Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

In addition to the issues touched on by my leader, Senator Evans—the budget delivering the lowest debt and deficit of any advanced economy in the world, and bringing the budget back into the black; into surplus three years early—there were a number of other important measures. One that I want to highlight to the Senate goes to a significant and major personal tax simplification. It is important that the government take action to address issues of cost of living pressures for working families and reward them for their efforts during the global financial recession.

From 1 July 2012, taxpayers will be able to claim a $500 standard deduction for work related expenses. This will increase to up to $1,000 a year later. Under the current system, as I am sure everyone is aware, taxpayers face costly and unneeded complexity as they try to interpret what is deductible, to quantify work related costs correctly and apportion expenses between income earning purposes and private purposes. Providing a standard deduction will remove this burden from many taxpayers.

No taxpayers will be disadvantaged. Taxpayers with expenses above the standard deduction will be able to continue to claim these expenses when lodging their tax returns. This will benefit 4.6 million taxpayers in 2012-13, and some 6.4 million taxpayers when that quantum increases to $1,000. Those 6.4 million taxpayers will no longer have to participate in complex claims. The standard deduction initiative delivers on another important recommendation of the independent Australia’s future tax system—report to the Treasurer.