Tax groups lobby Rudd to reverse self-education expenses cap

The push to reverse a government cap on self-education expenses has been given new life now Kevin Rudd has become the Prime Minister, with opponents pushing for relief.

Tax groups including the Tax Institute and CPA Australia have now called for Rudd to reverse the move, which limits the amount an individual can claim for self-education expenses on their tax returns.

There has historically been no limit on deductions for self-education expenses. Under the proposed law the limit is just $2000, which critics say is barely enough to cover any type of professional course or training.

The cap, to start from July 2014, is predicted to save $514.3 million over the next four years.

Robert Jeremenko, senior tax counsel at the Tax Institute, told SmartCompany this morning Kevin Rudd has a “unique opportunity” to reverse policy decisions.

“We’re just reiterating the deeply held concerns of people who are interacting with this tax system,” he says, adding the tone among businesses regarding the self-education change has been one of “exasperation”.

Both the Tax Institute and the Law Council of Australia have written to Kevin Rudd urging him to rethink the move, while CPA Australia has also brought up the possibility of reversing the cap decision.

SmartCompany contacted the Treasury this morning regarding the renewed push, with a spokesperson for Education Minister Bill Shorten dubbing the change “sensible”.

“The Government has made sensible changes to the allowable deductions for self-education that reflect an appropriate level of claimable expenses.

“The Government released a discussion paper outlining the Government’s proposed approach to introducing a cap, and works through a range of related issues, such as the effect of the cap on the depreciation of capital assets relating to education, the current $250 no-claim threshold, and personal services income.”

The spokesperson also said businesses can make submissions to the discussion paper process.

Business groups, including the Law Council, have pointed out the cap will stop businesses sending employees to training courses – ultimately dulling any type of competitive edge.

Paul Drum, the head of policy at the CPA Australia, says it’s likely the announcement may even be “fine-tuned”.

While the likelihood of reversing the change with a new Prime Minister seems slim, Jeremenko argues the organisation is viewing the leadership change “as an opportunity”.

“More broadly, we’ve written to Treasurer Chris Bowen to make sure the business and tax system are not forgotten in terms of progressive tax reform.

“The departments which service the ministers don’t change, and that’s where the discussion is. But change is always an opportunity, so we’re seeing this as a positive.”


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