Work-related self-education tax reform deferred

Plans to defer the proposed $2000 limit on work-related self-education tax deductibles by another year have been heralded by several industry stakeholders as an example of stronger support for the digital economy.

The change was originally due to take effect on 1 July 2014, but deferred on Friday by Commonwealth Treasurer, Chris Bowen, to 1 July 2015 to “allow for further consultation on how best to target excessive claims, while ensuring the impact on university enrolments and genuine continuing professional development is minimised”.

The Australian Computer Society welcomed the decision, saying it will continue to fight against the policy as part of the Scrap the Cap alliance.

“This decision also vindicates our call for increased expenditure on technology education, as outlined in our Federal Election Issues document, which was released earlier this week,” said ACS CEO, Alan Patterson. “This document specifically outlined access to education as a major roadblock in the growth of the digital economy, and we are heartened Treasurer Bowen has announced this step in the right direction.”

Universities Australia (UA) is also happy about the decision, saying that the government is starting to listen to the concerns of universities and industry groups.

“If implemented, the measure would have increased the effective cost of post-graduate fee paying courses by an estimated 30 to 54 per cent, resulting in a decline in post-graduate and professional development programs by an estimated one third,” claimed UA chief executive of peak body, Belinda Robinson.

“It would reduce national productivity by up to $6 billion per annum and reduce tax revenue by up to $1.5 billion per year.

“It would exacerbate skills shortages across the board, take us backwards in realising our ambition to become a knowledge nation built on education, skills and innovation, and scotch any aspiration to increase national productivity to 2 per cent.”

Robinson would also like the Opposition to inform the public about its decision on the work-related self-education limit and whether it intends to go ahead with it or not should it win the Federal Election on 7 September.

In April, Australian Information Industry Association (AIIA) CEO, Suzanne Campbell, said the tax reform was “directly at odds” with the need to address the ICT skills shortage in Australia.

“We don’t want people to have skills which were relevant in the past but are no longer relevant to the market,” she said. “Limiting the amount of expenses that can be claimed ignores how these arrangements can be used as an incentive to drive ICT skills development, particularly where they are critical to our competitiveness and a global digital economy.”

ACS president, Nick Tate, added the limit on work-related self-training would discourage professional development, which could force businesses into having to become more reliant on 457 visas.

Read: The work-related self-education tax would mean that Australian IT workers won’t be able to claim on full the cost of a Microsoft Developer Network (MSDN) subscription.

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