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18 Nov 2013

The AMA and its members have won their battle to have the $2000 cap on tax deductions for work-related self-education expenses dumped.

In an outcome hailed by AMA President Dr Steve Hambleton as a “victory for common sense”, the Abbott Government earlier this month announced that the tax cap, which was due to come into effect in mid-2015, had been scrapped.

The decision was the culmination of months of lobbying by the AMA and a range of other industry groups and professional organisations, and has been met with relief by thousands of doctors who faced being left, on average, $10,000 out of pocket if the cap came into effect.

Dr Hambleton said the cap was a tax on learning that would have threatened the quality of health care by discouraging doctors from undertaking the continuing education and training needed to keep abreast of the latest developments in medical treatment.

He said it would have had a similarly devastating affect across the professions, where ongoing professional development was vital to sustaining high quality service standards, and would also have hit the education and hospitality sectors hard.

Former Treasurer Wayne Swan announced the cap in April as part of a package of tax measures intended to help fund reform of school education, and justified it as a legitimate crack down on inflated tax claims for extravagant conferences and workshops involving first class air fares and luxury hotels.

But almost from the moment it was unveiled, the AMA was at the forefront of efforts to have the measure repealed, warning that it would cripple professional development and potentially undermine the standard of care.

“You dumb down the country by stopping people self-educating and improving themselves, in whatever field they are in,” Dr Hambleton said. “The proposed cap was a poor policy that would have undermined medical education and training and made it increasingly difficult for doctors to provide quality health care.”

The AMA President said the incoming Coalition Government had “clearly” heeded the medical profession’s warnings: “We asked the Government to scrap the cap, and they have delivered.”

Treasurer Joe Hockey said the cap was an ill-conceived policy that undermined efforts to boost the nation’s productivity.

Announcing that the cap had been scrapped, Mr Hockey said that of the 639,000 taxpayers who claimed tax deductions for self-education expenses, less than a third (174,000) made claims in excess of $2000.

And of those 174,000, 81 per cent earned less than $80,000 a year, he added.

“They are the people who are trying to invest in their own education to get ahead,” Mr Hockey said. “It was flawed policy, with no motivation other than a simple headline.

“The Government recognised that when, between the course of the Budget and the election campaign, they announced a delay.

“They would never have done it, because they would have been clubbed by the reality that people should be investing in their own education. That is how we improve productivity.”

Dr Hambleton praised the Abbott Government for heeding the AMA’s warnings about the potentially devastating effects of the tax cap.

“The AMA was probably the first group to come out to actually recognise the impact of this,” the AMA President said. “It was going to have a huge impact on junior doctors, a huge impact on rural doctors, and a huge impact on the medical profession's ability to stay up to date.

“We congratulate the Government for actually understanding, hearing the message, and delivering an outcome which is quite appropriate for the medical care of Australians.

“This means Australian doctors will be able to stay up to date, they'll be able to maintain their position as first-world care in this country, maintain the self-education, look after the people of Australia.”

Dr Hambleton also paid tribute to the thousands of AMA members who took part in the campaign to have the cap abolished, including writing to their local MPs, participating in surveys, signing petitions and sharing their stories, including through the doctors4health and scrap the cap campaign websites.

“For AMA members, this victory has probably paid for their AMA subscription for the rest of their lives,” he said. “It is one of the most tangible reasons for non-members to pay their subscriptions so that the AMA has got the resources to take up similar issues in the future.”

Adrian Rollins

Published: 18 Nov 2013