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A tax plan for Australia's future: Labor's $2.3 billion education tax refund.
A Tax Plan For Australia's Future - Labor's $2.3 Billion Education Tax Refund Media Statement - 18th October 2007
Kevin Rudd Stephen Smith Wayne Swan
A Rudd Labor Government’s Tax Plan for Australia’s Future will invest $2.3 billion in financial support to help working families meet the growing costs of educating their children.
A Rudd Labor Government will provide a new 50% Education Tax Refund to help families of around 2.3 million school-age children meet the costs of education.
Under Labor’s 50% Education Tax Refund, eligible parents will be able to claim:
â¢ A 50 per cent refund every year for up to $750 of education expenses for each child attending primary school (maximum $375 per child, per year). â¢ A 50 per cent refund every year for up to $1,500 of education expenses for each child attending secondary school (maximum $750 per child, per year). â¢ Therefore a typical family with a primary school aged child and a secondary school
aged child would receive a tax refund of up to $1,125 per year.
Together with Labor’s Tax Plan for Australia’s Future, Labor’s 50% Education Tax Refund will boost Australia’s productivity and ease cost of living pressures for working families.
All families who receive Family Tax Benefit (Part A) will be eligible for Labor’s new 50% tax refund for eligible education expenses.
Eligible expenses are for items that support a child during school and improve the quality of education a child receives. Eligible items will be defined as:
â¢ Laptops; â¢ Home computer and associated costs; â¢ Home internet connection; â¢ Printers; â¢ Education software; and â¢ School text books.
Labor’s new 50% Education Tax Refund will help ease the financial pressures faced by working families.
This is the next chapter in Labor’s Education Revolution to make Australia the best educated country, with the most skilled and best trained workforce in the world. A Rudd Labor Government will revolutionise education investment, standards and outcomes.
Parents understand the importance of their children’s education. That’s why Australian parents work so hard to give their children the best possible start in life. Parents make sacrifices so their children can succeed; they face a range of pressures, and are proud of how they juggle their many responsibilities.
Federal Labor believes that Australian parents are doing a great job. But we also understand that parents appreciate a bit of extra help when it is available.
The cost of equipping children for school is significant. Computers, internet connection, text books - these all add up. Families are already facing a range of cost pressures - mortgages, petrol prices and grocery bills, to name but a few. Add the costs of getting your kids ready for school, and then supporting them throughout the year, and it presents a real challenge for families.
Research from the Department of Families, Community Services and Indigenous Affairs suggests that the costs of raising a child increase as children grow older.
The costs for one child can increase from $8,300 a year for a six year old, to over $10,000 a year for a 14 year old. These are gross costs, before government payments and child care costs.
Surveys show that parents of primary school children can expect to pay between $58 and $129 in books alone, and an average of over $1,300 for computer and Internet costs. For secondary school children it can cost parents from $148 to $619 for books, and an average of over $1,600 for computer and Internet costs. This survey is across government, Catholic and Independent schools.
Investment in education is central to the next wave of economic reform that will position Australia as a competitive, prosperous, knowledge-based economy that can compete and win in global markets.
If Australia is to continue to succeed economically it needs a highly skilled and productive workforce. The key to building such a workforce is ensuring that all kids get a world-class education.
Education provides individuals with an opportunity for success. It can help change life circumstance and can be the foundation of an individual’s prosperity.
The refund will be available to all families who receive Family Tax Benefit (Part A). Families with children at school receiving Youth Allowance will also be eligible for the credit. School fees will not be an eligible item of expenditure.
With the new 50% Education Tax Refund, a family with three children, one in primary school and the other two in secondary school, will receive a benefit of up to $1,875 each year.
Over the course of their children’s education, a family with three children will receive assistance of up to $21,375.
Cameos: potential benefits per family
Parents will be able to claim the costs associated with computers and laptops, internet connection, education software, and school textbooks.
To ensure that all families can receive the maximum benefit available, parents with insufficient tax liability will be able to transfer any unused amount of their Education Tax Bonus to their spouse. If both parents pay insufficient tax, the family will receive the credit as an equivalent transfer payment.
NOTE: THE TABLES BELOW ARE ALSO AVAILABLE AS A PDF UNDER DOWNLOADS ON THIS PAGE.
For families with FTB-A
Family Income p.a.
Primary school aged children Secondary school aged children
1 child 2 children 3 children 1 child 2 children 3 children
$ 15,000 375 750 1,125 750 1,500 2,250
$ 20,000 375 750 1,125 750 1,500 2,250
$ 25,000 375 750 1,125 750 1,500 2,250
$ 30,000 375 750 1,125 750 1,500 2,250
$ 35,000 375 750 1,125 750 1,500 2,250
$ 40,000 375 750 1,125 750 1,500 2,250
$ 45,000 375 750 1,125 750 1,500 2,250
$ 50,000 375 750 1,125 750 1,500 2,250
$ 55,000 375 750 1,125 750 1,500 2,250
$ 60,000 375 750 1,125 750 1,500 2,250
$ 65,000 375 750 1,125 750 1,500 2,250
$ 70,000 375 750 1,125 750 1,500 2,250
$ 75,000 375 750 1,125 750 1,500 2,250
$ 80,000 375 750 1,125 750 1,500 2,250
$ 85,000 375 750 1,125 750 1,500 2,250
$ 90,000 375 750 1,125 750 1,500 2,250
$ 95,000 375 750 1,125 750 1,500 2,250
$100,000 0 750 1,125 0 1,500 2,250
$105,000 0 750 1,125 0 1,500 2,250
$110,000 0 0 1,125 0 0 2,250
$115,000 0 0 1,125 0 0 2,250
$120,000 0 0 0 0 0 0
$125,000 0 0 0 0 0 0
$130,000 0 0 0 0 0 0