Friday, 22 November 2013

Treasurer Joe Hockey says Government will dump cap on self-education expenses

Treasurer Joe Hockey says Government will dump cap on self-education expenses

Updated Wed 6 Nov 2013, 3:16pm AEDT
Treasurer Joe Hockey says the Coalition will ditch or change tax measures worth $3.1 billion proposed by the previous government, including a contentious cap on self-education expenses.
The Government has set itself a December 1 deadline to resolve uncertainty over dozens of tax and superannuation policies dating back to 2001.
Of 92 announced but unlegislated proposals, Mr Hockey says the Government will keep 18, amend three and dump seven.
The remaining 64 will be the subject of consultation about whether to cancel or keep them, "with a disposition not to proceed".
Labor announced a $2,000 cap on self-education expenses at the last budget, to save $266 million over the forward estimates.
But the Treasurer says that is "flawed policy" which will be dumped.

"Of the 174,000 taxpayers affected by Labor's cap on self-education, 81 per cent earn less than $80,000 a year," Mr Hockey said.
"They are the people who are trying to invest in their own education to get ahead.
"It was flawed policy with no motivation other than a simple headline."
As previously announced, the Coalition is dropping Labor's proposed fringe benefits tax changes for the car industry.

Key points

  • Coalition to keep 18 of 92 unlegislated tax proposals
  • Remainder will be either dumped, amended or reviewed, a cost of $3.1b to budget
  • Cap on self-education expenses dumped
  • Low-income superannuation tax offset linked to mining tax scrapped
  • Fringe benefits changes for car industry dumped
  • Coalition keeping Labor's tobacco excise increase, raising $5.3b for budget

It is also not proceeding with changes to the tax on superannuation pensions, which Mr Hockey said was worth $313 million at budget time but which were so complex as to be "undeliverable".
But Labor says the Government's decision shows "twisted values" and "wrong priorities".
Opposition treasury spokesman Chris Bowen pointed to the Coalition's plan to scrap the low-income superannuation tax offset linked to the mining tax as "unfair".
"This Government fundamentally doesn't understand, fundamentally does not get that it's unfair for Australia's low and middle-income earners to receive effectively zero tax concession on superannuation when Australia's high-income earners get substantial tax concessions for superannuation," he said.