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Coalition reprieve on self-education tax break

The Abbott government has abandoned Labor’s plan for a A$2000 cap on the amount people can claim for self-education expenses…

Treasurer Joe Hockey will not go ahead with a cap on self-education expenses. AAP

The Abbott government has abandoned Labor’s plan for a A$2000 cap on the amount people can claim for self-education expenses.

As part of its review of 92 tax and superannuation announcements that have not been legislated, the government said it had been advised that there was no credible evidence this deduction is being substantially abused. But it said that if evidence emerged, it would revisit the matter.

The deduction covers training and educational courses, textbooks and other accreditation expenses.

The cutback was included in the last Labor budget, and announced with the university cuts. But it was then delayed for one year in the pre-election economic statement.

Some 80% of self-education claims for more than A$2000 come from people earning less than A$80,000 annually. The government said the economic cost of the cutback would be substantial – which had been recognised by Labor’s decision to delay the start of the cap.

Universities welcomed the move. Chief Executive of Universities Australia Belinda Robinson said the decision was “a victory for common sense.”

“The Government is to be commended for its swift response in addressing a policy that would have had profound negative consequences across the economy,” she said.

Higher education expert Andrew Dempster said the decision to introduce the cap “always lacked a coherent rationale.”

“It was never really anything more than a crude way of saving the government money [and] it did this by taking money out of the pockets of Australians looking to… improve their employability,” he said.

Treasurer Joe Hockey and assistant treasurer Arthur Sinodinos said the backlog of unlegislated measures has created “operational uncertainty for business and consumers”.

Of the 92 measures, the government will proceed with 18 while another three will be amended. It will not proceed with seven. It is still reviewing and consulting on the other 64, with a disposition not to proceed with them.

As it announced before the election, the government will not proceed with Labor’s A$1.8 billion fringe benefits tax crackdown on company and salary sacrificed cars. This was planned to help pay for Kevin Rudd’s intention to bring forward the start of emissions trading.

It also will not go ahead with the Labor tax on earnings on superannuation assets supporting retirement income streams. This would have taxed super earnings above $100,000 per year in the drawdown phase.

Not proceeding with these and other measures hits the budget bottom line by A$2.4 billion over the forward estimates.

The government will amend three measures, with a A$700 million cost to the budget. These include:

  • Thin capitalisation changes, which relate to tax structures that seek to shift profits through debt loading. The government said the measure Labor had proposed would put unreasonable compliance costs on Australian businesses; instead the government would introduce a targeted anti-avoidance provision after consultations with stakeholders.

  • Tightening of the Offshore banking unit regime. The government will not proceed with the part of this measure that excludes all related party transactions but have a targeted integrity measure to provide certainty for the industry.

The government is going ahead with 18 un-enacted measures that preserve close to $11 billion in revenue. These include the tobacco tax hikes Labor imposed. The Coalition in opposition said it was reluctantly taking over a number of Labor savings because of the needs of the budget bottom line.

The government’s changes will be included in the mid year fiscal outlook, out before Christmas. The aim is to have most of the legislation passed by July 1 next year.

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19 Comments sorted by

  1. James Hill

    Industrial Designer

    A pre-mature government, thus unready to govern, devoid of merit, with power merely gifted by Murdoch bias, stumbles and fumbles its way.
    The anti-government, or non government; voters might be thankful that they are spared to effects of full-blown political idiocy from the "worst government in the nation's history".
    This team needed a third term incubating in opposition till they were ready for government,till they were ready to win government on merit instead of media bias.
    Murdoch makes a poor political midwife, with the inevitable weakness of the resulting premature government making for a Murdoch "regency"?

  2. Mike Hansen


    Abbott and Hockey - taking from a large number of poor and giving to a small number of very rich!

    "The government will proceed with scrapping the Low Income Superannuation Contribution, which pays up to $500 on top of employer contributions made to superannuation for workers earning below $37,000 a year."

    That will effect 3.6 million of Australia's lowest paid workers (earning below $37,000) including 2.1 million women.

    "The Abbott government has elected not to proceed with Labor’s plans to tax superannuation earnings above $100,000."

    This will effect about 16,000 higher-end superannuation earners with balances of around $1 million+.

    1. John Q Citizen, Aussie


      In reply to Andrew Nichols

      Have to say, all those mid level aussies who spout off at the footy, down the pub and make fools of themselves in front of the ravenous media about how abbott was their boy. Think they got it WRONG.

      Sweaty joe got wrong too when he said no tonight no one was going to change his mind, NO ONE. Unless of course your first name is Tony or Rupert then all bets are off and we can start sending joe some more mitchum for those sweats he's going to get real soon!

  3. Shane Beck


    Christmas has come early for the tax cheats. FBT car tax rorts, self education rorts and off shore tax haven rorts all sanctioned by the new government....

  4. Greg North

    Retired Engineer

    Yep, Joe has been busy seeing what's in all those parliament house closets, nooks and crannies.
    No skeletons yet but then there has not been too much sighting of Bill or Kevin and Clive from Queensland there to help him.
    A clearing of the decks says Joe and likely needed to make room for all that may come from the Audit.
    Certainly, we'll be seeing more of measures to tackle that budgetary emergency that a lot of people now feel is not there.

    1. Gary Murphy

      Independent Thinker

      In reply to Greg North

      But of course it will be the poor that will feel the pain. School kids bonus gone but the rich mums paid parental leave scheme to remain, low-income superannuation top-ups gone but taxes on the incomes of million dollar super funds to be cut.

      No word for it but class warfare.

