Mackay and regions slugged in Federal tax plan
A SHOCK recommendation to scrap the zonal tax offset has been labelled a "slap in the face" for Mackay residents.
The proposed changes to tax concessions could save the Federal Government $150 million but slash $320 from the tax returns of locals if adopted.
Not only would the ZTO be removed, but the fringe benefits tax that gives concessions to employers who provide things like fuel, accommodation and food to their employees, would also be removed or reduced.
Mackay mayor Greg Williamson has labelled the recommendations, released in a Productivity Commission report, "money grab" and a "slap in the face".
He said the Federal Government should introduce more incentives to attract professionals to regional areas, rather than take them away.
"This is another kick in the guts for regional Queenslanders," Cr Williamson said.
"To say that we are not regional enough for the ZTO is just a furphy.
"We are trying to attract professionals from urban areas to come north and be part of the growth here, we need those extra incentives to do that.
"This is just big city Australia talking again."
Townsville, Cairns and Mackay residents would be hardest hit under the proposals.
The average ZTO claim is $319 a year but it varies from $133 to $1146 depending on what zone a person lives in.
The ZTO was originally introduced to balance out the higher cost of living and difficulties living remotely.
But the Productivity Commission has claimed Mackay is no longer isolated enough to be considered eligible.
"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.
Cr Williamson called the suggestion "ludicrous", saying the price of fuel and the cost to build a house in the region was well above that of Brisbane.
He said the trickle down effect of slashing the fringe benefit would also be hugely detrimental to the region, particularly as it was not always possible to fill job positions with locals.
Mackay Chamber of Commerce vice president Simon Vigliante said to abolish a tax concession would add to the increasing strain on regional economies.
He rejected the claim regional towns like Mackay were no longer as isolated as they once were.
"That was clearly written by a public servant living in a capital city with access to reliable internet and other benefits of economies of scale, presented by large populations, such as good public transport."
Mr Vigliante said the Productivity Commission had conveniently forgotten about existing residents with their suggestion that the ZTO did not encourage people to move to regional areas.
"Tax reform that simplifies our current convoluted system is always welcome, though it must increase the liveability of regional areas, not decrease," he said.
Federal Member for Dawson George Christensen said he strongly opposed the removal of the zonal tax rebate.
He said if anything, it should be increased.
"I will oppose any move to take away the zonal tax rebate for the Mackay region," Mr Christensen said.
"If anything it should either be increased for regional communities to encourage people to move to the regions, or increased and packaged up as some sort of additional infrastructure spend for the region but it should not be removed."
The Remote Area Tax Concessions and Payments report was released on February 26.