Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

The Tax Laws Amendment (Education Refund) Bill 2008 amends the Income Tax Assessment Act 1997 to introduce the education tax refund. The education tax refund will provide a 50 per cent refundable tax offset for eligible education expenses up to a maximum of $750 for children undertaking primary education studies and $1,500 for children undertaking secondary education studies. The coalition will support this bill.

The education tax refund is a budget measure which has its origins in a 2007 Labor Party election policy. The education tax refund will apply to eligible expenses incurred from 1 July 2008 and will therefore be claimable from 1 July 2009. Eligible expenses for the education tax refund include the purchase, lease or hire-purchase of computers and computer related equipment, computer software, home internet connections, school textbooks and other paper based school learning material, and prescribed tools of trade.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Parry interjecting—

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I may get to that shortly, Senator Parry. The government is right to be concerned about primary and secondary education in this country. I have little doubt about the sincerity of the Minister for Education, Ms Gillard, and indeed the minister representing her in the Senate, my good friend Senator Carr. They are right to say that the challenges that face us are large. And while the detail is still sketchy, I am pleased to note the new approach to schools and teaching outlined recently by Ms Gillard. Standards, accountability and transparency are goals very well worth pursuing. I wish the minister luck and I hope that she will not be hindered in pursuing these reforms by recalcitrant teaching unions, as the Howard government sadly was.

The Chief Executive of News Corporation, Mr Murdoch, said in his recent Boyer Lecture that education in this country is not a pretty picture. He said:

The unvarnished truth is that in countries such as Australia, Britain, and particularly the United States, our public education systems are a disgrace. Despite spending more and more money, our children seem to be learning less and less—especially for those who are most vulnerable in our society.

Mr Murdoch’s views are supported by research conducted by the Australian National University. This research published early this year found that despite per child spending on education having increased substantially since the 1960s, literacy and numeracy performance among Australian students is no better now than it was back in the 1960s and the 1970s.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

The finding that the literacy and numeracy of Australian students has not improved since the 1960s truly is a disgrace. Mr Murdoch is right about that. This is not a partisan point, Senator Conroy. This is a point that goes not so much to federal governments but also to state governments. The fact that there has been this extra expenditure by state and federal governments and no increase in literacy and numeracy is a disgrace. Moreover, Mr Murdoch concludes:

… a public school system that does not serve the least of society betrays its mission. The failure of these schools is more than a waste of human promise, and a drain on our future workforce. It is a moral scandal that no one should tolerate. A basic education—and the hope for a better life that it brings—ought to be the first civil right of any decent society.

It is all very well to talk about equality but schools must also be held accountable. I was very lucky and had a good education and indeed I think most people here did as well. But it is always the children of the disadvantaged that suffer the most and have fewer options than the elite because of poor education. As Mr Murdoch points out, it is not that the poor are getting poorer; it is that the economic rewards to the skilled and the educated are making them much richer. Certainly the Senate Standing Committee on Economics and their report on this bill unanimously agreed with that and said:

Cross-country comparisons of economic growth generally suggest that increasing education is beneficial for the economy (in addition to its other merits) …

It is not only the interests of the individual students and their families that benefit from this program but society much more generally. I have always thought that education is more than simply an economic good. It promotes civility, it appreciates complexity and it provides those with an education a critical capacity and a sense of perspective and of proportion. These are all things that I am sure you would agree were perhaps lacking seriously in the 20th century.

The coalition supports this bill because it does provide some relief to parents in relation to certain education expenses. But we believe that the bill could have been improved by more fully promoting choice and promoting flexibility.

The government’s proposal centres on information and communications technology. While important perhaps—and we concede that—these expenses are not necessarily the most important faced by parents. Parents should have greater flexibility to make choices about the sorts of expenses they can claim under the education tax refund. For example, for many low-income families their greatest priority is not securing a computer or internet access but getting uniforms and paying the costs of excursions and school camps. Many parents might believe that their refund would be better spent on these more immediate priorities.

