A PRODUCTIVITY Commission Report is recommending abolishing zone tax offsets for remote and regional Australia.
The shock report was highly critical of the offsets and also took aim at fringe benefits tax concessions for employers in remote areas which apply to fuel, accommodation and food provided to employees.
However, Queensland Senator Susan McDonald said the report showed a breathtaking lack of understanding of life outside metropolitan areas.
"The report acknowledges the challenges of living and doing business in the regions, but then dismisses the measures in place to offset those challenges," Senator McDonald said.
"Rather than abolish the offsets, we should be enhancing them. The report states current tax policy doesn't do much to attract people to live in regional Australia, but rather than suggesting measures such as raising the concession or cutting fuel excise, it simply recommends cutting it completely.
"Try explaining to a small business owner that the Productivity Commission believes higher wages, not tax breaks, can offset higher costs of living. Can a cafe in a town of 1000 people suddenly increase revenue to pay workers more? Or should the owner take a pay cut?
"The Fringe Benefits Tax concessions are crucial for businesses in remote and rural Australia who provide accommodation to employees as part of their salary packages. Without these concessions, small Outback businesses will not be able to attract workers."
In Queensland Zone A is limited to Camooweal, Cloncurry and Mount Isa. Zone B applies to 32 locales including Atherton, Ayr, Charleville, Longreach, Townsville and Winton.
The offests run from $133 to $1146, depending on which zone a person or business in located.
Senator McDonald said the report was short-sighted and ignorant of the realities of living outside metro cities.
"It shows a very worrying willingness by bureaucrats to put the regions in the too hard basket," she said.
"The only redeeming quality of this report is that it merely contains recommendations, which I'm glad to say the Morrison government isn't bound to implement."
