The engineering industry is united in a call to the government to abandon a proposed $2,000 cap on tax deductions for self-education, claiming it will damage the competitiveness of Australia’s work force.
Expenses incurred by people undertaking short courses and professional training to further their careers or gain new skills has traditionally been covered by tax deductions. However, a Gillard Government proposal sought to limit claimable self-education expenses to $2,000 per person per year. Assistant Treasurer David Bradbury opened consultations on the proposed cap in May, with those consultations closing this week.
Consult Australia, Engineers Australia and The Green Building Council of Australia have all voiced their concerns.
With engineers, architects, quantity surveyors and project managers all subject to compulsory and ongoing education requirements, Consult Australia CEO Megan Motto says the reforms will hit the advanced services sector hard, with employers unlikely to fill the gap.
“The government should listen to business; scrap the cap and target the education reforms to those who abuse the system,” she said. “This broad cap will act as a disincentive for professionals to invest over $2,000 in self-education and will put regionally-based workers and parents returning to work at a distinct disadvantage."
“The unintended consequence of the limit will be a dumbing-down of the Australian workforce with a consequential negative impact on workforce productivity.”
Consult Australia’s annual skills survey showed that employers in the built environment consulting sector typically spend at least two to three per cent of employment costs, with some spending as much as eight per cent, on training their employees.
“Employers will likely be unable to make greater investments in training as it would make it even harder to remain competitive with service providers operating from lower cost centres overseas,” said Motto. “For small businesses particularly, this cap would see even greater costs incurred by employers – which they simply will not be able to manage.”
Engineers Australia general manager of public affairs Dr Brent Jackson agrees that capping tax deductions at $2,000 will pose a fundamental threat to professional education in the country.
“Any step that makes it harder for people to invest in their skills and expertise is a step backward for Australia. A skilled and educated workforce is no longer an option; it's a basic necessity,” he said.
“If the government is truly committed to maintaining high-tech, innovative construction capability in this country, then professional education must be treated as a priority. The last thing we should be doing is removing incentives for self-funded education.
Green Building Council of Australia COO Robin Mellon joined the chorus of disapproval, arguing that a tax on learning would hinder the adoption of green skills across Australia’s property and construction sectors.
“Green building is one of the world’s fastest-growing industries – and one which is rapidly evolving,” he explained. “People from professional services to trades recognise that sustainability principles and green skills must be integrated into industry at every level."
Mellon said placing a broad-based cap on self-education would serve as a disincentive for anyone looking to upgrade their skills, which in turn would hinder Australia's role as a leader in sustainable development.
“If Australia is to maintain its world-leading capabilities in sustainable building, the Australian Government must encourage ongoing learning rather than looking for short-term opportunities to save cash at the expense of education,” he said.