria every single day – they will maintain the rage, don’t you worry, Ms Ermacorma, all the way through to the next election, on this schools tax.

I want to start by dealing with several of the statements made by the previous speaker. She talked about the fact that we should not look back. She also talked about the fact that obviously the government won a thumping majority at the last election; it did. Other speakers have said, ‘Look, if you’re going to oppose the schools tax, what will you cut?’ I can understand on that basis that Ms Ermacorma would not want us to look back, because I recall – quite clearly I think – that at the last election the Treasurer said what he says before every election, which is ‘Vote for us and there’ll be no new or increased taxes.’ The people of Victoria voted for this Labor government – well, fair enough – but on the basis that there would be no new or increased taxes, and now we hear that because of COVID debt, which was all accrued before the election, we must take this course of action. The government had a secret plan at the election to smash Victorians with a whole series of taxes – the schools tax, the jobs tax, the rent tax and the debt tax – that it did not tell Victorians about before the election. Worse than that, the government lied to Victorians and said there would be no new or increased taxes, so I can understand why Ms Ermacorma would not want to look back. I was stunned ‍–

Harriet Shing: On a point of order, Acting President, it is ‘Ermacora’.

Matthew BACH: What did I say?

Harriet Shing: Ermacorma.

Matthew BACH: Ermacora. Thank you. We also heard a long list of things, oftentimes meritorious things, that this government has done for independent schools, including the tutor program. That is a fabulous program. It was first proposed by the Liberals and the Nationals, to debunk the myth that nothing positive was put forward through the period of the pandemic. I was the Shadow Minister for Education at the time –

Tom McIntosh: Have you got a policy?

Matthew BACH: We do, Macca, we do. The government took it up, and that is a good thing. The model is wrong – the Grattan Institute has a far better model – but nonetheless what was put forward through the tutor initiative was really good. But the embattled Minister for Education – who will not be the education minister for long, I am advised by my friends in the caucus – has said that it has been cut. We learned this at the Public Accounts and Estimates Committee hearing, where Mr McGowan subjected the minister to questioning. So it is an interesting thing that the member would say that this is something that has been funded through this budget. What we learned in the budget papers is that the best thing this government has ever done for independent schools is actually being cut.

Now, the other laundry list of things, like the Smile Squad, for example, which the member rattled off was rattled off by the education minister at the famous dinner – the fancy dinner at the Park Hyatt. I was there. I am not impugning the minister for going to a fancy dinner at the Park Hyatt; I like a fancy dinner at the Park Hyatt. She went to the Park Hyatt the day after the budget to talk to Independent Schools Victoria. I was invited as well, and I went. I actually sat next to the principal for Aitken College. This idea that if you whack $420 million worth of taxes on independent schools it will not lead to fee increases is so witheringly stupid that it almost needs no rebuttal. But we hear logic like this about taxation so often from people opposite that I fear it does. If the minister had spoken to one single independent school – she has spoken to none – or if she had ever spoken to Independent Schools Victoria, she would know what every single one of them says to me, which is that there is no way that they have the resources to suck up millions and millions of dollars in tax increases without increasing fees. The idea put forward by those opposite that this is somehow a scare or a political tactic is so nakedly stupid. It comes back, obviously, to the fact that the minister has not spoken to one single school.

Mrs McArthur at the Public Accounts and Estimates Committee asked Minister Hutchins, who knows nothing about her portfolio, whether she had spoken to any schools. She said, ‘Yeah, I went to a dinner.’ I went to that dinner. She only spoke to schools because when she was trying to escape, well in advance of the end of the dinner, several school principals went to talk to her. Those same school principals talked to me, and they were crystal clear – like the principal of Oakleigh Grammar, for example, which has fees of about $8000. If you whack Oakleigh Grammar, a high-fee school according to the government, a school that did really well through the period of the pandemic according to the government and a school that should pay its fair share according to the government, that will lead to significantly higher fees for people who cannot afford it, like the good punters of Oakleigh, who are struggling and working hard, oftentimes on two incomes, to send their children to a school of their choice.

So the idea that it is inappropriate now that the bill has passed to continue talking about these matters is not one that I accept and not one, to the best of my knowledge, that any leader at any independent school in the state accepts. And if those opposite want to say that it is wrong to assert that schools with fees of $8000 will be impacted, or schools with fees of $10,000 – give me a nod if you know. Michael, you know. It was fabulous to see Mr Galea talking about an excellent outcome that he has achieved for a school in his electorate. He has already given an exemption to one of the schools in his electorate. I want Mr Galea to come to my electorate and to meet with schools in Warrandyte –

Michael Galea: On a point of order, Acting President, I would just like to note that Dr Bach has misclassified what I have said. I said that I am working with them to try and ensure that they are not affected by this, as I suspect. I did not say that the school is categorically not affected.