While the government has said much about early childhood education and has even devoted a member of the executive with a special responsibility for early childhood education, the opposition also notes that education expenses in relation to preschool education are not eligible for the education tax refund. Again, parents might believe their child would benefit from assistance with these expenses more than with the narrower opportunities provided pursuant to this bill.

Perhaps the most fundamental problem with this bill is that, whereas the government is keen to assist parents in ICT related matters, that assistance will only go so far. We now know that the cost of computers, for example, is only about one-fifth of the total cost of operating them. We now know that the Rudd government has grossly underbudgeted its digital education revolution by failing to take into account those one-off and ongoing costs connected with the installation and maintenance of computers. We also now know after exhaustive sessions in Senate estimates, from public stoushes between the federal government and state Labor governments, including former New South Wales Treasurer Mr Costa’s infamous attempt to extort money from the Commonwealth government, as well as documents available under FOI, that state governments have refused to pick up the tab and pay the costs of implementing federal Labor’s election promises. And who can blame them?

The Labor government has promised to deliver computers to the one million year 9 to 12 secondary students in this country. They have budgeted $1,000 for the capital costs of each computer and all the associated costs such as internet connection, software, computer support, upgrade and electrical wiring, storage, insurance and so on. Everyone now knows that even if each laptop only costs $500—and that is a very low and a very generous estimate—based on the one to four ratio I mentioned earlier, all the additional one-off and ongoing costs will be at least $2,000 on top of that. So $1,500 has not been budgeted for.

Just tonight, very cunningly, at five to five this evening, in response to a question on notice I had asked at Senate estimates about the Commonwealth’s estimates of the ongoing costs of computers—guess what? The final report entitled Review of legitimate and additional financial implications of the national secondary school computer fund was released. I might add that it is dated 3 September 2008. So it has been sitting on the desk of the Deputy Prime Minister and education minister, Ms Gillard, since 3 September. Now we have it, nearly three months later.

I quote from the top of page 7: ‘The Commonwealth’s review has determined that a reasonable overall estimate of the cost of deploying each additional computer is $2,500 over four years.’ So, after all the horror, all the tempestuous behaviour at estimates, in the end the government finally conceded that the $1,000 they budgeted for is $1,500 under budget per computer. Multiply that by a million computers—my maths is not very good, but that is about $1.5 billion.

But I also learnt something very interesting a bit after five o’clock this evening. The government proposes to give $800 million to the state governments at the COAG meeting on the weekend to help pay for this, so there is another $800 million that has not been looked at in the forward estimates that will also be added to the budget deficit—$800 million at least—and the government itself says that will not be enough. So we are really looking at an extended budget deficit probably in excess of another billion dollars. It is a huge turnaround, but at least, after making an election promise in November last year, the government has at long last—12 months later—finally released some estimates to the public. The government is pretty generous to itself; they are very low estimates, but even the government has said $2½ thousand. On page 27 of the report, we see the estimates that the states believe and they are nearly always between roughly $4½ thousand and $5,000, which is roughly twice the estimate of the Commonwealth government. But, even if we take the Commonwealth government’s very, very low estimates, it is still $1½ billion underbudgeted. We will no doubt hear a lot more about that in the ensuing week.

The New South Wales Labor government have said that they will not pay the difference and they will not take any more computers until the federal government accepts the expenses and commits to footing the bill. Other governments say the same thing. Whether the $800 million secured for COAG by the Commonwealth government this weekend will satisfy the states, I do not know, but it is another $800 million to the deficit.

Just as with all other initiatives of the Rudd government: voter beware! So it is too with this bill. The refund will cover some but not all the costs of acquiring and running a computer. It is a good start perhaps, but parents should be mindful that it is not a one-stop-shop solution to their educational IT needs at home. The coalition believes that greater flexibility in the sorts of eligible expenses claimable as an education tax refund would be beneficial to parents and students, especially expenses such as school fees. This was the coalition’s policy before the last election, and we believe that such flexibility would greatly enhance the utility of this bill. Still, this bill is a step forward for education in this country, and the opposition will support it.

