Here’s how politician travel allowances compare to yours

Despite the firestorm currently raging over parliamentary entitlements, most people won’t deny Australian pollies are justified in the amount of travelling they do for work.

Lawfully, parliamentarians nationwide do have access to a lucrative array of politician travel allowances, other allowances and tax deductions, but the reality is that sufficient representation often correlates to frequent travel.

It’s the same with many professions. Take interstate truck drivers for instance; without frequent travel from place to place, work can’t get done. That’s why reasonable travel allowances exist. They help employers cover some or all of their workers’ living expenses while they are away from their primary place of residence. The point of contention is whether reasonable travel allowance measures benefit taxpaying Australians the same way parliamentary entitlements benefit politicians.

Say Alfred, a truck driver, takes a delivery from Melbourne to Newtown in Sydney during one 11-hour stretch. Once his delivery is dropped off, he stays for the night at a motel in Newtown at a cost of $140. Under a travel allowance agreement or award with his employer, Alfred receives $173 per night to cover the expense of his stay. Although the expense is under the reasonable allowance threshold allowance of $173 set out by the Tax Office, Alfred still must show the $173 amount as assessable income in his tax return, and claim $140 as a deductible expense for the expense incurred.

Consider too that reasonable travel allowances provided to employees for accommodation expenses incurred do not require substantiation unless the expense exceeds the allowance given for an overnight stay. If Alfred’s motel room cost $223 for a night, documentation will be needed to claim a deduction for the entire expenditure incurred (not just the excess).

Parliamentary travel allowances, by comparison, are greater. If a politician stays away from their home during a work-related excursion, they’ll receive between $271 and $470 per night to cover their stay. Parliamentarians are afforded a greater reasonable amount from substantiation for tax purposes.  The reason for the difference between parliamentary thresholds and reasonable amounts is not stated explicitly in law.

The 2015 & 2016 Tax Summary contains a complete guide to allowances and awards. Make the right move – get your copy today

Say a parliamentary office holder named Sian travels from metropolitan Sydney to metropolitan Melbourne for work-related function. She stays at a hotel in the CBD for one night at a cost of $350. Under the Remuneration Tribunal’s travel allowance rates, Sian will receive $435 to cover that accommodation expense. As with Alfred, she gets to claim a deduction on the amount of the accommodation costs incurred without substantiation however she must include $435 in her assessable income. But there’s more.

Parliamentary ‘allowances’ are different to parliamentary ‘entitlements’, and for travel expenses, parliamentarians get access to both. That’s an extra set of benefits and deductions for Sian not available to Alfred.

On the face of it, parliamentary entitlements and allowances create a skewed spectrum that faces away from the average taxpayer. But the nature of parliamentary work mandates frequent travel, and frequent living out of home. Regardless, these entitlements are enshrined in law; as the debate on parliamentary entitlement abuse continues it’s important to note our representatives are required to follow the tax law no differently to other Australian taxpayers.

Post a comment