The ACTING PRESIDENT (John Berger): On the point of order, that is not a point of order.

Matthew BACH: I did make that last remark tongue in cheek. The point, however, is that schools know nothing. You cannot say in the budget papers that approximately – that is the exact language in the budget papers, ‘approximately’ – 110 schools, high-fee schools with fees as high as $7500, will have their payroll tax exemption removed, meaning that many of these schools will be totally defunded by the state government. The state government will be a net detractor of money from many of our independent schools. And the point made previously by Ms Bath is absolutely right: we know what this government does. We have heard from this government so many times explicit promises never to implement new taxes or increase taxes – never. We have heard that so many times, and yet under this government we have seen taxes increase 49 times now. Schools know what we know on this side of the house, which is that if this payroll tax exemption is removed, no matter at which so-called threshold, all independent schools in due course will have their payroll tax exemption removed, because we know what those opposite think about independent schools. ‘Independent schools did fabulously through the pandemic,’ we have heard just today, ‘They should pay their fair share. The tax arrangements for independent schools are a sweetheart deal.’ The Premier only used that particular line for one day, and it went down so badly that he scrapped it. But that is what he thinks, and that is what those opposite think, that it is a sweetheart deal for non-government, non-profit schools to not have to pay payroll tax.

As I finish I want to bust a couple of myths. Members opposite continue to say that independent schools are for profit. That is simply untrue. Every single non-government school must operate a surplus. That is as a result of a government policy overseen by the Victorian Registration and Qualifications Authority. The government is saying, ‘Because you run surpluses, which you must do if you want to be registered as a school or we’ll shut you down, we’re going to punish you because you are a wealthy independent school with high fees’ if you have fees over $7500. That is not my figure; that is the government’s figure. It says in black and white in the budget papers ‘110 schools.’ It did not take long to do an analysis of Victoria’s independent schools to find out that once you get to 110 schools you are talking about schools with a fee structure of $7500. They will not just be paying $422 million, under this budget alone, in payroll tax; they will be paying the COVID levy and the mental health levy, even though the minister had no idea that there was even one school in the whole state with a payroll over $10 billion – there are 69 independent schools and over 10 Catholic schools. The number of schools in the state, under the government’s own plans, which will be formalised tomorrow when the budget passes, will mean a massive hit, under this budget alone, in the order of $500 million.

The government is not going to vote for this motion, but what the government must do now is finally reason with the almost half of Victorian parents who choose, as is their right, to send their children to an independent school and tell them if their school will be on the hit list, how big the hit list is, where the so-called threshold is and what will be included as we determine the threshold. Will it be fees and donations?

Nicholas McGowan interjected.

Matthew BACH: ‘Will it be indexed?’ asks Mr McGowan, which is critical, because if it is not indexed, and the Attorney-General failed to guarantee that to me yesterday in the committee stage of the State Taxation Acts Amendment Bill 2023, then more and more schools – if I am wrong, then I would invite those opposite to correct me, because under the government’s plan – (Time expired)

Gaelle BROAD (Northern Victoria) (16:17): I am pleased to support this motion put forward by my colleague David Davis regarding the Labor government’s budget announcements to remove the payroll tax exemption on independent schools. Labor’s new payroll tax on independent schools, announced in the state budget, is a tax on families.

The increased cost of this tax on independent schools will flow through to the families who are already struggling with rising living costs. In many families both parents are working and making sacrifices to provide a unique educational experience for their kids. Choice is important. Choice is very important when it comes to education for your children. With the rising cost of living and higher interest rates, parents and families simply cannot afford higher school fees. Independent schools are concerned about the financial impact of the new payroll tax. Many faith-based schools and independent schools operate as not-for-profits and already have very tight budgets. They put every dollar back into school programs, into the teachers and into the facilities to provide the best outcomes for students. They are not sure yet how they will pay for the new tax, if they will need to cut programs and reduce staff or raise fees. I spoke with the principal of a school in Northern Victoria. They have developed a master plan for the next 20 years, but with this announcement they may need to pay $500,000 in payroll tax. They do not know how they are going to pay for it and what they need to cut.

Independent schools have historically been exempt from payroll tax. In 1971 control of the payroll tax was passed to Victoria and the other states, and since then non-government schools and other charities have been exempt, because the government recognised the important contribution of non-government schools and charities to the public good. If independent schools closed, there would be a massive problem, as other schools in our region are already full. We need independent schools as they reduce the pressure on the public education system. But Labor’s style of government is they announce changes without any consultation and they do not provide any details. They just announce changes and expect people to come along for the ride.