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate the speeches of Senator Catryna Bilyk and Senator Helen Polley.

Leave granted.

Catryna Bilyk (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

I am delighted to rise in support of the Tax Laws Amendment (Education Refund) Bill 2008.

This Bill will be of great benefit to parents across the nation—and it is a Bill that many people have been waiting for over a very considerable time , over 11 years, but of course it falls to us, a Rudd government to deliver it.

About the Bill

This Bill will deliver to parents a refund of 50 per cent of eligible expenses incurred in meeting the costs of their children’s primary or secondary education.

Parents will be entitled to a tax offset of up to $375 per child in primary school and $750 per child in secondary school.

Assuming these amounts aren’t increased this adds up to a saving of $7,125 per child over the course of their schooling.

Some of the equipment for which parents may incur expenses eligible for the Education Tax Refund ( or ETR as it is commonly known) include laptops, home computers, internet access, printers and paper, educational software, school textbooks and prescribed trade tools.

This Bill delivers on the Rudd government pre-election commitment to introduce the ETR and provide some welcome relief for families with schoolchildren.

And of course, every parent wants their child, or children, to have the best opportunities in life - and that means giving them the best education possible.

Providing even the basics for a child’s education involves some financial sacrifice and that can put some strain on the family budget.

This Bill will deliver realistically in the budgets of ordinary, everyday families. It will help to ease some of that burden.

The Rudd Government made this commitment before the last Federal Election because we recognise that you can’t have an Education Revolution without parents being able to meet the basic costs of putting their children through school.

The ETR will be provided to families on the basis of need.

This is why parents will be eligible the Education Tax Refund in respect of children for whom they are also eligible for Family Tax Benefit Part A.

However, there are concessions for certain families that fail to meet the full eligibility for the ETR.

The ETR has been expanded to include these concessions so that its administration is fair and it is applied where it is most needed.

For example, if a parent has a child who receives income support such as Youth Allowance, AUSTUDY or the Disability Support Pension—but would otherwise have been eligible for Family Tax Benefit Part A in respect of that child,

• they will still be eligible for the ETR for that child.

Families who share receipt of Family Tax Benefit Part A or have shared care arrangements will share the ETR just as Family Tax Benefit Part A is shared.

If a child enters or leaves school in any year, their parents will be eligible for an amount of the ETR attributable to the half of the financial year that they attended school.

If a student transitions from primary to secondary school during a financial year their parent will be eligible for the ETR based on the secondary school rate.

Parents with home-schooled students will be eligible for the ETR if their child is registered with the relevant state or territory authority.

Students living independently will also be eligible for the ETR.

It is estimated that eligibility for the ETR will extend to 1.3 million families extending to 2.7 million students.

And may I say, one of the great things about this Bill is that it doesn’t matter which school you go to.

Promoting the ETR

I have written to a number of schools in Tasmania advising them of the Rudd Government’s commitment to legislating for the Education Tax Refund.

Some schools have communicated this information to parents through their school newsletters or other means.

I have done this because it is important for parents to be aware of the ETR even before it has been legislated.

I have been urging parents to make sure that they keep receipts for expenses incurred in respect of their children’s schooling in case they are eligible to claim the ETR in their 2008-09 income tax return.

Parents should keep receipts for any expenses incurred after 1 July 2008 for which they think they may be eligible for an Education Tax Refund.

Of course, parents should seek advice from the Tax Office or a registered tax agent if they’re not sure whether they are eligible for the ETR or don’t know what expenses they are entitled to a refund for.

Those eligible to claim the ETR will be able to claim it for the first time in their 2008-09 tax return.

There are some parents eligible for the ETR who will not otherwise be required to lodge a tax return.

For these parents, a simple form will be available from the Tax Office to allow them to claim the ETR without having to complete a tax return.

