Treasurer Josh Frydenberg has announced that both Covid PCR testing and Rapid Antigen Tests (RATs) will be made tax-deductible.
“Today, I’m announcing that we will ensure that Covid testing expenses are tax-deductible for testing taken to attend a place of work,” announced Frydenberg.
This measure does not extend to the private purchase of RAT tests.
Covid tests will also be exempt from the Fringe Benefits Tax if businesses purchase them for their employees.
While the scheme is set to become official on February 22, the tax write-off is being backdated to July 1, 2021 meaning that Australians earning a 32.5% marginal tax rate will be looking at receiving a tax refund of $6.5 for every $20 RAT test. Small businesses also win, with their Fringe Benefit Tax Liability offset by $20 if those RAT tests were purchased for employees.
It is a far cry from earlier demands to follow other nations and make RAT testing either ‘free’ (government-funded) or heavily subsidised. Covid tests have netted some healthcare and pharmaceutical companies billions in profits as they are either mandated or encouraged worldwide.
“Covid tests are an important tool being used by businesses to protect their workplace and to ensure they can keep their doors open and our supply chains running. As the pandemic has evolved so has our response, and by making common sense decisions like this, we are making it easier for households and businesses to get on with their lives,” said the Treasurer.
It comes alongside bizarre comments from Frydenberg stating that Australians have been partaking in a ‘great reshuffle’ (a reworking of the ‘great resignation’ from America). Frydenberg explained away the figure of over a million workers changing employment as people ‘seeking a better work-life balance’.
The overwhelming feeling from workers on the ground shows that either the pandemic destroyed their previous business and employment – forcing them to seek a new job – or state government mandates resulted in them being fired from their preferred work leading them into a different career.
According to Frydenberg, this ‘allowed workers to move up the job ladder for better pay’. The truth of that statement remains to be seen on the ground.
“Our track record shows that we have got the big calls right – protecting lives and livelihoods but also ensuring our fiscal position remains strong,” added Frydenberg.
While the unemployment rate is ‘falling’, the figure makes no distinction between full-time work and people working a handful of hours a week. It has not yet been explained why huge corporate chains complain of not being able to find workers to fill positions during a time of ‘full’ employment alongside a substantial market contraction that saw the scope of meaningful employment in the private sector fall.
With RATs and PCR tests being made tax-exempt, the public purse will struggle to claw money back from the massive cost of the Covid pandemic on the bottom line – with Australia approaching nearly a trillion dollars in debt.