Labor's plan to limit tax advice deductions to $3000 will primarily impact blue ribbon Liberal electorates, analysis shows.
The policy, set forth by Bill Shorten as part of his budget reply speech, would see a Labor government limit the deduction which can be claimed for managing tax affairs to $3000.
It's aimed at stopping people using tax specialists to exploit loopholes in the tax system in an effort to limit the amount of tax they pay.
Mr Shorten said while he believed it was "only fair" to allow a deduction for accounting fees, he believed the system was inequitable.
"Loopholes that let millionaires buy their way out of paying tax mean middle class and working class people pay more," he said.
In a review of the policy, The Australia Institute found less than half of tax payers claimed a deduction for the management of their affairs, with the average claim of the 47 per cent who do, working out to under $380.
Matt Grudnoff, a senior economist with the left-leaning think tank, said on average, it was only very high-income earners – those earning more than $500,000 – who deducted more than $3000 for the management of their tax affairs.
Those high-income earners were most likely to be found in electorates close to the capital city, with Kelly O'Dwyer's seat of Higgins taking out the top spot in a list of 10 electorates spending the most on tax advice deductions, with an average of $2121 spent by tax payers.
Prime Minister Malcolm Turnbull's electorate of Wentworth was next, with an average of $1235, while Michael Danby's electorate of Melbourne Ports was the only Labor entry in the top 10, with an average of $1156 spent on advice.
Julie Bishop's seat of Curtin, former Prime Minister Tony Abbott's electorate of Warringah, Bradfield, North Sydney, Brisbane, Kooyong and Goldstein rounded out the top 10.
Mr Grudnoff said he hoped the policy would "discourage high-income individuals from pursuing aggressive tax minimisation" and it made economic sense to install a limit.
"The nature of our tax system is that if you have a considerable income you can spend large amounts to get tax advice that allows people to aggressively minimise the amount of tax they pay," he said.
"This tax advice is expensive and the tax data shows us that there is a small minority of very high-income earners that are doing this.
"From an economics point of view this is very inefficient and wasteful. Paying large amounts of money to very bright people with the sole objective of minimising the amount of tax you pay is not very productive."
The policy has slipped under the radar, with most attention still firmly fixed on the Turnbull government's proposed $6.2 billion levy on Australia's five major banks.The bankers' lobby immediately launched a campaign against the tax, while the banks have threatened any levy would have to be passed down to customers.
But Treasurer Scott Morrison, who has spent the week selling his budget, has refused to back down, and appears to be winning the PR war, with seniors' associations following the welfare sector in welcoming the measure.
"National Seniors' members understand what can happen in a federal budget," chief advocate Ian Henschke said.
"In January this year, more than 330,000 aged pensioners had their entitlements cut, with at least 100,000 losing all entitlements as a result of the 2015 budget.
"It seems only fair that large profit making organisations such as the banks contributed a bit more to funding hospitals, schools, transport and all the other services Australian communities need. We are aware this is likely to have a flow on effect to bank shareholders, borrowers, depositors and others, but we would encourage older Australians to shop around for the best deal if their bank passes on this new tax in increased fees."
The Association for Independent Retirees also professed to have no issue with the levy, while a Newspoll taken after the budget showed 68 per cent of people approved of the levy.
The banks, having signed non-disclosure agreements, were given the draft legislation to peruse last week. Mr Morrison is expected to introduce it into parliament in the next fortnight.