Disclosure Statement: Durand Financial Services Pty Ltd and its advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. General Advice Warning: The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances.
(Australian Associated Press)
The challenges of an ever-changing labour market have prompted the federal government to consider tax incentives for Australians to change careers.
A discussion paper published on Friday is calling for stakeholders’ views on whether tax deductions on education and training expenses unrelated to a person’s current job could support their future employment.
“People no longer expect a job for life, and may have multiple careers over their lifetime,” the paper from Treasury says.
“The increased rate of globalisation and technological change, the changing nature of work and the labour market are among the forces driving the need for continued upgrading of skills throughout life.”
Currently, Australians can only access tax deductions on study and materials related to their current field of work, the expectation being that further training increases career progression and therefore, income.
The policy idea aims to boost Australians’ employability and income security by diversifying their skills and was announced as an initiative to be consulted on in the 2020-21 budget in October.
The discussion paper says the policy would only benefit those who are able to pay upfront costs of training and who are already employed with an income against which tax could be deducted.
“Low-income earners, including those outside the workforce, with little or no income tax liability would not benefit from a new income tax deduction,” the paper says.
Organisational behaviour expert Ann Brewer told AAP she was concerned the government’s proposal would exacerbate the gap between “haves” and “have nots”.
Because the scheme would require a person to already have an income, it could not help the underemployed or the unemployed, she said.
As the head of education transformation for the NUW Alliance – a collaboration between the universities of Newcastle, Wollongong, Western Sydney and UNSW – Prof Brewer has researched what forms of re-training actually work.
The research overwhelmingly indicated that reskilling was best achieved when it was employer-sponsored, on-the-job training, she said.
“Government sponsored training has moderate effects whereas training linked to current or prospective employment has far greater value and is more likely to lead to productivity and better outcomes,” she said.
University of Sydney Business School’s John Buchanan said there was more demand than ever for Australians to have complex skills to make them employable in the long term.
The types of work Australians do had changed dramatically in three decades, illustrating the need for improvement in this area, he said.
In 1986 about two-thirds of the Australian workforce was in this kind of “routine” work, compared with about half the workforce now.
Prof Buchanan said he doubted the government knew how best to give people the right mix of skills because it had already shown an “instrumental” approach to further education.
He referred to the Morrison government’s decision earlier this year to increase funding subsidies for perceived high-need courses such as nursing, teaching, engineering and IT, to the detriment of arts and humanities degrees.
Responses to the discussion paper can be made via email at email@example.com by January 22.