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.”