Business groups campaign against cap on self-education tax deductions

By Naomi Woodley

ABC News 8th July 2013

The Government is facing a revolt from scores of professional bodies over moves to clamp down on tax breaks for education expenses.

The budget measure will put a $2,000 cap on self-education claims from next July, and is due to save $500 million once it is in place.

But a diverse range of professional groups say the changes will mean many employees cannot afford to meet strict training requirements, and that in turn will damage productivity.

They are meeting in Canberra today to try to convince new Treasurer Chris Bowen to make some changes.

Lee Thomas from the Australian Nursing Federation will be among those at the meeting.

“I think the current position of $2,000 a year is a disgrace,” she said.

“Nurses and midwives, like many other professions, are required to complete, every year, mandatory continuous professional development. None of that comes cheaply.”

Ms Thomas says the cost of training for a regional nurse or midwife can be up to $10,000, and patients will suffer if they cannot claim a deduction.

Engineers, teachers, doctors also affected

The impact on professional development also worries Brent Jackson from Engineers Australia.

“For engineers, it’s 150 hours over every three-year period,” he said.

“A lot of this of course the government has said is funded by employers.

“However, we are seeing increasingly in the current economic environment that employers are less and less likely to fund this.”

The meeting’s host, Belinda Robinson from Universities Australia, says the proposed cap is counter-productive.

“We want to encourage higher quality teachers; we want to ensure that our rural doctors have the breadth of experience that they need to meet the needs of their local communities,” she said.

“We’re encouraging the development of very highly skilled IT professionals, technology professionals, engineers, and so on to meet the demands of what we hope will be a much more advanced and diversified economy in the future.

“And this is a measure that’s really going to make that a lot more difficult.”

Ms Robinson says in 2010/11, 172,000 people claimed more than $2,000 in self-education expenses.

She says an estimated 60 per cent of those were students, usually studying post-graduate degrees.

“Many of the courses charged considerably more than $2,000, and so clearly, this will act as a very significant disincentive to those people,” she said.

Government says consultation process underway

The Government has issued a discussion paper and says it will consult closely to make sure essential training is not affected.

Steve Burrell from the Australian Institute of Company Directors says they all agree the scheme can be better targeted, but the cap goes too far.

“If the Government is concerned that there are people claiming first-class travel or luxury resorts or whatever the problems may be, there are better ways of doing this, much more targeted ways of doing it, than simply denying deductibility for everyone,” he said.

He is hopeful Mr Bowen will take a second look at the changes.

“I think he has indicated – and the Prime Minister has indicated – that they want to talk to business and they want to talk to business about serious things like productivity, and this is one of the issues that is integral to that,” he said.

A spokesman for the Treasurer says the proposed changes are “sensible”‘ and reflect an appropriate level of claimable expenses.

He says the Government is encouraging everyone to make a submission to the discussion paper by the end of this week.

Refer to ABC News online article here.

Information on our PCO petition to the Treasurer here.

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