Self education deduction cap would ‘disincentivise’ up-skilling

Australian Business Deans Council President Professor Michael Powell
Australian Business Deans Council President Professor Michael Powell

The Australian Business Deans Council (ABDC) has called on the Federal Government to exempt university tuition fees and related legitimate course expenses from proposed self education deduction caps.

In a submission to Assistant Treasurer David Bradbury ABDC President Michael Powell said capping deductions would “significantly disincentivise” business professionals, executives and managers (and those who aspire to these positions) who seek to upgrade their skills and knowledge by accessing postgraduate university qualifications.

“We need to be up‐skilling all our managers and workers in the digital age, and the capping of tax deductibility will harm this ambition,” the submission said.

As part of the Budget announced in April the Federal Government proposed to limit the tax deduction for work related self-education expenses. Under the proposed changes work related self-education expenses will be capped at $2,000 per person from 1 July 2014. Under current arrangements these deductions are unlimited.

The ABDC calculated that some MBAs may see the cost of their degrees increase by 44% if the proposal is enacted.

“Anything close to a 44 per cent increase in fees would discourage many of these 33,000 business students from continuing their studies—none of our business schools would contemplate raising their own tuition fees by anything near this amount.”

“To pursue capping of tax deductions on self‐funded postgraduate education would see individuals faced with such a significant disincentive to study further, that student enrolments would dramatically fall, SMEs would be disadvantaged by a smaller higher‐skilled postgraduate talent pool, our economy would lose productivity, and the government would not realise the tax revenue savings it envisages.”

The ABDC recommended an alternative – excluding formal education (tuition fees and legitimate course costs) from the proposed legislation ‐ so as not to disadvantage SMEs or individuals making serious investments in their human capital.

“In a world where increasingly a Bachelors degree is not enough, we need to encourage human capital investment – an investment required to transform Australia from a high cost post‐mining boom economy to a thriving socially‐inclusive and knowledge‐based economy, with strong productivity growth and increased international competitiveness.”

Read the full submission


Ben Ready
Ben Ready founded MBA News in 2014 and is the Managing Editor. He is a former business and finance journalist with Australian Associated Press (AAP) and Dow Jones Newswires in London. Ben completed his MBA in 2012 and was awarded the QUT GMAA Entrepreneurship Prize. He is also the founder and Managing Director of RGC Media & Mktng (