The 2009-10 Federal Budget was released at 7.30pm, 12 May 2009.
A summary of the relevant Budget details for the Education sector
are set out below:
Investing in Education
This Budget invests $5.3 billion in tertiary education,
research and innovation over six years.
$2.6 billion will be committed to the Education Investment Fund
(EIF) for priority infrastructure projects in Australia's
tertiary institutions and research agencies. Applications for round
3 of the EIF will commence later this year and successful projects
will be announced in 2010.
A further $491 million will be invested over four years to
uncap the number of university places from 2012, starting with
increased places from next year, allowing an extra 50,000 students
to commence university courses by 2013.
Research and Development
From 1 July 2010, the current research and development tax
concessions will be replaced with an expanded tax credit.
The new Tax Credit provides:
a 45 per cent refundable credit for firms with an annual
turnover of less than $20 million (equivalent to a concession of
a 40 per cent non-refundable credit for businesses with
turnover above $20 million (equivalent to 133% concession)
However, the eligibility criteria including the definition of
R&D will be tightened to ensure that support is better
The Government intends to release a consultation paper within
the next few months.
Word Investments case
The Government provided an interim response to the High Court of
Australia's decision in Federal Commissioner of Taxation v Word
Investments, which was handed down on 3 December 2008. This
decision dramatically changed the existing interpretation of ATO
regarding the entitlement of entities to endorsement as Tax
Concession Charities. The significant implications of the case
commercial businesses with charitable objects that direct their
profits to charities are eligible for endorsement by the ATO as tax
concession charities and therefore have access to a number of tax
charities are considered to be pursuing their objectives
principally 'in Australia' if they merely pass funds within
Australia to another charity that conducts its activities
In response to the case, the 'in Australia' requirements
of Division 50 of the Income Tax Assessment Act 1997 will be
amended to ensure that Parliament retains the ability to fully
scrutinise those organisations seeking to pass money to overseas
charities and other entities.
These changes will only be made after the Henry Review into
Australia's future tax system and the Productivity
Commission's inquiry into the contribution of the not for
The Government will amend the fringe benefits tax (FBT) law to
ensure that donations to deductible gift recipients (DGRs) made
under salary sacrifice arrangements do not result in an employer
incurring an FBT liability, with effect from the 2008 09 FBT
Other major reforms to higher education include:
goals for attainment and low socio economic status enrolment
backed by funding;
a student income support system that is aligned with need;
improved indexation arrangements which better support the
sector for the long term across learning, teaching and research;
a new national regulator and quality assurance system Tertiary
Education Quality and Standards Agency (TEQSA), linked to
For further details regarding employment taxes, please refer to
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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