Bigger economic ripples as Swan cuts again

The move to cap the tax deductibility of self-education at $2,000 a year is yet another example of where federal Treasurer Wayne Swan’s efforts to surgically strike at his rich enemies ends up being a nail bomb, with wide and indiscriminate collateral damage.

According to Mr Swan, education expenses include formal qualifications and associated tuition fees, textbooks, stationery and travel expenses and also conferences, seminars and self-organised study tours.

You don’t have to look far to see where the treasurer’s sights are really set.

“Without a cap on the amount that can be claimed under this deduction, it’s possible to make large claims for expenses such as first-class airfares, five-star accommodation and expensive courses,” announced Outraged of Canberra.

Yes, readers, like myself, will know some doctors who took their family with them to Port Douglas while checking out the latest in MRT technology.

While it might seem like a rort to Mr Swan, it is a tiny minority who wish to choose to spend their money – and most of it is theirs after all – in such a way.

To be frank, $2,000 does not get you much, even if you choose to fly economy and stay in a budget hotel and visit local markets for dinner.

Then again, Mr Swan does not live in Western Australia, a long way away from where most professional bodies hold educative conferences and seminars due to, you guessed it, the cost, both in time and money.

Most people are not flying first class or kicking back at fancy restaurants. Just like the superannuation debate, Mr Swan ought to check what his colleagues in federal parliament are doing when they travel overseas. There are few hardships in that line of “self-education”.

And what of the collateral damage? Again, Mr Swan forgets who the beneficiaries are of any spending on self-education.

There is the struggling hospitality industry, a huge employer of unskilled people – those who are often struggling to make ends meet and, quite often, putting themselves through various education courses to improve their lot. Let’s beat them down by charging them for the privilege and reducing their chances of employment.

And there’s the education sector. No matter how much Prime Minister Julia Gillard waffles on about the value of education and training, her six years as education minister and then prime minister has delivered little.

Billions wasted on unnecessary building was no revolution in Australia’s education system, that is why she is lurching for a policy in this area just as she is about to fall off the electoral cliff.

And how does she do this? By cutting off one of the most lucrative sources of income for universities and TAFEs, as well as cutting funding to the tertiary education sector. Incredible.

Another victim will be industry groups, which often rely on conferences and seminars to earn the revenue they need to conduct other, less profitable, fields such as ensuring their industries are properly overseen and engaged with the community.

Funnily enough, industry groups, as representatives of a broad membership and run by professional bureaucrats, are often more conciliatory to government than individual business owners or self-employed members.

Of course, there are exceptions, especially under this federal government but I am still surprised a Labor government would want to hurt these ‘unions’ when it expends so much political capital protecting employee-based groups.

I might also add the airlines. While airlines seem to rank with banks when it comes to public disdain, in a country as vast as Australia, we need them. Anything that curtails spending on air travel, even at the pointy end of the plane, will trickle down to the rest of us in reduced flights and higher fares. Well done.

I have not even begun to cover the question of why those seeking further studies, such as MBAs or any additional tertiary qualification, should not be able to deduct fees from their income tax above $2,000, an easy target to reach these days.

Those aiming to better themselves usually end up with higher incomes and, therefore, pay higher taxes. They ultimately benefit the nation with their improved skills.

Short-changing them, is short-changing the country.