Case V111

Members:
PM Roach SM

Tribunal:
Administrative Appeals Tribunal

Decision date: 1 July 1988.

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P.M. Roach (Senior Member)

The applicant in this reference is a husband and father. He migrated to this country in 1981. Although university educated in his homeland and an experienced primary school teacher there, as a stranger to Australian culture and the English language he has been unable to continue his career in Australia. Like many of his fellows who have migrated to this country, he established his family in residence in suburban Sydney and then looked for employment opportunities which would enable him to support his wife and four children - one at least being Australian-born. In devoting himself to the welfare of his family as he did, he followed in the footsteps of many other men who have migrated from many other lands during two centuries.

2. He found an opportunity to work in private enterprise as a labourer at a power station well distant from his home. Furthermore, he found in that employment an opportunity to work long hours and, during the year of income ended 30 June 1985, six days per week. As a result he has worked from 7.00 a.m. to 8.00 p.m. Monday to Friday and from 7.00 a.m. to 3.00 p.m. on Saturdays. By doing so he was able to generate a gross income of $31,974.

3. To make possible those hours of work and the income generated by them, he had to surrender the advantages of residing with his family in Sydney and avail himself of the accommodation made available through his employer. Because of the remoteness of the power station site from the homes of many of the workers engaged there, the employer provided single-room accommodation and dining facilities free of charge at a point some 23 kilometres from the work site. Those facilities were available free of charge to workers who did not reside locally. The applicant availed himself of those facilities. His belief was that it was not possible for him to secure accommodation locally for his family, partly because of the limited opportunities to do so and partly because of the excessive costs which would be involved should such accommodation come to be available.

4. The consequences of these arrangements were that at approximately 3.00 a.m. on a Monday morning he would leave his family home and travel alone by private vehicle directly to the work site, only to undertake the return journey commencing at 3.00 p.m. on the following Saturday. During the week, following the close of work at 8.00 p.m., he would travel the 23 kilometres to the camp and then return to ``bundy on'' by 7.00 a.m. On all of those journeys he ordinarily travelled alone in his own car, rarely providing transport for others and never accepting a ride with others. The distance between his home in suburban Sydney and the power site/camp site was estimated at 400 kilometres, but in view of what has been agreed as to quantum it is unnecessary to make a more precise finding.

5. As an employee he was rewarded in accordance with arrangements negotiated between his union and his employer. Those arrangements included the provision of tool allowances (in addition to salary) and a travelling allowance (included in salary). The tool allowance was returned as assessable income and a deduction in the same sum claimed on the basis that the allowance had been ``wholly expended''. That claim is not in contention. The travelling allowance, which was paid on a daily basis seemingly without regard to distance travelled or expense incurred, amounted to $1,903 during the year in question. It was included in his group certificate as ``salary'' and in due course was returned in his income tax return as part of total salary derived. However, he claimed a deduction for travelling expenses in the sum of $1,903. That claim was disallowed by the Commissioner.

6. I am satisfied that the applicant, and his accountant who has endeavoured to assist the applicant and many of his fellows in relation to this problem, believed that he was entitled to the deduction for travelling expenses which had been sought and that they believed so because the employer in a letter dated 30 June 1985 directed to all employees had said:

``To whom it may concern

Subject: Group Certificates - Taxation Allowances

Employees working on... power station sites

This letter serves to furnish all interested parties dealing with the Group Certificate in question that the following information:

In accordance to [sic] an agreement entered into by the Australian Taxation Department

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ATC 714

and Metal Trades Industry Unions, the following allowances are deductible for taxation purposes.''

There followed reference to file numbers and the allowances (including ``excess fares and travelling'') allowances. No evidence was presented before me to establish that any such agreement had in fact been reached or as to what its terms were. I simply observe that it may be that the expression of belief on the part of the employer had a similar factual basis to that described in the decisions in Case U29,
87 ATC 229, and another case yet to be mentioned. I also note that the making of an agreement in those terms, even though made with the Commissioner, cannot determine the question of deductibility. The Commissioner cannot alter the law, or bind himself not to enforce the law. There can be ``no estoppel against the Commissioner''.

7. Having said all of those things the fact remains that the assessment of the Commissioner is correct and it must be upheld.

8. In
Lunney v. F.C. of T.; Hayley v. F.C. of T. (1958) 100 C.L.R. 478 a Full Bench of the High Court of Australia held that the expenses of travelling from home to work and from work to home are not ordinarily allowable as deductions. I have recently commented on a similar problem in NT 87/6308 (handed down this day) [reported as Case V103,
88 ATC 664] Accordingly, I do not now repeat what I then said. Instead I will have a copy of that decision provided for the applicant and his accountant. Having made provision in that regard it should suffice to merely observe that nothing in High Court decisions turns on the significance of the length of distance travelled (even 400 kilometres each way) or the frequency of such travel (once per week each way). Although the High Court accepted that incurring the expense was a necessary prerequisite to the earning of income, it none the less held that the expenses of getting to and from work were not expenses incurred ``in the course of'' deriving income by working.

9. As to the matter of the tax treatment of travelling allowances, it should also be sufficient to refer the same reasons for decision. For the reasons there stated the applicant is not entitled to deductions equal to the allowances received only because the allowances were described in an industrial award context as ``travelling allowances'', or as allowances of any other kind.

10. Accordingly, I direct that the determination of the Commissioner upon the objection under review be upheld.