Monday, May 07, 2012

Labor's Education Tax Rebate, a bad program buried

It says a lot that they persisted with it for so long

The soon-to-be-buried Education Tax Refund was appalling on just about every level.

As the Treasurer last year lauded a different move he said would enable Australians to “throw away their shoebox of receipts” his prime minister was going around the country promoting an extension of the Refund to cover school uniforms. “Now it is extended to school uniforms people should keep their receipts and they will be able to make a claim at tax time,” she said.

Sold in the lead-up to the 2007 election as a way of getting more educational resources into households, the refund enabled well-advised parents to claim for all manner of purchases they were probably making anyway. Even the advertising slogan read: “You may be surprised by what you can claim”.

Among the costs for which families could claim only tangentially connected with education were USB sticks, internet bills and printer cartridges.

Its genesis had little to do with education and everything to do with Labour’s attempt to come up with a tax policy in the days leading up to the election that swept Kevin Rudd to power.

Lacking the resources of Treasury Labor was worried its figures wouldn’t add up, so it waited until the Coalition’s Peter Costello released his tax policy and then duplicated every part of it but one. The cuts Costello would have given Australians earning more than $180,000 per year were excised and replaced with a refund for parents on Family Tax Benefit A in order to “benefit the education of around 2.3 million Australian school children”. The alternative of actually spending the money on education was tossed aside at the press conference unveiling the scheme... as was the suggestion it would mainly benefit the better organised and informed parents on Family Tax Benefit A, those whose children were likely to need help the least.

The replacement payments to be announced on budget night of $410 for each child in primary school and $820 for each child in high school will go direct to all parents on Family Tax Benefit A including the 1 million who didn’t claim what they were entitled to. They won’t much advance the cause of education, but neither did the Education Tax Refund.

In today's Sydney Morning Herald and Age

Now I think about it some more, the catchline "You may be surprised by what you can claim" encouraged disrespect for the tax system. It invited people to use an 'education refund' for purposes unrelated to education.

There were even Indigenous-themed ads:

How the new Schoolkids bonus will work

. Paid automatically parents on Family Tax Benefit A before term 1 and term 3

. Worth $410 per year for each child in primary school

. Worth $820 per year for each child in high school.

. Preceded by a lump-sum payment in June

Related Posts

. IT'S OUT: Labor's tax policy including a (tiny) education revolution

. Labor's tax policy: nine parts me-too, one part Robin Hood

. A computer will help your child get ahead. Well...


Andos said...

Is this an attempt to provide some covert stimulus money, akin to the $900 payments in 2009?

Peter Martin said...

Yes. Coming in the same month as the carbon compensation advance payments it'll be quite a stimulus. Bizarre really.

Anonymous said...

Is it possible to claim the education tax refund as well as this bonus this year?

Peter Martin said...

Oh yes.

From tomorrow's story, about today's retail sales figures:

"The lift in retail sales comes ahead of the schoolkids bonus of $410 for each primary school child and $820 for each high school child due to go into more than one million bank accounts in June and the clean energy payments of between $87 and $110 per child due to go into the same accounts in May."

Nic Stuart said...

I remember the press conference where the idea was originally announced and you questioned Rudd on the idea. He refused to answer your question and insisted it was all about the future. How sad those hopes look today!

Peter Martin said...

Thank you for remembering Nick, Rudd's biographer.

How optimistic things were then. We actually expected evidence-based policies. We actually expected things to have been thought out.

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