Importance of the ETR

It is estimated that the Education Tax Refund will cost $4.4 billion over the next four years.

It’s important to remember that when the Prime Minister—then Opposition Leader—announced Labor’s policy of delivering the ETR during the 2007 Federal Election, it was released at the same that we announced our income tax policy.

We were able to fund the ETR by holding off tax cuts that the Coalition had proposed for people earning a taxable income of over $180,000 per year.

It was our view at the time—and it remains our view—that people earning that sort of money are probably doing okay at the moment.

We thought that parents struggling to meet their children’s school expenses are in a bit more need of help.

Of course, we could have just as easily offered a general tax cut to parents of schoolchildren so that they would have had a choice to spend it on whatever they liked.

But the ETR is about more than just assisting parents to meet the expenses of raising school age children.

It’s about providing incentives for parents to invest in their children’s education.

And what better incentive is there than reducing those costs each year by $375 or $750 per child?

A general tax cut could be spent indiscriminately, but some of the constituents who have contacted my office have commented to my office that they are considering purchasing computers for their children’s education if they are eligible for the ETR.

Given the prevalence of information and communications technology in schools nowadays, being able to study on a home computer puts students at a huge advantage.

Of course, there are many other basic expenses that parents could have subsidised by the ETR.

Many public and private schools prescribe specific textbooks for their subjects.

The way the Australian dollar has been performing recently as a result of the global financial crisis means that prescribed textbooks sourced from overseas will now be more expensive than before.

School textbooks will now be more affordable from year to year, as will the large quantities of stationery that parents often have to buy.

As has been the continuing case since the change of government last year the Coalition has yet again criticised a Rudd government initiative.

There have been comments made that the ETR is not broad reaching enough, but let’s consider what would have happened had they been elected.

Not only were they going to retain their tax cuts for people earning over $180,000 a year, … but that were going to add to that an Education Tax Refund that would have cost three times as much as ours.

Of course they only came up with their policy for a tax refund as a direct response to ours.

But faced with a proposal that was so well received by ordinary Australians—one that helped families with schoolchildren meet the costs of living but also gave them some incentive to invest in their children’s education—they reverted to their instinctive response -which is to try and spend their way out of trouble.

Rather than consider how best to target assistance they took a scattergun approach and decided to try and outbid us.

This was a pattern they began in 1998 and it saw them through several elections, so much so that their response to a political crisis became almost involuntary in their response:

Oh! We have a problem with this specific demographic—let’s throw some money to that area—and hopefully this will get us votes.

It was partly because voters were sick of this reckless spending and , of course, they knew they were being misled—that many people decided to vote the Coalition out

It has only been by putting the brakes on reckless spending that the Rudd Labor Government was able to build up a $22 billion surplus, a surplus that was continually attacked and eroded in this place by those opposite.

I would like to know how the Coalition would have responded to the global financial crisis without a decent surplus to use to stimulate economic activity.

They would have had two choices, revert to borrowing for their economic stimulus or ignore the crisis and let the economy suffer.

While Australia’s economy is in a better position than most to withstand the global financial crisis, our position could have been much improved had the previous Government not failed to invest in the drivers of productivity.

And one of the greatest drivers of productivity is education, training and skills development.

That’s why Australia needs an Education Revolution.

The Education Revolution

The Education Tax Refund is an important plank in the Rudd Government’s Education Revolution.

All up the 2008-09 Budget includes $19.3 billion to deliver the Government’s election commitments to education over the next four years.

The Rudd Government has established an Office of Early Childhood Education and Child Care in the Department of Education, Employment and Workplace Relations.

One of the Office’s major roles is to implement our commitment to deliver universal access to 15 hours a week of early childhood education for four-year-old children.

The early years of a child’s life are the most crucial in regard to brain development.

And scientific research points to the critical importance of an appropriate learning environment for very young children.

I cannot emphasize enough how important this fact is.

In fact—the foundation of neural structures in the frontal lobes of the human brain are not fully developed until approximately the age of twenty-four.

