Is the education rebate the FTB of the future?

Labor’s education rebate, under which recipients of Family Tax Benefit A can receive

* A 50 per cent refund every year for up to $750 of education expenses for each child attending primary school (maximum $375 per child, per year)
* A 50 per cent refund every year for up to $1,500 of education expenses for each child attending secondary school (maximum $750 per child, per year)

will no doubt go down well in the electorate. I’m much less keen. It is another example of the government taxing us more than necessary and then giving the money back with strings attached, in this case a requirement that money be first spent on ‘laptops, home computers, printers, home internet connection, education software and school text books.’

Most families will spend this much and more on items on the list anyway, so the distorting effect is likely to be small in this case – it’s effectively just another cash handout for families in exchange for yet more government paperwork (Labor says it will reduce the ‘digital divide’, but this seems unlikely since families still have to find the cash to cover the full cost since they only get the rebate with their tax return, more than twelve months later if they purchase at the beginning of a financial year).

But how long before more of the FTB-linked money starts coming with strings attached, so parents spend the money as approved by Nanny – no fattening foods, no cigarettes or alcohol, no plasma TVs, no clothes made in sweatshops, no coal-generated electricity etc etc.? The current government is bad enough on these things, but Labor is full of busybodies who think they know how the rest of us should live.

4 thoughts on “Is the education rebate the FTB of the future?

  1. “The current government is bad enough on these things, but Labor is full of busybodies who think they know how the rest of us should live.”

    Unfortunately parliament seems to attract such people – there are plenty of them on both sides. However, Labour does have an effective “small l liberal” wing – which is more than you can say of the Liberal party these days – and the balance of power in the Senate is likely to be held by the Greens who, for all their economic naivety, are not especially keen on coercing people other than through taxation.

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  2. I don’t think there’s anything controversial in the idea that education creates wealth. Hence government spending on education is pretty much always a good investment. If the government spent nothing on education, and made it an entirely optional decision, I think it’s a pretty safe bet that total spending on education would drop dramatically, and our economy would ultimately suffer significantly. And looking at various other successful economies around the world, it’s pretty hard to argue that we’re already spending too much on education in Australia.
    Now, whether subsididation of peripheral education costs for lower-income familes is the best way to invest in education is debatable, but to consider this an example of “Nanny-statism” is a real stretch.

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  3. Hi is this Labor education rebate for computer related costs still going to come and if so from when can we actually make the purchase for it to be claimable?

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