“The twelve month deferral represents a temporary but significant reprieve for the hundreds of thousands of people who choose or are required to invest in their own education and professional development,” said Belinda Robinson, Chief Executive of peak body, Universities Australia (UA).

The announcement follows the formation of a #ScrapTheCap Alliance of more than 70 industry and professional groups (led by UA) representing over 1.6 million professionals, united in their outrage over the negative economic and labour market implications of what would amount to a tax on education.

In announcing the tax cap earlier in this year – delivering a saving of approximately $520 million – former Treasurer Wayne Swan justified it on the basis of cracking down on system abuse.

“If implemented the measure would have increased the effective cost of post-graduate fee paying courses by an estimated 30 – 54 per cent resulting in a decline in post-graduate and professional development programs by an estimated one third.

“It would reduce national productivity by up to $6 billion per annum and reduce tax revenue by up to $1.5 billion per year.

“It would exacerbate skills shortages across the board, take us backwards in realising our ambition to become a knowledge nation built on education, skills and innovation, and scotch any aspiration to increase national productivity to 2 per cent.

“It is clearly within the powers and the capability of the Australian Tax Office to ensure that individuals do not receive private benefits at the expense of Australian tax payers.

“As the Economic Statement notes, the deferral `will allow for further consultation on how best to target excessive claims while ensuring the impact on university enrolments and genuine continuing professional development is minimised.’”

Ms Robinson said that the #ScrapTheCap Alliance would use the opportunity of the twelve month deferral and review process to continue to press its case in opposing policies at odds with achieving a smarter Australia.

“UA acknowledges the role played by Higher Education Minister Senator Kim Carr and Treasurer Chris Bowen in acknowledging that a more sophisticated approach to addressing alleged abuses of the taxation system should be explored.

“We also call on the Opposition to declare its hand on whether it intends to abolish the measure,” Ms Robinson said.