Overall the budget appears to be reasonable for the education sector with no significant decreases in funding. In particular it is pleasing that there are no cuts to the education investment fund.
GST treatment of appropriations – Ministerial power
It has often been difficult to determine whether payments between government related entities are appropriations for GST purposes. This has become particularly more difficult since the TT Lines Case in 2009. The appropriations definition has recently been changed in an attempt to alleviate this difficulty. It is pleasing that there is now an ability to remove any remaining doubt by providing a regulation making power in the GST law so that the Minister can prescribe that certain payment are not subject to GST. Where there has been doubt about the treatment of certain payments we would recommend that universities and schools ensure these payments are included in any regulations.
Replacing education tax refund with a schoolkids bonus
As announced prior to the budget by Wayne Swan the Education Tax Refund which is currently available as an offset has been replaced with a schoolkids bonus. Unlike the education tax refund, the schoolkids bonus will not require parents to substantiate their education spending by retaining receipts.
The schoolkids bonus will be made in two equal instalments in January and July each year commencing January 2013. Every family with a child at school will be guaranteed $410 per annum for each primary school student and $820 per annum for each secondary school student.
The measure will cost $2.1 billion over a five year period.
Investing in science and maths
At the smaller end, $55 million has been committed to increase the quality of teaching in science and maths. This is intended to boost interest in these subjects and build Australia's skills base in these critical areas.
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