ATO wants to review this controversial entitlement for politicians

A spotlight has been put on this controversial entitlement where MPs and senators are allowed to claim a tax-free $273-a-night

A spotlight has been put on this controversial entitlement where MPs and senators are allowed to claim a tax-free $273-a-night travel allowance – to stay at their own Canberra properties. At the same time, they are also allowed to simultaneously deducting rent, rates, maintenance and other costs on the property from their taxable income.

Apparently, some politicians also stay at properties owned by their spouses and use the $273 nightly allowance to pay off the mortgages.

The Australian Tax Office says that they will review this entitlement which has enabled politicians from both sides to cash in on generous tax deductions, a system that opposition Leader Bill Shorten said was not fair.

The ATO has now promised to review the 1999 ruling that underpins the entitlement. But Tax Commissioner Chris Jordan stressed that politicians were not afforded any “special” treatment by the tax system.

“Any taxpayer who has had to travel overnight for work is entitled to deduct the costs of meals and accommodation under our tax laws,” Mr Jordan said to SMH.

“Given that there are clear misunderstandings of how the ruling is applied, we will undertake to review the 1999 ruling to give greater clarity for all taxpayers on the treatment of allowances they may receive from their employer to cover the costs of work-related travel.”

Finance Minister Mathias Cormann, Labor’s environment spokesman Mark Butler and Liberal Democracy senator David Leyonhjelm have all outed themselves as “double-dippers” in the system, claiming both the travel allowance and aforementioned tax deductions on their own properties.

Prime Minister Malcolm Turnbull said he had claimed the $273-a-night travel allowance “like every politician” but would not say whether he had also claimed tax deductions.

Mr Shorten said he was not aware of the particular entitlement that allows for costs associated with the properties to be deducted from taxable income.

“I was not aware that you could do that. I have not made those claims but I understand they are within the existing rules,” he told reporters.

“Now, what I have asked Chris Bowen and my treasury team to do is to look at how we close down this ruling.”

The 1999 ruling says that MPs can deduct expenses including “lease payments; rent; interest on borrowings used for the acquisition of the property; rates; taxes; insurance; general maintenance of the building, plant and grounds”, as long as the property is not regarded as a second residence.

“A deduction is also allowable for depreciation of plant used in connection with such a property,” the ruling states.


Do you think it’s fair for politicians to be allowed to claim tax deductions for these ‘personal’ expenses?

  1. Sue Kelly  


    • Geoff  

      It’s simply called double dipping. If we did this we would end up in court charged with tax fraud, I agree wtf

  2. Linda Sykes  

    I definitely do not agree that politicians should be entitled to use their travel allowance to pay to stay at their own or a relative’s property. That’s double dipping and a blatant rip off of tax payers’ money. All politicians’ entitlements need to scrutinised and adjusted to reflect community expectations of fairness and value for the economy.

  3. Not only do they use the $273 allowance to pay off their mortgages, but they have other politicians stay in their house and pay the $273 as well, thereby making a very nice little profit.

    For example, if a pollie stays himself and has three other pollies also staying in his house, he can rake in $1092 per NIGHT. Great if the nights add up to many and all paid for by the taxpayers. YUM YUM

    And they’ve had this sweet little earner going on for years, folks.

  4. Clare  

    These people are running our country- no ethics

  5. Rob  

    The government can blame it all on the parliamentary renumeration tribunal. A completely independant authority. Appointed by the politicians and paid for out of the public purse. They granted all politicians a 93% pay rise, a 4% pay rise and a 3% pay rise in the space of a year. (Labors last year in office) Independent? Rightt. If you believe that you will believe anything.

  6. Judy Durich  

    Do Not Agree – they should be on the same rates as other workers that travel. They work for us – we are paying them – the perks have to stop – our business (Australia) can not afford them.

    • Hilry  

      Totally do not agree. Everybody should be on the same rates. Irregardless of their position. Parliamentarians should not have bigger gains than others considering their rates of pay and their choice to be in the positions they have chosen.

  7. Henry  

    “A deduction is also allowable for depreciation of plant used in connection with such a property,” the ruling states.

    OK, but surely this applies only to the portion used for employer related work, NOT PRIVATE usage, doesn’t it?

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