Inquiry into Tax Deductibility: Submission to the House of Representatives Standing Committee on Economics

This submission to the House of Representatives Standing Committee on Economics Inquiry into Tax Deductibility addresses two deductions only: self-education expenses and donations to deductible gift recipients (DGRs). The inquiry was examining options to broaden the tax base by removing or reducing deductions in exchange for lower rates. Research Australia maintains that fairness, which is absent from the terms of reference, must be considered, because some taxpayers legitimately incur much higher costs in earning income. It describes the health and medical research workforce of about 34,500 people, including around 13,500 researchers, 87% of whom work in government, higher education and non-profit organisations, and cites an Australian Society for Medical Research survey showing that 80% of respondents earned under $100,000 and only 16% were not reliant on grants for ongoing employment. Because most researchers are on fixed-term contracts and work in a global, specialised field, many pay for conferences, travel and training themselves. The submission notes that the United Kingdom allows education deductions for researchers whose duties include education, and maintains that removing the deduction would unfairly disadvantage researchers and discourage lifelong learning. It also warns that removing deductibility of donations to DGRs would reduce giving and increase pressure on government to fund education, health and welfare services. It recommends the Committee to weigh fairness and unintended consequences in any change.