Tax Break Cut to Harm Foreign Workers

The federal government’s move to scrap some tax breaks for foreign residents in the country is facing harsh criticisms from tax experts. 

According to industry analysts, the country would lose its ability to attract foreign talents because of the cuts of the tax breaks. 

In 2011, Treasurer Wayne Swan said the government would slash the living away from home allowance, effective July last year. Swan said the move would stop the ‘rorting’ done by foreign workers and some high-income executives. 

Swan added that this kind of ‘rorting’ hurts the Australian taxpayers. 

Taxpayers Australia taxation head Roger Timms remarked the government appears to be hiding behind the ‘rorting.’ He added that the allowance cut would discourage Australian companies from recruiting skilled workers. 

In the process, these workers would be discouraged from migrating. 

Robert Walters recently conducted a survey covering more than 300 foreign workers. The results showed that more than 70 percent of the respondents say the allowance loss would dissuade them from staying in Australia. 

Close to 60 percent also said they would seriously consider leaving the country is the allowance is totally withdrawn. Robert Walters is a recruitment firm. 

Aussie businesses have always used this incentive to entice foreign workers to sign their contracts. Workers who migrate to Australia for a job can claim these benefits for food and accommodation. 

Industry analysts also refuted Swan’s claim that ‘rorting’ is rampant in the country. They said abuses can be managed better through stricter implementation of rules and setting parameters. One of the problems is that a LAHFA paid does not need to be reported on tax return, which make it hard to monitor.

They said there are better ways to manage the system instead of abolishing these benefits altogether.