North Queensland Senator Ian Macdonald has called for a comprehensive review of the Zone Tax Rebate system that currently operates in remote Australia.

“The higher effective cost of living in remote Australia due to lack of services and tyranny of distance must of course be recognised and mitigated,” Senator Macdonald said.

“But an in-depth review must consider the administration of the rebate in a manner that is both equitable and, where possible, revenue-neutral.

“In Darwin, which is Zone A, a single person with no dependants and no other offsets who resided in the Zone for the full tax year will receive a Zone tax Rebate of $338 for the year.

“In Cairns and Townsville, which are in Zone B, the same person will receive $57.

“The question we need to be asking is whether the provisions put in place in the 1945 amendments to the Income Tax Assessment Act - amendments that provide what are today very small rebates in what are now sophisticated major regional centres - remain relevant and proper today.”

The Senator also flagged amendments to the Resident Test that is used to establish eligibility criteria for the Special Areas in Zone A and Zone B.

“We have a large fly-in fly-out workforce in the North who are benefiting from the rebate without contributing in an effective way to the development of local communities.

“We need to clarify the criteria to ensure that the taxpayers’ dollar is being spent in the most productive way in remote and Northern Australia – fostering communities and development that will in turn benefit the nation.”