‘Clumsy’ regional tax plan slammed
A SHOCK new tax proposal would see regional Queenslanders slugged $320 or more each year, depending where they live, and make it harder to attracted teachers, police and other emergency workers to remote areas.
The Productivity Commission is recommending a major overhaul of regional tax concessions meant to balance out the higher cost of living and difficulties of living remotely.
It would save the Federal Government $150 million, but see people in the regions forking out more money at tax time.
Townsville, Mackay and Cairns residents would be hardest hit under proposals in the final report from the Productivity Commission.
The average offset claim is $319 a year, though varies from $133 to $1146, depending on what zone a person lives in.
LNP Senator Susan McDonald has blasted the report as "clumsy, dangerous, un-Australia" and a risk to the national economy.
"It offers no solutions … Every person in every city in Australia should be concerned. It reduces productivity in the regions, which flows on to the cities," she said.
"Removal of fringe benefits tax means regional businesses will close, they will no longer have a profit margin."
There are almost 200,000 people living in Cairns, Townsville, Mackay and Darwin who access the Zonal Tax Offset, which is proposed to be scrapped.
"Nearly half of the claimants live in Townsville, Cairns, Darwin or Mackay, which are now well-developed and connected cities. Their residents can no longer be considered isolated," the report stated.
It is instead calling for ZTO to be scrapped entirely, or limited to "very remote areas" only, based on the Australian Bureau of Statistics definition.
This would see places like Mount Isa, Normanton and Karumba still able to claim it at a special rate of $1173.
It also argues Fringe Benefits Tax arrangements for employers are "too generous" and want it reduced or removed.
It would see tax exemptions for employer provided accommodation reduced to a 50 per cent concession, and a removal of partial concessions for employee-sourced housing.
In a submissions to the report, Queensland Police Union boss Ian Leavers said regionally posted officers were offered discounted accommodation and warned it would be harder to attract staff without the FBT concession.
Royal Flying Doctor Service state chief financial officer Greg O'Toole said the organisation used the FBT concession to attract staff to their Mt Isa and Charleville bases, while Queensland Catholic Education warned it would have "significant impact on the ability of Catholic schools employers to attract and retain teachers".
Senator McDonald regional Queenslanders already had higher costs for insurance, electricity and wages.
"I just can't believe the Productivity Commission is so deaf to regional issues. The timing of this report is extraordinary," she said.
The Federal Government has yet to respond to the report, publicly released this morning.
Senator McDonald said she was confident the Treasurer would not adopt the recommendations.