23rd May 2016
THE Australian Taxation Office will review its ruling into tax deductions for politicians who own a second house in Canberra, after News Corp unearthed the little-known practise.
Tax Commission Chris Jordan said recent media reports showed there was a “clear misunderstanding” of the 1999 ruling — stressing there were no “special rules” for MPs and Senators.
It comes after News Corp revealed taxpayers were helping pay off the mortgage of some federal parliamentarians who owned houses in Canberra, while also claiming a travel allowance worth nearly $1000 a week.
An ATO spokesman did not respond to questions from News Corp about whether the review would include a probe into individual MPs who had admitted claiming a tax deduction for their Canberra abodes.
But a statement released by Commissioner Jordan said the ruling would be reviewed “to give greater clarity for all taxpayers on the treatment of allowances they may receive from their employers to cover the costs of work related travel”.
In a move the Coalition has tried to deflect as a knee-jerk reaction, Opposition Leader Bill Shorten said Labor would stop federal MPs and Senators claiming a tax deduction for properties they owned in Canberra.
Mr Shorten said the ruling which allowed parliamentarians to deduct expenses including mortgage interest, rates and insurance did not pass the fairness test.
But when quizzed about how they would crack down on the rort, Mr Shorten and Shadow Treasurer Chris Bowen said only that they would seek the advice of experts.
“We will change rulings or laws that deliver preferential treatment to MPs and that are out of line with community expectations,” a spokesman for Mr Bowen said.
“It’s important to ensure with tax rulings that we get the details right, which is why we’d seek the expert advice of treasury and tax experts.”
Both Prime Minister Malcolm Turnbull and Finance Minister Mathias Cormann accused Labor of back flipping, saying the previous day they had supported the setting of entitlements by independent bodies.
“I’ve seen reference to something Mr Bowen said, it seems completely at odds with what Mr Shorten said yesterday but I can assure you that it is very important that the allowances and pay for that matter of politicians is handled independently and not set by politicians,” Mr Turnbull said.
Treasurer Scott Morrison tried to paint the proposal as rushed, saying he would contact Mr Bowen’s office to get the details.
“We’ll have a look at exactly what he is proposing,” he said. “That’s not clear to us yet.”