This means the brain continually develops, and we know that in order to achieve full potential a child needs interaction in all types of environments, and it is easier to learn new skills and take in knowledge when young as opposed to later in life.

An extra year of early learning could make a huge difference in the educational attainment of Australia’s children.

The Rudd government focus is revolutionary.

It starts with very young children and if we want to look for the areas of greatest disregard by those responsible for education during the Howard years, then this is where we begin —because there has been many OECD surveys pointing to the shameful underperformance of Australia when it comes to investing in the early years of education.

Let’s remember that in 2006 Australia was ranked 25th out of 26 countries on the OECD indicator looking at the proportion of students enrolled in pre -primary education—hardly a ranking to be proud of, in fact members of the Howard Government should hang their heads in shame.

Let’s also remember, there was a comprehensive failure by the Howard government to invest in the professional training of those who care for very young children.

That is an area where the education revolution is being focused: on investing in the qualifications of those who care for our very important young people.

The Rudd Government believes it important for students to develop the basics in education and we want a focus on skills in literacy and numeracy.

The Government’s National Action Plan on Literacy and Numeracy targets the students who need it most and includes funding specifically targeted at Indigenous students.

Another important initiative is the development of a National Curriculum, which will ensure that there is consistency across states and territories in what students learn.

One of the advantages of the National Curriculum will be that students can move across state borders and continue their education where they left off with minimal disruption.

It will also help to develop more comparable university entrance criteria.

We also need to make sure that students of the twenty- first century are equipped with the tools of the twenty- first century.

The Rudd government is working hard to develop a highly skilled workforce, including funding for trades training centres in secondary schools which will encourage more secondary students to learn a trade.

Our pre-election commitment to provide 450,000 new training places over four years was extended by the 2008-09 Budget.

We will now provide 630,000 new training places over five years including 85,000 apprenticeships.

We have established Skills Australia to advise on current and emerging skills needs.

The Howard Government in its 11 years failed to undertake a serious assessment of Australia’s skills needs and it was this failure that led to the skills crisis that we faced when we took Government in 2007.

The Rudd Government will also be undertaking a major reform of employment services, which will provides incentives to Job Network members to support the most disadvantaged job seekers.

Finally, we have created an $11 billion Education Investment Fund, which includes the $6 billion from the existing Higher Education Endowment Fund.

This fund will support capital works at educational institutions throughout Australia including universities, research facilities and vocational institutions.

The Education Revolution may be a series of programs, but it is a comprehensive series that addresses the various aspects of education that need addressing.

We have provided funding that supports the built infrastructure in our educational institutions.

We have invested in early childhood education and are undertaking reforms to ensure that schools provide quality education right through primary and secondary school through our initiatives on school accountability, the National Curriculum and literacy and numeracy.

We are investing in skills through new training places and trades training centres.

And finally, we are undertaking major reforms of employment services to make sure that all Australians regardless of their educational attainment are able to find work, especially the most disadvantaged jobseekers.

All these policy proposals do not stand alone but fit together like a jigsaw puzzle to create a comprehensive, quality education system from early childhood right through to vocational education and training and university.

Throughout the development of the Education Revolution, we are implementing our policies through a process of negotiation through COAG.

This is a recognition of the role of the states and territories in education as well as the need for a national education agenda.

This is why a spirit of co-operation with the states and territories is vital to the Education Revolution.

It is a stark contrast with the big stick approach to dealing with the states taken by the previous Government.

Instead of negotiating with the states they threatened to withhold new funding unless the states did things their way.

You would think that they would have used this power for a serious undertaking like comprehensive reform in education or helping lift the performance of underperforming schools.

But instead, they used it to make sure that schools installed flagpoles.

I don’t recall flagpoles ever being particularly high on the COAG education agenda.

So where does the Education Tax Refund fit in to the Education Revolution?

• It recognises the important role of families in supporting students through school.
• It provides an incentive for parents to invest in the education of their children and to take an interest in their children’s material educational needs.