Well, it has been several weeks now since this new tax was announced by the government, but independent schools are still in limbo, waiting on details from the government. We want to see this tax on schools scrapped. The Nationals and the Liberals oppose the tax and will repeal it if elected to government in 2026.

Ann-Marie HERMANS (South-Eastern Metropolitan) (16:21): I also rise to speak about the payroll tax in schools. It is a great concern. I know I have spoken about this many times, and I can tell you that in the south-east there are a number of schools that are concerned. They are low fee paying schools, but when it comes to VCE, they will be over that $10,000, because that is what it costs to provide education at the VCE level and the choices that students require. I think it is a real shame that we have a payroll tax, which was never intended for not-for-profit organisations, being implemented on schools. Education should be a choice. Schools in the south-east are crowded. There is a lack of choice if you are going to only stick to the government schools. There are some very good government schools in the south-east. Some of them are select entry, some of them are single sex – there are a limited number of these; in fact one select entry – and there are very few choices for parents if they have particular concerns about their own children. We have a number of primary schools that have been built, but when it comes to secondary, we do not have enough government schools. There are certain people, I can tell you, in the Cranbourne area and Cranbourne West that have been waiting for a secondary school for a very long time.

I have a concern because when I talked to a number of the principals, their concerns were that the fees for their schools in the independent sector are going to be such that parents are going to have to make choices. They will have to make choices about whether they send their son or their daughter to a school and about which one has to go to maybe an overcrowded or unsuitable government school that does not fit with the family’s ideas or concerns or with the needs of their own children.

I am against the payroll tax for schools. It is a tremendous concern, and I do want to have that on record. When it was first brought in, the payroll tax was never meant to be for not-for-profit organisations. The minute we start taxing our not-for-profit organisations we are actually limiting what they can provide to the community. On behalf of a number of the low fee paying independent schools which could be impacted, particularly at the VCE level, in the south-east, and on behalf of those that are high fee paying – some of these are single sex, and I am concerned, for instance, that girls might be taken out of the school if parents have to choose one or the other and are more likely to choose boys, which is going to be a backward step. It is like we are taking society in the wrong direction. If parents have to choose which of their children they educate in the independent sector, then of course I have to advocate for them, of course I have to speak up for them and of course I need to emphasise the importance of what the implications are when we bring in a payroll tax for schools. I just wanted to make this comment and to have this on the record, and I want to thank you for the opportunity.

Nicholas McGOWAN (North-Eastern Metropolitan) (16:24): In my electorate, where there are very many schools, both government and non-government, including faith-based schools, it is very important, I feel, that the government should support both of those systems essentially with both fairness and with a great sense of equity. And historically that has been the case here in Victoria. My learned colleague Mr Davis outlined for the house earlier today the history of payroll tax, both from its wicked beginnings federally until 1971 – from memory, I think that is what he said – when we started to apply it in essence to schools. However, in effect in the state system we gave with one hand and took with the other. Governments – plural – have done that for some time. It could be argued that all governments since that point in history in fact should have just given it with one hand and left it there, because that would have done far greater good for education and for the schools involved at the state level than perhaps taking it and putting it back into consolidated revenue would have, which is what has happened for some decades. This is, however, a new chapter and a decidedly concerning one. In my experience in politics this sort of policy is usually the result of one of two things: it is either a conspiracy or it is a cock-up. Sadly, I think it is a cock-up. And I think –

Harriet Shing: Sorry, could we maybe just rephrase that?

Nicholas McGOWAN: No, I have looked the word up. It is not an offensive word. It is actually historically accurate and probably apt for this occasion, but I appreciate the point of order nonetheless that is coming.

Harriet Shing: On a point of order, Acting President, in the long canon of turns of phrase which are rapidly being revealed as unparliamentary, I would seek some guidance from you as to whether the term that Mr McGowan has used is unparliamentary and offends the standing orders on that basis.

The ACTING PRESIDENT (John Berger): Mr McGowan, could you possibly rephrase that?

Nicholas McGOWAN: I will rephrase that just because it is the afternoon and I feel ‘Why not?’ But I am obliged to point out that the dictionary definition is ‘something done badly or inefficiently’, as in ‘We have made a total’ – and I will not repeat it – ‘stuff-up.’

Matthew Bach: On the point of order, Acting President, my understanding of the etymology of the expression ‘cock-up’ is that it regards a cock’s feathers in an arrow. Now, in the other place yesterday the Premier obviously used the most disgusting, unparliamentary language, and he withdrew only in deference to the Speaker. That is what he said. Here, for us to have to not refer to feathers I think is just a little silly.

The ACTING PRESIDENT (John Berger): Dr Bach, he has already agreed to rephrase it. Mr McGowan, with the time that we have got left, have you finished your submission?

