Zoning in on tax boost for regions

A TAX rebate aimed at enticing people to move to the bush and keeping them there will be overhauled by the Morrison Government in a bid to bolster regional centres.

Northern Australia Minister Matt Canavan said the current system was not working. Picture: AAP Image/Mick Tsikas
Northern Australia Minister Matt Canavan said the current system was not working. Picture: AAP Image/Mick Tsikas

Hundreds of thousands of Queenslanders get a tax offset of between $58 and $1173 each year based on where they live but many are not aware of the incentive.

It costs taxpayers about $150 million a year, with a view that the money could be spent better on encouraging people to move to the regions.

It could also work hand in glove with a new migration policy.

Sparked by concerns the zonal tax offset is no longer working, Treasurer Josh Frydenberg has asked the Productivity Commission to undertake a wholesale review of concessions for living in regional and remote areas throughout Australia, as the Nationals believe a recalibrated zonal tax scheme could encourage more people to move to the regions.

The rebate is for people living in Australia's most regional and remote areas, but most who are eligible live in Queensland.

Northern Australia Minister Matt Canavan said the current system was not working.

"This has been an issue for some time but the Government has decided it is time to have a proper review of the zone tax rebate,'' he said.

"The current system was built in the mid-1940s. It was literally described as a subsidy scheme to encourage people to live in uncongenial parts of the country.

"It's left over from our British heritage when living in the tropics was seen as some kind of prison sentence. Of course that is far from the case.

"So today the good people of Cairns and Townsville get $58 a year because they live in a tropical climate and that hasn't been increased since the early 1980s.

"If you do know you're getting it, I don't think anyone is moving to Cairns or Townsville for a slab of beer a year."

The Productivity Commission will start its review in February and report to the government within 12 months. It will also examine the effectiveness of fringe benefit tax remote area concessions.