Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

asked the Minister representing the Treasurer, upon notice, on 10 March 2011:

With reference to an increase in the medical expenses tax offset claim threshold:

(1) What is the policy intention of the proposed measure.

(2) How does the proposed measure enable the policy intention to be achieved.

(3) Is the effect of the proposed measure revenue neutral:

(a) if so, how has revenue neutrality been achieved;

(b) have other saving measures been needed to achieve revenue neutrality;

(c) if not, how much revenue is expected to be raised as a result of the measure; and

(d) can the annual numbers for the forward estimates period be provided, and any further information covering the longer term.

(4) Have the likely administrative and compliance costs of implementing the proposed measure been assessed; if so, what are they.

(5) (a) What stakeholders will be directly affected by the measure;

(b) have these stakeholders been involved in consultation prior to and during the development of the measure;

(c) what consultation has the Government been engaged in; and

(d) have independent bodies or experts been involved in the consultation process.

(6) Is this proposed measure a government response to an identified problem; if so, what problem is it addressing.

(7) Were any alternatives considered before this approach was proposed; if so:

(a) can details of those alternatives be provided; and

(b) why was it decided that those options would not be implemented.

(8) Will inaction pose a risk to the integrity of the tax system or broader government administration; if so, how would you rate that risk.

(9) What modelling has been carried out in developing the proposed measure.

(10) Have the broader implications of the implementation of the measure on the economy been forecast; if so, what are they.

(11) Have international comparisons been considered and does the proposed measure accord with international 'best practice'.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to 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.