Reform to Deductions for Education Expenses – A Submission in Response to the Discussion Paper

This submission responds to a discussion paper proposing to cap tax deductions for self-education expenses, including conference registration, travel, textbooks and journal subscriptions, at $2,000 a year. Research Australia accepts the need to protect the tax system from abuse but opposes the cap as an arbitrary breach of the principle that costs incurred in producing income are deductible. It describes the health and medical research workforce: about 34,500 people, with 87% of researchers employed in government, higher education and non-profit organisations, relatively low salaries, and heavy reliance on fixed-term grants (only 16% of surveyed researchers were not grant-dependent). Because grants and indirect cost funding rarely cover conference attendance, researchers often pay these costs themselves; one researcher’s case study reports $7,200 in personal conference spending in a year. The submission maintains that in research, where the product is knowledge, conferences and journals contribute directly to that product, and notes that the United Kingdom allows deductions where conference attendance is integral to research. It warns that the cap would slow the dissemination of knowledge, reduce international collaboration and skills, and lower Australia’s research profile. Its responses to the consultation questions recommend exempting research-related conferences and seminars from any cap, abolishing the $250 no-claim threshold if a cap proceeds, and asking Treasury to model the effects using Australian Taxation Office data before acting.