The tax commissioner, Chris Jordan, will review the system of travel allowances and work-related expenses for members of parliament after public concern about some MPs “double-dipping” by claiming a tax deduction in addition to the travel allowance while staying in their own homes in Canberra.
There was confusion on Monday about rules that allow MPs to claim a tax deduction in addition to the $273-a-night travel allowance to stay in Canberra, even when they stay in a property that they or their partner own.
Critical media reports on Sunday named numerous politicians on both sides of the aisle who owned property in Canberra who would be eligible for the deduction, including Mathias Cormann, Julie Bishop, Michaelia Cash, Richard Marles, Tanya Plibersek and Penny Wong.
Labor had defended the practice on the weekend, but it changed tack on Monday.
The shadow treasurer, Chris Bowen, told reporters the practices involving MPs claiming travel allowances and pursuing deductions were not in line with community standards and needed to change.
The prime minister, Malcolm Turnbull, initially rebuffed Labor’s overture while campaigning in the marginal New South Wales seat of Eden-Monaro on Monday – but while campaigning in Sydney Scott Morrison told reporters he would be seeking particulars from Labor about what it was proposing.
“We’ll be in contact with [Chris Bowen’s] office, that may already have occurred so we can see exactly what he is proposing,” Morrison said.
“And we’ll have a look at exactly what he is proposing.”
But Jordan has effectively neutralised the controversy before it gathers more steam in the election campaign.
In a statement on Monday evening, Jordan said the tax office would review the ruling on MPs allowances to allay community concerns.
“The rules are the same for every taxpayer, regardless of their occupation,” Jordan said.
“Any taxpayer who has had to travel overnight for work is entitled to deduct the costs of meals and accommodation under our tax laws.
“However, 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.”
On Sunday Cormann defended the practice of politicians receiving a $273-a-night travel allowance while also claiming tax deductions for mortgages and rents for properties in Canberra.
He said the travel allowance was set independently by the remuneration tribunal and tax rules were set independently by the tax office, and applied equally to all members of parliament.
“I comply with all of the rules,” Cormann said. “Of course the tax ruling for members of parliament, which is quite comprehensive ... provides what deductions can and cannot be made. I provide all of that information to my accountant.”
