An employee working hard to complete further studies to get on in their career; a person needing to complete personal accreditation courses to help both their employee and themselves; a professional attending a conference at their own expense because their employer can’t afford it, especially in these tough times; or as is increasingly happening today retraining and reskilling if you have lost your job.
I won’t go on. The new measures come in from 1 July 2014 – well after this government will be history and won’t have to answer for the consequences of bad policy.
We should never stop learning. Limiting tax deductibility for self-education drives a stake through this very essential right.
Self-education expenses include not only fees for gaining formal, trade, vocational or industry qualifications but fees, text books, stationery, IT equipment, attendance at conferences, seminars and study tours. The worker pays for it from their already heavily taxed wages and gets a tax deduction. It is not, and never has been, a rort (and if it were the tax department has the powers to deny the claim).
Tax deductibility is not making self-education free, it is just helping to numb the pain to the tune of say 35 to 45 cents in the dollar.
Any expenditure cut impacts on the economy as a whole - buses, taxi, trains and planes to attend courses; hostels, motels, hotels to stay; meeting, convention and training venues; catering (local food, restaurants, function centres); content gathering and dissemination (textbooks, printers and apps); teachers and organisers; audio visual suppliers; trade exhibitors; education providers; and a plethora of suppliers to the meetings industry.
The self-education dollar has one of the highest multipliers – said to be around 14:1 return for every dollar spent.
The Higher Education Minister Craig Emerson has been deathly silent – he knows this is a bad decision driven by false economies and an unusually hard line by a government that is supposed to be for the workers.
Mr Emerson, Ms Gillard – self education is how workers get ahead especially when employers have limited budgets due to tough economic times.
The government think self-education can be rorted – it needs regulation and a cap. “Without a cap on the amount claimed people could make large claims for expenses such as first class airfares, five star accommodation and expensive courses” Treasurer Wayne Swann said.
Well $2,000 certainly won’t buy any of the above so it does not cure the problem, it has killed the patient.
A vastly fairer cap would have been somewhere around $20,000 per annum which would cover annual costs of gaining a tertiary degree and some associated expenses. Or capping conference attendance to say $10,000 per event may have been palatable. But the government is not affected – its politicians, judges and public servants can dip into the public trough – it is just those who work for a living in the private sector who are the easy target.
If we can’t manufacture goods any more we need to quickly transition to a service economy. Pulling money from self-education does not make sense for a so called smart country.
The government has gone after a soft target – there are no real statistics or cost benefit analysis about self-education to back this decision. Its just penny pinching in the worst possible way.
We can only estimate that somewhere over half of the courses undertaken and meetings attended by IT industry employees are self-funded because the outcome is a personal, not company accreditation or certification. The vast majority of tertiary qualifications, Bachelor, Masters and MBA’s are self-funded.
We cannot afford to be the dumb country.
On a personal note:
I hope it strikes a chord with you. As a freelance journalist I need to keep my skills honed and was planning at my own expense to do tertiary study in writing and editing as well as media law. I justified it that it would help me to raise my standards and also to help a mature age person transition to a new later life career. We all have stories and I think if you are reading this you will be as outraged as any other learned (or from now on unlearned) person.
Education is a fundamental right, not a rort and you never know when you will need more.
What can you do?
Use technology like Facebook, Twitter and blogs to influence friends who influence friends. Email a link for this article to your local politician and tell them this is bad policy. Importantly make sure that the likely political successors know that this is a root issue and needs to be addressed in policy.
There is little in this world that is as important as education – please JUST DO IT.