Reform to deductions for education expenses

The Australia Government will introduce a reform to deductions for education expenses to cap the claimable amount at AU$2,000. This reform substantially jeopardises the Australia Government’s longstanding policy to invest in all Australians through skills and education, so as to drive Australia’s productivity performance to mitigate the negative effect of our aging population.

The Australian Government has recognised in Australia’s Demographic Challenges[1] the upcoming profound effect on the economy and, potentially, on our living standards, given rise to by the change in demography that over the next 40 years, the proportion of the population aged over 65 years will almost double to around 25 percentile.  At the same time, growth in the population of traditional workforce age – 15 to 64 – is expected to slow to almost zero.

Continued improvement in education and skill levels are identified as a solution to enhance labour force participation.  Statistics covering the period 1981 – 2001 confirm that less skilled workers have not been as involved in the labour force as their more skilled counterparts in the same industry[2].

It has been a longstanding national policy that education and training are important investments that benefit both individuals and the broader economy[3].

The outcome of the current policy setting is that with better skills, the applicant is able to earn more income in the future, pay more tax, and be involved in the labour force for a longer period of time to mitigate the negative effect of our aging population.

Citizens who decide to invest in themselves to improve their skills and consequently contribute more and longer to the Australian economy, are not better off financially through studying.  A year of full-time study for Physical and Mathematical Sciences in the Australian National University is $22,478.  A year of part-time study is around $11,239.  This amount does not include the necessary transportation, books and equipment, required to facilitate the study.  The current tax deductions for education expenses simply make continued education possible for more Australians.

The Reform, applying a blanket approach to introduce a $2000 cap, effectively discourages continuous education and on-going training.  It is not in line with the Australia Government national policy that aims to enhance productivity.  It does not have Australia’s best interests at heart.

Please sign this petition and we will send an important message to both the parties that we Australians want to invest in the future of our citizens and our economy.

 


[1] Department of Communications, Information Technology and the Arts of Commonwealth Australia, Australia’s Demographic Challenges, 2004;

[2] ibid, p.4;

[3] The Department of Prime Minister and Cabinet of Commonwealth of Australia, Australia In The Asian Century, October 2012, p.2 http://asiancentury.dpmc.gov.au/white-paper/pdfs;<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />;

Ibid, p.161;

Attorney-General’s Department of Commonwealth of Australia, Australian Government’s Intergenerational Report (IGR), January 2010, p. III;

Productivity Commission Report to the Council of Australian Governments, Canberra, Potential benefits of the National Reform Agenda, 2006;

Department of Communications, Information Technology and the Arts of Commonwealth Australia, Australia’s Demographic Challenges, 2004, p.1;

ibid p.4;

The Australian Government the Treasury, Reform to Deductions for Education Expenses Discussion Paper, May 2013, p.5

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