Government considering tax incentives for Aussies to change careers

The challenges of an ever-changing labour market have prompted the federal government to consider tax incentives for Australians to change careers.

A discussion paper published on Friday is calling for stakeholders’ views on whether tax deductions on education and training expenses unrelated to a person’s current job could support their future employment.

“People no longer expect a job for life, and may have multiple careers over their lifetime,” the paper from Treasury says.

“The increased rate of globalisation and technological change, the changing nature of work and the labour market are among the forces driving the need for continued upgrading of skills throughout life.”

Currently, Australians can only access tax deductions on study and materials related to their current field of work, the expectation being that further training increases career progression and therefore, income.

The policy idea aims to boost Australians’ employability and income security by diversifying their skills and was announced as an initiative to be consulted on in the 2020-21 budget in October.

The discussion paper says the policy would only benefit those who are able to pay upfront costs of training and who are already employed with an income against which tax could be deducted.