$2k cap on broker education expense deduction 'ridiculous' and bad for clients

by Mackenzie McCarty17 Jul 2013

The Treasury’s proposal to cap work related education expense deductions at $2,000 from July 1 2014 could have a detrimental impact on brokers – particularly those seeking to diversify, according to FBAA president, Peter White.

“[The legislation] provides nothing but a negative result for industry…or clients of any professional services business (as this could set precedents across a wide range of business services),” says White.

“You simply can't put a tax on or put a barrier in front of education, as it’s an invaluable and integral part of a professional person’s skillset and business needs - and the needs of their clients.”

White says he will be meeting with shadow minister for financial services, Mathias Cormann and shadow minister for education, Chris Pyne, sometime in the next three weeks to discuss the ‘very bad piece of proposed legislation’ and the impact it could have on brokers.

The Treasury’s current proposal suggests all expenses incurred in education activities would be subject to the cap, including expenses for ‘both formal and informal education’. This includes registration fees paid for conferences, workshops and seminars, as well as tuition fees and travel expenses, among other costs.

But White says the cap is inappropriate, given that brokers are largely already paying for their own up-skilling, rather than relying on government aid.

“Knowledge and continuing education/development (CPDs) is everything - and this is being paid for by that person and not based on the need for government subsidies either, so it’s a ridiculous contemplation.”

COMMENTS

  • by David 17/07/2013 9:14:42 AM

    Our once smart country is being dumbed down. This change plus $2.8 billion in cuts from universities and TAFE. What's next?

  • by Broker Tony 17/07/2013 10:04:55 AM

    If you have to travel interstate to the MFAA Conference and pay for accommodation you will blow the whole $2k allowance on one event! What about your own aggregator's conference, webinars and other training? This is dumb policy! MFAA will also have to stand up here or industry events will become a thing of the past. If training costs above $2k are no longer tax deductible does that mean FBT could apply to payments for training on behalf of staff/directors etc?

  • by Incognito 17/07/2013 10:23:36 AM

    We can still do over $2k of training per year - we just can't claim it all.

    If education yields a positive return we'll still do it.

    If not then it was probably a bit of a rort. Overseas junkets etc, we know the deal.

    Surpluses are important, aren't they?

    Tony could then raise it to $3k and be the golden boy, the hero of education. Who'd have..