Budget move rights a wrong
In the 2015 Budget it was announced from 1 July 2015 the tax zone offset will only be available to genuine individuals living in remote and regional Australia.
This is a very important change and something I know many of you will be thankful for.
I know it’s important for Goldfields residents to be recognised as genuinely living remote.
The zone tax offset was introduced in 1945 in recognition of the disadvantages of residing in remote parts of Australia.
In particular, the isolation and the high cost of living associated with living regionally.
For too long Perth residents involved in ‘fly-in-fly-out’ and ‘drive-in-drive-out’ roles have had access to this allowance.
In the 2012-13 income year, more than half a million Australian residents (with taxable income) claimed zone tax offset of $284.3 million. It is estimated that around 20 per cent of all claimants do not actually live full-time in the zones.
While this allowance is only small for Goldfields residents, it does recognise the high costs of living in regional WA.
FIFO workers do not face the same challenges of remote living that the zone tax offset was designed to address as their genuine place of residence is elsewhere.
FIFO workers don’t have any additional costs; most of them live on the coast, they eat at the work mess, they are not buying bread and milk at the local shop and paying for the increased freight costs.
In fact they do not spend one cent in the region they work.
The old system was rewarding people in circumstances where they are actually not spending any money in the area, this has now changed.
On top being of righting a wrong, this budget measure will gain revenue of approximately $110 million a year, starting from the 2016–17 accounting year.
I would like to see further reform on the zone tax offset including for the offsets to be increased. I’ll be advocating for changes to the zone tax offset to be included in the taxation white paper discussion.
People living in rural and remote areas do not have access to the same level of publically funded services as metropolitan areas and they pay substantially more for the services that are available. Why not increase the zone tax offset to compensate further for that?
Rick Wilson MP
Federal Member for O’Connor