Nicholas McGOWAN: No, I have only just started. This is just the beginning. It is going so well. I will return to the subject matter, because as my honourable and learned friend member Lovell points out, it is a serious issue. And for me in fact to see it first in the budget – $421 million – that is a massive amount in anyone’s language; it is half a billion dollars. So when you are going to impose a new tax ‍– essentially that is what this is, a new tax of half a billion dollars – understandably every Victorian will be very keen to understand what that means and where that comes from. In particular with this tax, we at least know one thing. The expectation is, in terms of the budget, that they will grab out of the non-government school sector $421 million. That is huge – huge by anyone’s standard. It is also significant because they are taking it from a very select number of schools. We know initially that number of schools was in the order of 110 schools. We are now very unclear about that, and I want to go into that somewhat.

Initially, once the budget had passed, a bill briefing was provided. At that bill briefing a number of the Treasurer’s advisers – but only the Treasurer’s advisers – a representative from DTF, the Department of Treasury and Finance, and a representative of the State Revenue Office were all there, happy to provide answers to any questions that we offered, although what was clear very quickly in that bill briefing was that nothing was clear – that in fact this had been cobbled together in such a fashion that they could not answer the most basic questions. To begin with, they could not answer whether in fact this tax would be indexed at all. They could not answer, for example, when schools are assessed as having a fee threshold of $7500, whether that would include things like a $10 deposit just to put your child’s name down. Then if you are successful in having put your name down at a non-government school, and you might have to pay a $2000 deposit, it was not clear whether that was actually included in the $7500 either. As we continued to ask questions like, ‘Would that include a building levy?’, for example, because many non-government schools have building levies, they did not know the answer to that either. Would it include a library levy? Again it was not clear whether that would be included in the threshold at all. In fact what was very clear, as I have already said, was that nothing was clear, at least in terms of the answers we received from the advisers to the minister, the State Revenue Office and the representative that was there from DTF, the Department of Treasury and Finance.

Fast-forward to just a couple of weeks ago, then, and we had the final opportunity at the Public Accounts and Estimates Committee (PAEC) hearing – a joyful experience for those that were there, I am sure – to be able to question the Treasurer directly and again his most senior bureaucrats in the room. While they were keen not to answer the questions, what they actually revealed to everyone is they knew less than the people at the bill briefing a week prior. In fact they were more keen to move on very quickly from this issue entirely, because not only could they not remember simple acronyms when it came to the education sector, which was terribly embarrassing, because they were using this, they tell us, as the basis to distinguish what they thought a so-called elite school was – that is, a school that had fees in the order of $7500 – but they could not even tell us, again, how the indexing arrangements had been arrived at. In fact what they did and what the Treasurer did was go around and around in a circle and, unfortunately, look at each other for answers that ultimately they would say rest with the Minister for Education. This was like an episode of Yes Minister at this point.

The sad reality is Victorians, one and all, who had the audacity, and I say the audacity, to put their hand in their own pocket and pay for their kids’ education now – and we know this because, as Dr Bach said, we took the time to speak to principals and teachers right across the state – as a consequence of this massive tax, this half-billion-dollar tax, are going to have higher fees. There is no other reality. Even if you reduce the amount of schools that you impact by this, even if you get it down to 50, you can imagine the burden on those 50 when they are hit with a half-billion-dollar tax. It is absolutely sinister.

I think what is even more concerning about this whole episode, this whole unsightly stuff-up of an episode, is that it actually pits one lot of Victorian children against the other. It actually unleashes class warfare, which I have had no appetite for in my entire public life and I will continue to have no appetite for. The Premier perpetuates this sort of warfare. He did it at PAEC again when he talked about the greedy private sector when he talked about the delivery of health care. It is the same sector that he relied upon, his government relied upon and we all relied upon to assist us throughout the COVID pandemic, yet he was quite happy to go there, talk the talk and demonise them. This perpetual demonisation of those who actually put their hand in their own pocket and pay for their own kids’ education has to stop one way or the other.

Council divided on motion:

Ayes (14): Matthew Bach, Melina Bath, Jeff Bourman, Gaelle Broad, Georgie Crozier, David Davis, Moira Deeming, Renee Heath, Ann-Marie Hermans, Wendy Lovell, Trung Luu, Joe McCracken, Nicholas McGowan, Rikkie-Lee Tyrrell

Noes (20): Ryan Batchelor, John Berger, Lizzie Blandthorn, Katherine Copsey, Jacinta Ermacora, David Ettershank, Michael Galea, Shaun Leane, Sarah Mansfield, Tom McIntosh, Rachel Payne, Aiv Puglielli, Georgie Purcell, Samantha Ratnam, Harriet Shing, Jaclyn Symes, Lee Tarlamis, Sonja Terpstra, Gayle Tierney, Sheena Watt

Motion negatived.