Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

The Treasurer has provided the following answer to the Honourable Senator's question:

(1) This measure, which was announced in the 2010-11 Budget, will improve the sustainability of assistance for taxpayers with high unreimbursed medical expenses by increasing the claim threshold for the net medical expenses tax offset, which had not been increased since 2002-03, and commencing indexation to ensure the threshold keeps in line with changes in the CPI.

(2) This measure increased the threshold above which a taxpayer may claim the net medical expenses tax offset from $1,500 to $2,000. The threshold will also be indexed to movements in the consumer price index in future years, with the first indexation to occur on 1 July 2011.

(3) Details of this were announced in the 2010-11 Budget and contained in Budget Paper No. 2.

(4) The administration and compliance costs associated with this measure are low.

(5) As the measure did not involve changes to the way in which government support for this offset is delivered, no consultation was undertaken.

(6) The threshold above which a taxpayer may claim the net medical expenses tax offset had not been increased since the 2002-03 income year. Since that time, medical costs and wages have increased significantly. This measure will improve the sustainability of assistance for taxpayers with high unreimbursed medical expenses.

(7) Government often considers various options during the policy development process.

(8) The Government considers that assistance through the net medical expenses tax offset should be adjusted to reflect changes in the CPI.

(9) No modelling was undertaken on the impact of this measure.

(10) While no formal forecasting has occurred, this measure is not expected to have any impact on the broader economy.

(11) International comparisons were not required for this measure.