The government’s $2,000 cap on the tax deductibility of self-education expenses is “short-sighted,” according to the Institute of Public Accountants (IPA) and could have adverse outcomes for clients of SMSF practitioners.
Limiting the ability of those seeking to advance their knowledge and remain up to date “fails Economics 101”, IPA chief executive officer Andrew Conway told SMSF Adviser.
“There is an increasing demand for qualified and experienced professionals to service an ageing population; it just defies logic that [a] government would seek to remove the incentives [for] professionals who enhance their skill base to provide [those] services,” Mr Conway said.
“Why a government would try and impose such a constraint on the economy, it completely defies logic apart from achieving a short-term budget outcome.”
Mr Conway added that this cap could “significantly restrict” the capacity of professionals to undertake training, which by extension could potentially affect the quality of advice given to clients, including those with SMSFs.
“Any government would be foolish to impose any measure that... has the potential to smother such a massively growing sector… it just fails any law of economics for anyone to impose a restriction on the quality of advice.”
The IPA is calling on the government to rethink the measure and take “swift action” to resolve any uncertainty.
“We think there’s an opportunity for discussion and opportunity for a more practical solution,” Mr Conway said.
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