The ETR is of particular importance to my home state of Tasmania.

According to ABS statistics, Tasmanians earn less income on average than any other Australian state.

One of the really unfortunate impacts of socioeconomic disadvantage is that some parents, while able to get a quality education for their children through the public school system, cannot always afford to support them with the basic expenses that inevitably arise.

Ironically, education is most reliable way of getting out of a cycle of poverty.

The ETR will go some way towards helping families meet those expenses.

The fact that it is a fully refundable tax offset rather than a deduction, means that although it supports families of various means it still provides relief to those most in need.

It is with great pleasure I stand here to talk about this very important bill which delivers on the promises that Labor made during the campaign and continue to fund and maintain while in office.

I commend the Bill to the Senate.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

Mr President, thank you for allowing me this opportunity today in the Senate to speak on the Tax Laws Amendment (Education Refund) Bill 2008.

This Amendment was one of our key election commitments. It will enable thousands of Australian school children to obtain necessary items for their schooling.

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. Parents face a range of pressures and they have many responsibilities.

The Education Tax Refund comes in the wake of reports over several years that have highlighted the difficulties of schooling costs for low-income families.

For example, the Brotherhood of St Laurence’s 2007 Education Costs Survey found 72 per cent of respondents could not afford items for that would ‘improve the education experience of their children’ and two-thirds did not have a home computer with Internet access. About 60 per cent had difficulty paying for books and almost half reported difficulty paying for equipment.

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, printers, scanners, computer software, internet connection, text books—these all add up.

Families are already facing a range of cost pressures—mortgages, petrol prices and grocery bills, just to name but a few. Add the costs of getting your kids ready for school, and then supporting them throughout the year with uniforms and school camps fees present a real challenge for a lot of 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.

We recognise this, and that is why we are offering this help.

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.

Our $4.4 billion Education Tax Refund builds on Labor’s Education Revolution - a core part of Labor’s strategy to drive Australia’s long-term economic prosperity.

The Rudd Labor Government is committed to implementing an Education Revolution. We recognise that education is the engine room of prosperity and helps create a fairer, more productive society.

Ultimately, it is the most effective way we know, to build prosperity and spread opportunity.

The Education Revolution is a key element of the Australian Government’s agenda as it is central to the goals we have for this nation:

• Building a Stronger Future—Increasing Australia’s capacity to sustain higher economic growth with low inflation through increasing the skills base of the labour force and aligning that skills base with the needs of the economy.
• Building a Fairer Australia—Raising the skills and capacity of all Australians, particularly those with low skill levels, is essential to ensuring equity in the economic, social and political life of the nation and
• Preparing for Future Challenge—Australia faces significant changes to its social and economic environment through an ageing population and increasing international competition.

The nation must invest in developing a world class education system and drive development of a workforce that is highly skilled, flexible and adaptable in responding to increasing global competition for skills.

If Australia is to rise to these challenges, we need a revolution in the quality of our education outcomes, the nature of our investment in education and in collaboration between governments and the education and training sectors.

The Australian Government considers that the COAG reform agenda must deliver real changes in three core areas:

1.

Raising the quality of teaching in our schools.

2.

Ensuring all students benefit from schooling through strategies based on high expectations of attainment, engagement and transitions for every student, especially in disadvantaged school communities.

3.

Improving transparency and accountability of schools and school systems at all levels.

A key part of our education revolution is helping parents meet the everyday costs of their children’s education.

We want to helping parents meet the costs of the books and the computers and the software our kids need, to get the best start.

That’s why the Federal 08/09 Budget included $4.4 billion to create a new Education Tax Refund.

The Education Tax Refund is a refundable tax offset of 50 per cent of eligible education expenses for children undertaking primary and secondary school studies.

About 1.3 million families, with 2.7 million students, will be eligible for the Refund.

Under the plan eligible families will be able to claim 50 per cent of eligible education expenses up to $750 for each child undertaking primary school, to provide a maximum tax offset of $375 per child, per year.

