Labor’s costings show that its planned $3,000 cap on deductions for managing tax affairs will raise a projected $120 million in FY2020–21 and FY2021–22, and $130 million in FY2022–23.
For the federal opposition, the central tenet of the policy is that the deduction is being overused by high-net-worth Australians, and has been been likened to a “rort” by the Opposition Leader Bill Shorten.
The IPA’s chief executive, Andrew Conway, sees serious flaws in the way the figures Labor is relying on have been represented.
“The figures used are based on a very small sample. These in themselves do not justify a policy of capping deductions for tax advice,” Mr Conway said.
“In addition, if the numbers being bandied around are using aggregated data, they will result in grossly overstated averages for adviser fees for this sample size.
“The ATO data that has been used related to the 2016–17 financial year. The label in the income tax return that makes up these figures includes adviser fees, ATO interest charges and litigation costs.
“If aggregated figures are being used, then this is misleading the public.
“Importantly, if aggregated figures are being used, the predicted savings will not be realised. You can polish the crystal ball as much as you like, it doesn’t mean you will see future savings.”