Last week the Productivity Commission released its report entitled Remote Area Tax Concessions and Payments, which considered the benefits and costs of tax concessions made to remote areas like ours.
There are three long standing tax concessions and payments targeted to residents and businesses in remote and regional areas. These are the zone tax offset, the remote area allowance and certain fringe benefits tax concessions.
The report recommended scrapping the zone tax offset and making significant changes to the remote area allowance and remote area concessions for fringe benefits tax.
While Council welcomed the review of remote area tax concessions and payments, we lobbied against any proposed changes that would negatively impact regional communities like ours. The City made a submission to the commission back in October 2019 to outline our position. We weren’t alone – the commission received nearly 200 submissions on the matter.
As you would be aware, living in remote areas involves a higher cost of living. Tax concessions and allowances help compensate for these higher costs.
If the commission’s recommendations had been implemented, they would have had a significant financial impact on businesses and residents within the City of Karratha and exacerbate existing challenges attracting and retaining employees.
In particular, retaining the fringe benefits tax for FIFO workforces would have further encouraged the use of FIFO instead of residential workforces. Council has worked hard to enhance the liveability of our towns to encourage people to live and work locally to reduce dependency on operational FIFO workforces over the past few years.
We’re pleased the Federal Government immediately rejected the commission’s recommendations. In dismissing the recommendations, the Federal Government said it was “committed to supporting the growth of regional areas and their success into the future”.
Rest assured, Council will continue to lobby for changes that benefit regional communities and address inequalities between metro and remote areas.