Change in tax to fit footy codes
AUSTRALIA'S football codes are bracing themselves for the impact of changes to the living away from home tax allowance that kick in next month.
The dramatic narrowing of the allowance will make transfers to interstate and overseas clubs financially less attractive both to players and coaches.
The change is expected to have the biggest impact on Super Rugby clubs such as the Western Force - on the opposite side of the country to rugby's heartland - and young players who move interstate to join the squads of NRL and AFL teams.
The living away from home allowance is a government benefit offered to Australian citizens who have to move interstate or overseas for their work, as well as to overseas employees who come to Australia for their jobs and hold a 457 temporary work visa. In effect, the allowance reduces the taxable incomes of those eligible to receive it.
But as part of a fringe benefit tax reform expected to provide savings of nearly $700 million, the federal government from July 1 will limit the tax exemption to only those who can demonstrate that they are maintaining a residence for their personal use in Australia and that they are living away from for work purposes.
Anyone claiming the allowance will also be required to substantiate their expenditure on accommodation and food.
So concerned is the NRL at the impact of the tax changes on young footballers moving away from their family homes to play for interstate clubs or the NZ Warriors that it wrote last month to the Assistant Treasurer David Bradbury and the Minister for Youth Peter Garrett asking that players under the age of 25 be exempted.
Even if the allowance is not directly factored into players' salary packages, it undoubtedly is weighed up by players contemplating a change of clubs.
Potentially the football code most affected would be Australian football, although the AFL to date has taken no direct action over the changes.
"We're still assessing the potential impact on AFL players and AFL staff required to move interstate," an AFL spokesman said last night.
In the case of the Western Force, the impact of the changes could be to make the already difficult task of luring players from the east coast to Perth nigh on impossible.
"We have 19 players out of our squad of 35 players, as well as a number of the coaching staff who are currently in the LAFHA system," Force chief executive Vern Reid said yesterday.
"I know in one case the overall benefit is approximately $30,000 a year, while for an extended playing squad player making $40,000 a year, $4200 of that comes from the allowance."
At present, players and coaches are allowed to claim the allowance for two years, after which they are considered by the Australian Taxation Office to have effectively moved home.
"Clearly we believe we already are at a disadvantage when it comes to recruiting and this is going to add to our difficulties. Agents will factor in what a player would have received under the allowance and then suggest that someone is going to need to make up that shortfall," Reid said.
Rugby Union Players Association boss Greg Harris said the allowance changes fed into the bigger picture of the inequitable economic basis on which Australia's Super Rugby franchises operated, with Queensland and NSW not having the same difficulties facing the Force, the Melbourne Rebels and the ACT Brumbies.
"RUPA is looking into the problem but unfortunately that's a cost of business consideration for the WA club and the Australian Rugby Union needs to take that into account in making its grant allocations to the franchises," Harris said.
Rebels chief executive Steve Boland said the club was sufficiently concerned by the allowance changes that it had made a presentation to its players yesterday, explaining how it would affect them.
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