Let's DO SOMETHING Campaign

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05/08/2010 Campaign Update: We WON 

We wrote to both the Australian Government and the Coalition and basically asked them one question:

Are you, or are you not, going to abolish work-related expenses?

The Coalition replied immediately with an iron-clad guarantee in writing that they will “never abolish work-related deductions in order to increase the tax burden on working Australians” and “never enact measures to prevent taxpayers from making a valid claim for a tax refund”.

The Labor Government continually stonewalled our approaches to try to get them to commit to not implement Henry’s recommendation to reduce or abolish WREs.

And then, after our Press Release was circulated at 5am this morning . . .

At about 10am today, the Treasurer, on behalf of the current Australian Government, in a question relating to the abolition of work-related expenses from the presenter on radio (3AW), stated for the record:

“It's certainly not Government policy, in fact, we're looking at putting in place a standard deduction for those that want to use it, which will be a considerable benefit to many, many Australians, but people who put those work place deductions through our process will continue to do that and nothing is going to change with that, nothing."   

We now believe the right for hard working Australians to receive income tax refunds is here to STAY!  Or at least both parties are on the record saying so.

Click here to read the press release that “won the day”!!!

The Campaign that was 

The NTAA is concerned that the Henry Report's new proposal to introduce 'standard deductions’ for individuals and make it harder to qualify for deductions generally, is the first step towards abolishing work-related expense (WRE) deductions and tax refunds altogether.  

The NTAA has decided to embark on a campaign to reach out to our members, so that they can in turn reach out to their clients and other prominent contacts with whom they are acquainted, to stop this invidious invasion on our rights to claim WREs and receive tax refunds.

Our concerns are that the Government may be planning to abolish income tax refunds.

If we are correct, most employees will have no reason to lodge a personal tax return and will lose their annual tax refund FOREVER.

Why do we think this?

The Government has accepted a Treasury paper that recommends:

  1. The introduction of standardised tax deductions of $500 and $1,000 (Note: this does not mean a tax refund of $500 or $1,000, just a tax deduction); 

However, the Paper also recommends:

     2. Tighter rules on claiming tax deductions above $500 and $1,000; and 

     3. “Removing the need to complete a tax return” (direct quote from the Treasury paper commonly known as the ‘Henry Report’).

This paper advocates moving towards a UK-type system where most employees don’t lodge returns and don’t receive tax refunds.

As we claim well in excess of $1,000 in deductions for most clients, this is just a huge new tax on employees and taxpayers in general. 

Information released by the Australian Taxation Office reveals that the average WRE claims by taxpayers were $2,008 in 2009.  This means that average Australians claim substantially more than the 'standard deduction' being proposed and, therefore, these measures will not offer any tax relief for average, honest, hard working Australians. 

For example, if the average claim of $2,008 is eventually abolished, this will mean that taxpayers would lose tax refunds of $793 (at the 39.5% rate of tax) or $933 (at the 46.5% rate of tax).

Other taxpayers, many of whom claim well in excess of $2,008, will lose thousands of dollars in tax refunds.

What do we want?

We want the Government to walk away from this Treasury inspired attack on our right to receive income tax refunds.  Even if they do bring in standardised deductions we need to let them know that:
  • we don't want claims over the standard deduction amount squeezed or eliminated; and
  • we want our rights to claim deductions and receive income tax refunds set in concrete. 

The campaign starts HERE, please use the attached form to send us information of your contact! Let's DO SOMETHING Campaign was recently discussed on Tax on the Couch, click here to download the video. 

Please click on a link to download the relevant file: