Directors and executives looking to further their professional development may be relieved to hear that the new Coalition government has dumped a proposed $2,000 cap on tax deductions for self-education expenses.
The cap, announced by former Labor Treasurer Wayne Swan in April, put a limit on deductions for training and educational courses, textbooks and other professional development expenses.
Its abandonment last week was widely welcomed.
Universities Australia CEO Belinda Robinson described the move as “a victory for common sense”. “We agree with the government that people should be encouraged, not deterred, from investing in professional development.”
Universities Australia’s analysis and submission to the government showed that the effective increase in the cost of postgraduate education of up to 54 per cent due to the cap would, in turn, lead to a decline in student numbers of up to 30 per cent, at least $2.8 billion a year in lost production and $800 million a year of lost tax revenue caused by the de-skilling of Australia’s workforce.
Company Directors’ general manager of communications and public affairs, Steve Burrell, added: “The cap was a self-defeating shuffling of the spending deck chairs that would have affected our nation's productivity, the quality of our ‘human capital’ and our international competitiveness. By abandoning the cap, the government is encouraging ongoing professional development, which supports a smart workforce and advances Australia’s position in the Asian Century.”
Minister for Education Christopher Pyne observed: “With the vast bulk of claims for self-education expenses coming from those earning less than $80,000, this was a cap on those on the frontline of the health and education sector.
“Removing the cap is great news for thousands of nurses, teachers and others who would have struggled to afford critical education courses and vital self-accreditation.”
Australian Medical Association president Dr Steve Hambleton said the abolition of the cap meant doctors would be able to stay up-to-date and maintain Australia’s position in first-world care.
Similarly, Financial Planning Association CEO Mark Rantall described it as a win for the education of financial planners and the millions of Australians they provide advice to. “Ongoing education and training is crucial to many professions and particularly for financial planners coping with an ever changing legislative environment,” he said.
When announcing the dumping of the cap, Treasurer Joe Hockey noted: “We have been advised that there is no credible evidence of substantial abuse of this deduction. If credible evidence of systematic abuse emerges, then the government will revisit this issue. Moreover, the economic cost of this initiative is substantial. This was recognised by the previous government, which delayed the implementation of its proposal.”
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