For children undertaking secondary school studies families will be able to claim 50 per cent of their eligible expenses up to $1,500 per child, to give a maximum tax offset of $750 per child, per year.

Families entitled to Family Tax Benefit Part A for children in primary or secondary school in the relevant financial year are eligible for the Education Tax Refund.

Eligibility for the Education Tax Refund also extends to parents with school children who would be eligible for Family Tax Benefit Part A but for the fact that the child is receiving certain payments or allowances, such as Youth Allowance, ABSTUDY Living Allowance, Disability Support Pension, payments under the Veteran’s Children Education Scheme and payments under the Military Rehabilitation and Compensation Act 2004.

We have also taken into consideration families with shared care arrangements. In this instance, arrangements for the Education Tax Refund will be shared, just as Family Tax Benefit Part A is shared.

Families with home-schooled students, who are registered with their State or Territory government, may also be eligible to claim the Education Tax Refund. It is important to note that students undertaking school studies who are independent of their parents may also be eligible.

For students making the transition from primary to secondary school in a single financial year the full Education Tax Refund, based on the secondary-school rate, can be claimed. Families with students who enter or leave school in any school year are able to claim the Education Tax Refund for the half of the financial year that they attend school.

Eligible expenses that have been incurred by a parent or guardian with more than one child with an Education Tax Refund entitlement can be pooled and claimed against the children’s combined Education Tax Refund entitlement, provided that the children all have access to the purchased items.

As you can see, this program is available to many students. This program will help so many working families meet their children’s educational expenses. This Government cares about working families, and, unlike the previous Government, we are not going to deny our children of the education they deserve.

Eligible expenses for the purposes of the Education Tax Refund are laptops, home computers, printers, paper, education software, school textbooks and associated materials and trade tools.

This includes purchase, lease, hire or hire-purchase costs of these items. In addition, the expenses of establishing and maintaining a home Internet connection are also included.

This measure is designed, together with other measures in Labor’s Education Revolution, to lift school retention rates long-term —where Labor’s target is to increase year 12 equivalent retention to 90 per cent by 2020.

According to research by the OECD, the growth rate of the economy would be up to 1 per cent higher if the average education level of the working-age population was increased by one year.

This plan is an excellent example of how the Rudd Labor Government is doing the right thing by working families.

The tax offset will apply to eligible expenses incurred from 1 July 2008. Those eligible for the Education Tax Refund should start keeping receipts to allow them to claim the tax offset in their 2008-09 income tax return from 1 July 2009.

For those not required to lodge an income tax return, they will be able to access their entitlement to the offset through the Australian Tax Office by lodging a separate form at the end of the 2008-09 financial year.

This scheme will help families invest in their children’s education —at the same time that the Government is investing in a better education system.

Federal Labor believes that better education is the cornerstone of a decent society. We know that education increases productivity and participation, it builds prosperity, and it also offers the hope of breaking the intergenerational cycle of poverty.

While our predecessors spoke of improving Australia’s education system, we are getting on with the job of real education reform. Those opposite should be ashamed of their record on education.

May I take this opportunity to remind the Senate that the Howard Costello 2007 Federal Budget delivered private schools a $1.7 billion increase over the next 5 years to rise to $7.5 billion, while public schools received only $300 million to rise to $3.4 billion.

It is shame that those opposite used their position in the Senate to underfund our public school system and blatantly spoon feed money to private schools.

In our first Budget we allocated $19.3 billion to education initiatives over the next four years to help deliver our commitments on:

• A national curriculum in English, Maths, the Sciences and History;
• $1.2 billion Digital Education Revolution;
• $2.5 billion Trades Training Centre program; and
• Guaranteed funding to both government and non- government schools.

The Liberal Government talked about teacher training, performance standards, literacy and numeracy, but after 12 years, 24 reports and 220 recommendations, there was nothing much to show of it.

