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Townsville tax payers no longer remote; Productivity Commission Report

Townsville tax payers connected like city residents

North Queensland and Townsville tax payers are being targeted by the Productivity Commission in its draft report on Remote Area Tax Concessions and Payments, that the zonal tax concessions should be abolished.

The Productivity Commissioner, Jonathon Coppel said businesses and individuals receiving tax concessions and payments in remote areas is poorly designed, inequitable and outdated.

Townsville leaders in unanimous rebuttal of Commission

Marie Claude-Brown, CEO of the Townsville Chamber of Commerce wrote directly to the Productivity Commissioner. Instead in a measured rebuttal of the Productivity Commissioner’s findings to abolish the Zonal Tax Offset,  the Townsville Chamber CEO suggested an increase in tax concessions for regional areas would be more prudent.

“The original intent of the concessions remains as true today as when it was first set up – to incentivise those living in remote areas to stay, who further encourage those considering living in remote areas to relocate,” Ms Claude-Brown stated.

“However, the incentive created by the current rates is negligible. If the aim of the concession remains to be that of an incentive, we urge the Commission to consider higher rates.”

“By itself, the concessions may not be a significant influencer, but combined with the employment opportunities of current projects proposal could amount to further incentive.

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“Northern Queensland is preparing itself for an increase in infrastructure projects, such as those supported by the Northern Australia Infrastructure Fund, the Australia-Singapore Defence Initiative and Hells Gates projects.”

“A review of zonal taxation could add up to the proposal of long-term employment and added job benefits and make relocation more attractive.”

“Incentivising southern skilled workers to relocate to North Queensland is a significant challenge for local employers. Further incentive like appropriate zonal tax concessions add to the benefits of relocation.”

Productivity Commission recommendations

In its recommendations, the Productivity Commission said “Technological advances have helped lessen the hardships of life in remote parts of Australia. Some areas once considered isolated, such as Cairns and Darwin which are now home to international airports and populations exceeding 100,000 people, can no longer reasonably be considered remote.”

A statement from the commission says remote Australia has changed considerably since the ZTO was introduced in 1945. 

“Some eligible areas, like Cairns, Townsville and Darwin , are no longer remote. And the ZTO has little influence on where people live or work,” it says. The report says the zones where people could claim the offset are “outdated” and mostly had not changed since the 1940s. 

“Against a backdrop of significant transformation in remote Australia, some areas covered by the zone tax offset are clearly no longer ‘isolated’ ,” it says. 

“In particular, many coastal areas have developed considerably since the 1940s. Cairns and Darwin each have international airports and populations of more than 130,000 people. 

“These places, along with Townsville (population of almost 180,000) and Mackay (nearly 80,000), are regional cities in their own right, with easy access to key services and well-developed retail markets, and are well-connected to other capital cities.”

Civic leaders fight against supply-chain remoteness and high costs 

However, the Chamber of Commerce CEO said “Queensland’s economic strengths in resources, construction, agriculture and tourism are concentrated in the city’s local economy, with the addition of Defence industries, health and education services. It has also made of Townsville a commercial and administrative regional centre.”

“The current tax concession for Australian regions like ours were originally based on the 1983 Australian Population Census data. The current rate of $57 has been unchanged since the mid-1990’s.

Queensland taxation changes stifling property industry confidence: Property Council

Commenting most recently to News Corp. Ms Claude-Brown said, “We have been screaming since the ’80s that it doesn’t work but to abolish it completely doesn’t respond to the concerns (like those) the Townsville Chamber has.

“It’s not working, therefore there needs to be a reform, not a plan to get rid of it altogether.” 

Ms Claude-Brown said Townsville might not be classed as a remote place, but it was still regional and disadvantaged in some ways compared with bigger cities. 

“Saying we’re no longer remote and we’re not disadvantage is not true. We are disadvantaged,” she said. 

The zonal tax is worth about $57 on an annual tax return which would remove about $6 million from the Townsville economy.

Townsville City Council Mayor Jenny Hill also wrote to the Productivity Commission and strongly suggested the ZTO be retained and increased to counter the high insurance premiums.

The Townsville Mayor also suggested that if the ZTO is abolished that the government step up with some assistance to address the increasing cost of living in North Queensland.

A final report to the Government is due by February next year.

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Aaron M, Editior
Aaron is the founder and editor of TREN eMagazine with 15 years experience in the real estate industry investing and helping investors seek value, leverage value and capitalise on value, developing professional and technical skills and capabilities that have enabled his success in business from startups, adoption, asset growth, management and community leadership projects. Aaron also loves travelling, sports, his partner Jodie and helping people discover their "why" and find their few "what's" in life that realise the "wows. The " www" in www.townsvillerealestatenews.com.au is one of his why, what and wow's that strive to add valuable content and analysis for readers to participate and win.
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