    2. Raine S Ferdinands

      Education at Education

      In reply to Gary Murphy

      Rich mum blah, blah, blah. Rich mums are ok when they pay higher taxes. Rich mums are ok when we talk about gender equality in high office, rich mums are ok when it comes to charities, rich mums are ok when it comes to running businesses and providing jobs for others; but woe be unto them if they are ever included in the paid parental leave scheme. And rich kids are bloody rich kids who are less important to this nation than our poor kids and poor mums. Lets fill this nation with poor mums and poor…

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    3. John Q Citizen, Aussie


      In reply to Raine S Ferdinands

      Our hearts really bleed for you. Whether by inheritance or by business you are in position of wealth. Abbott as 'our PM has actually gifted you a significant amount of money,through his new social/business policies and decided that those people earning less than $38k won't get an additional $500 per year for their superannuation.
      Now you want to compare apples with apples or apples with say quince.
      Now you better dash off tennis at 2pm then hair at 4.30, toodle loo

    4. Raine S Ferdinands

      Education at Education

      In reply to John Q Citizen, Aussie

      Tat, tat, tat! Such anger or is it envy of those who have more than us. Yes, us; for I do not belong to the wealthy group to say the least, but it sickens me to see some lamenting about others who have a bit more. The idea that we need to deny some citizens but are willing to take from them is sad. I suppose it is all relative, this notion of wealth. I consider myself extremely well off in that I am healthy, have a great family with healthy, well adjusted children who have fine critical thinking…

      Read more
    5. Gary Murphy

      Independent Thinker

      In reply to Raine S Ferdinands

      Do you know anything about political economy? How about return on investment? It is a fact that the capitalist economy redistributes wealth from the poor to the rich. That is why you need a socialist government to redistribute it the other way.

      Why do you think rich people earn more than poorer people? Do you really believe it is because they work harder? No - it is because they have the market power to demand a higher income or because they have large amounts of capital to generate a return.

      "No place for such divisive attitudes and envy In this day and time,"

      So we should just pretend the divide between rich and poor in Australia isn't growing rapidly? Hard to do when the conservatives have decided it's the end of entitlement and it's every man for himself. When the media is convinced that increasing property values are only for the best when in fact all it does is make it impossible for more and more people to own their own home.

    6. Raine S Ferdinands

      Education at Education

      In reply to Gary Murphy

      Political economy? Investment returns? Do I know anything? Assumptions galore. Back in my grand father's days, the comment that "..the divide between rich and poor in Australia is... growing rapidly .." was also a common catch cry. In the scope of human existence, disparity has always existed in various degrees. Nature too exhibits different levels; water flows due to different gradients.

      You have obviously misunderstood my point. I do accept that inequality exists in all places on earth; but…

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    7. John Q Citizen, Aussie


      In reply to Raine S Ferdinands

      No envy or anger, for it is you who has already vented ones spleen.
      You have am sad to say shown your true colours to the world and do not deny you are well off.
      Ready any of the National daily newspapers today 7/11/13 you will see in black and white the very same wealth redistribution you vented about.
      Ask not for whom the bells tolls it tolls for thee madam.
      Not everyone will have or has had the opportunities. If you feel that the 'hand out mentality exists, then ask yourself why it exists…

      Read more
    8. Gary Murphy

      Independent Thinker

      In reply to Raine S Ferdinands

      All I said was that rich mums didn't need government handouts - especially larger govt. handouts than poorer ones.

      And we are back to the old conservative fiction that it's the poor's own fault because they haven't grasped the alleged available opportunities. Talk about bashing Aussies - but it's not class warfare when the courageous conservatives are putting the boot into the weak and defenceless.

      Gross inequality is baaaaad for all of us - and the coalition seem intent on making it worse.

    9. Raine S Ferdinands

      Education at Education

      In reply to John Q Citizen, Aussie

      No pity is required John. I am hiding not my wealth for there isn't much to hide; gladly used most of what I earned on my children. Just being civil and fair. Can't stand bullies or the verbal bashing of any sections of our Aussies. Rich mums deserve support as well as do poor mums. Period!! Good bye to your frothing anger. Enough!!!

    10. John Q Citizen, Aussie


      In reply to Raine S Ferdinands

      No anger, just pointing a few salient points.

      I too frown on bullies, I was a police officer in Australia, was actually a 4th gen police officer.

      We all deserve support, you initial post was in actuality being very critical.
      As you say Period!! Good bye to your frothing anger. Enough!!!

    11. Shane Beck


      In reply to Raine S Ferdinands

      Work harder all you single person and childless couple PAYE slaves, Uncle Tony needs more of your taxpayer money to give to the middle and upper class family handout junkies.....

  5. Lee Emmett

    Guest House Manager

    When you compare the $550 figure Tony Abbott bandies about for households' benefit from repealing carbon tax with the concessions given by this government to high income earners (eg. ppl of $75k, or not proceeding with Labor's plan to tax super streams over $100k/year) the one-eyed approach of this LNP becomes very clear.

    If you've got big money, the LNP will make sure you keep it, and get more.

    If you're one of the small fry earning below the average wage, the government won't give super concessions, and if you're a normal wage earner, you won't be able to accumulate as much super because the government is delaying introducing the higher rate for two years.

  6. Allen Martin


    A new rule has been evolved by the Abbott government and it has abandoned labor plan act. The coalition government has deprived on self education tax breaks and this will be more helpful and bring out many changes in the development of the learning and educational courses. This will bring out many changes in the educational reforms and different tax reforms.