No national teaching standards. No national curriculum. Too many kids still leaving school too early. Too many who are unable to read or write. We understand there is much to do to right to the wrongs of the past. We have to make up for 12 years of neglect.

Our Prime Minister Kevin Rudd and Deputy Prime Minister and Minister for Education Julia Gillard are working very hard and acting now for Australia’s long-term future.

During last years’ Federal election campaign, Kevin Rudd did something that hadn’t happened at national level in 12 years. He put education at the front and centre of the public policy debate in this country.

On November 24 last year, the Australian people voted in favour of the Education Revolution and voted against the 12 years of neglect administered by the Howard Government.

After 12 long years of neglect, we can’t deliver an education revolution overnight. But, the Rudd Labor Government has made a solid start because we want every child to get the best possible start in life.

The Rudd Government is committed to creating an education revolution to build a world class education system, which would establish Australia as one of the most highly educated and skilled nations.

This commitment recognises the central role that education plays in the economic and social strength of our nation. Education not only drives productivity but also empowers individuals to reach their full potential, and helps overcome disadvantage.

So I say to the eligible parents in Australia of this Education Tax Refund, KEEP YOUR RECEIPTS!

I commend this Bill to the Senate and I encourage those opposite to do the same. Working families need this support. Our children deserve to be equipped with the best technology that will enable them to learn and be equipped for the future. A key part of the Education Revolution is helping parents meet the costs of their children’s education.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I would like to thank all senators who have taken part in the debate on the Tax Laws Amendment (Education Refund) Bill 2008. An important aspect of the government’s education revolution is assisting parents with the everyday costs of providing an education for their children. That is why the government has provided for a $4.4 billion investment in the education tax refund, as announced in this year’s budget.

The education tax refund is aimed at parents and other caregivers and consists of a refundable tax offset for 50 per cent of eligible education expenses for children undertaking primary and secondary school studies. Importantly, this bill delivers on the government’s election commitment to assist families with the costs of educating their children. From 1 July 2008, eligible parents and guardians will be able to claim a 50 per cent refund each year on up to $750 of eligible education expenses for each child undertaking primary studies. This will provide a maximum refund of up to $375 per child per year. For children undertaking secondary studies, families will be able to claim a 50 per cent refund on up to $1,500 of education expenses per child. This will provide a maximum refund of up to $750 per child per year. Not only does this refund apply to primary and secondary students attending school; it also applies to home-schooled students who are studying a primary or secondary course, provided that they are registered with their relevant state or territory.

There are a wide range of eligible educational expenses which can be claimed as part of the education tax refund. These include laptops, home computers and associated costs, printers, computer software, trade tools for use at school, school textbooks and stationery, as well as a home internet connection. These educational costs can be incurred by way of purchase, lease, hire or hire-purchase, which gives families choice in how they go about incurring the expenses. This will be particularly helpful for those families who cannot purchase a laptop or home computer outright, as they will have the opportunity to obtain these types of educational items by way of a lease or hire arrangement.

Parents and others entitled to family tax benefit part A and who have children undertaking primary or secondary studies will be eligible for the education tax refund. Eligibility for the education tax refund is also extended to those who would be eligible for family tax benefit part A in respect of a child but for the fact that the child, or they on the child’s behalf, is in receipt of other support payments, such as youth allowance or ABSTUDY living allowance. Students who are living independently from their parents may also be eligible for the education tax refund in respect of their own expenses.

The education tax refund will apply to eligible expenses incurred from 1 July 2008. So I would say to all eligible parents: if you have not already started doing so, please start keeping receipts for educational items so that you can claim the tax offset in the 2008-09 income tax return from 1 July 2009. As the education tax refund is a refundable tax offset, this means that even if you do not pay tax you will still be able to benefit from this offset. For those people in this situation who are not required to lodge a tax return, they will be able to claim the tax offset by lodging a separate form to be available from the Australian Taxation Office. The first claims for the education tax refund will be accepted following the end of the financial year, from 1 July 2009.

This bill implements the government’s election commitment. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.