A host of work-related tax deductions claimed by individuals every year and cost tens of billions of dollars could be scrapped and replaced with low personal tax rates, according to submissions from Treasury and business groups to a Turnbull government inquiry. 
In a bid to address bracket creep - where wage inflation pushes people up into higher tax brackets - Treasurer Scott Morrison has said the government will consider introducing personal tax cuts as part of its upcoming tax review.
Australian Taxation Office statistics show that in 2012-13, total deductions of $31.3 billion were claimed by personal taxpayers against $704 billion in taxable income.
Work-related expenses comprised nearly two thirds of total deductions claimed and totalled $19.7 billion. The most common type of work-related expense was for car expenses totalling $8 billion, followed by 'other' (including home office costs and tools) of about $7 billion, work-related travel expenses of about $2 billion, uniform costs totalling $1.6 billion and work-related self-education costs amounting to $1.1 billion.
The next biggest deductions in 2012-13 that people made were for personal superannuation contributions of $2.9 billion and managing tax affairs and charitable gifts/donations each comprising about $2.3 billion.
Treasury's submission to the House Standing Committee on Economics inquiry notes that "deductions can provide tax planning opportunities for some individuals" some of whom "may attempt to push the boundaries by increasing the value of their deductions".
It states that "deductions also provide a greater benefit for higher income earners, as they reduce the tax payable by marginal tax rates".
A number of OECD countries have tighter rules for work-related expenses, while New Zealand does not allow any such deductions.
Chartered Accountants ANZ submission to the inquiry says there is merit in removing deduction entitlements in exchange for lower rates of personal taxation.
"These personal tax rate cuts would need to be sufficient to wean Australians off the sense of entitlement that now exists towards work deductions and tax refunds," the submission said.
Chartered Accountants ANZ national tax leader Michael Croker said there may be a case for more employers to offer deductions for items such as work uniforms as part of the employment.
But the Australian Chamber of Commerce and Industry's senior manager, economics and industry policy Tim Hicks said any substantial change to deductions would be premature without evidence to suggest that a significant proportion of such deductions are being inappropriately claimed.