Imagine being paid to live here — and then finding...

Imagine being paid to live here — and then finding out you may be about to get more

Updated December 07, 2018 17:02:53

Where you live could be worth more than $1,000 a year extra to you and, depending on the outcome of a government review, you could be about to get more.

The payments, called the Zone Tax Offset, go to people living in some regional and remote parts of the country and range in value from between $57 and $1,173.

The offset was introduced in the 1940s to encourage people to move to "uncongenial" areas, such as Cairns.

However, Queensland Senator and Minister for Northern Australia, Matt Canavan said it was no longer working as it was intended.

"It hasn't increased now for more than 25 years," Senator Canavan said.

"When it was introduced in the mid-1940s it was 20 pounds for Zone B — for the most populous areas — and today it's 57 bucks.

"So it has barely increased in even nominal terms.

"Obviously in real terms, that amount would need to be hundreds of dollars now to have kept up with inflation."

Offset could attract residents to outback towns

In fact, according to the Reserve Bank of Australia's pre-decimal inflation calculator, the Zone B offset would today be worth more than $1,400 a year.

That is something catching the attention of Gavin Baskett, mayor of the outback Queensland town of Winton.

He said the offset could make a big difference to his town's efforts to encourage people to move there.

"One of the issues out in the west is the declining population," he said.

"We're constantly racking our brains trying to figure out ways to stop the slide in the population and then also start to increase it again.

"Something like this would go a long way towards people either wanting to stay in Winton or maybe moving to Winton."

Cr Baskett said as things stand, many residents of the town would be barely aware of the offset.

He said they would certainly not be aware their payment for living in a remote community is currently the same as for more populous and better-resourced communities such as Cairns and Townsville.

Zone A, Zone B and special zones

The zone offset is divided into three categories.

People living in Zone A, which includes places like Mount Isa and Cloncurry in Queensland, Darwin and Alice Springs in the Northern Territory, and Broome and Port Hedland in Western Australia, get $338 back with their tax return each year.

Those in Zone B get $57 back each year.

That zone covers large parts of western and northern Queensland, along with places like Kalgoorlie and Esperance in WA, Broken Hill and Lightning Ridge in NSW, Woomera in South Australia, and Queenstown and Rosebery in Tasmania.

Then there 'special areas' within those two zones, such as Boulia in Queensland, Halls Creek in WA, Jabiru in the NT, Coober Pedy in SA, King Island off Tasmania, and islands such as Norfolk and Lord Howe.

Those residents get $1,137 each year under the offset.

Ironically, two hours down the road from Cr Baskett's place at Winton — or 153 kilometres away — the residents of Stamford are in a special zone and receive $1,173 per year.

Cost of current program may limit changes

Senator Canavan said the Federal Government had referred the Zone Tax Offset to the Productivity Commission for review.

"I think in those remote areas [the offset] can be very important — or it would be if it was well designed," he said.

That said, the program's current cost of $150 million per year could put limits on how much it could be reformed.

Senator Canavan said he expected the Productivity Commission's review of the offset would take about a year and could involve consultation hearings in some of the communities that receive the offset.

Topics: community-development, community-and-society, government-and-politics, federal-government, tax, lord-howe-island-2898, charleville-4470, cairns-4870, townsville-4810, longreach-4730, winton-4735, stamford-4821, norfolk-island, king-island-7256, coober-pedy-5723, jabiru-0886, halls-creek-6770, boulia-4829, rosebery-7470, queenstown-7467, woomera-5720, lightning-ridge-2834, broken-hill-2880, esperance-6450, kalgoorlie-6430, port-hedland-6721, broome-6725, alice-springs-0870, darwin-0800, mount-isa-4825, cloncurry-4824, proserpine-4800, port-douglas-4871, maroochydore-4558

First posted December 07, 2018 15:29:16