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Discussion Paper Exposes New 'Tax on Learning'

13 Jun 2013

AMA Vice President, Professor Geoffrey Dobb, said today that Government assurances that employer-provided genuine medical education would not be affected by new tax arrangements have been undermined by the Government’s own Discussion Paper.

Under the proposed reforms, the tax deduction for work-related self-education expenses would be limited to $2,000 per person from 1 July 2014.

Professor Dobb said that both the Treasurer and the Health Minister have said publicly that the new arrangements would not penalise legitimate education activities and employer-funded education would not be subject to Fringe Benefits Tax (FBT), but the Discussion Paper sets out a different view.  Clause 68 of the Discussion Paper says:

"The Government understands that many employers incur education expenses on behalf of their employees as this training provides benefits to their business. As part of this proposed measure the otherwise deductible rule may no longer apply to education expenses in excess of the $2000 cap. This may result in employers being liable for FBT on any education expenses over the cap of $2000, incurred by them on behalf of their employees."

“The Discussion Paper states clearly that legitimate employer-provided self-education expenses will be caught up in the new arrangements and potentially subject to FBT,” Professor Dobb said.

“It is a tax on learning.

“It goes much further than the Government’s stated policy position.

“It would add enormous cost and complexity to ongoing medical education, and many doctors will be forced to limit or scrap further education as their employers opt out of supporting this activity.

“The danger is that the Australian community will have a medical workforce in the future that is less skilled, less trained, and less motivated than today.

“The tax system will discourage doctors from becoming even better doctors.”

Professor Dobb said that the new tax measures would have a dramatic effect on areas that are already experiencing medical workforce shortages.

“Doctors working in rural areas of Australia, especially Western Australia, Tasmania, and the Northern Territory, will no longer be able to afford the travel and other costs associated with the medical training needed to help them serve their communities, and many may choose to move to larger centres.

“The Government must immediately withdraw the Discussion Paper and instead engage in face-to-face consultation with the medical and other professions to protect genuine and much-needed professional development.”

13 June 2013


CONTACT:         John Flannery                       02 6270 5477 / 0419 494 761

                            Kirsty Waterford                  02 6270 5464 / 0427 209 753

Published: 13 Jun 2013