Time to abolish remote tax breaks

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The Productivity Commission (PC) is reviewing the tax breaks that are available to individuals and employers in remote parts of Australia, and it is preparing a final report on the issue.

The zone tax offset (ZTO) and remote area tax concessions were introduced in the 1940s and have remained largely unchanged. Two-thirds of those currently claiming the concessions live in the four biggest regional cities in northern Australia – Townsville, Darwin, Cairns and Mackay – calling into question whether the concessions are still needed.

Liberal senator Dean Smith says the concessions need to be modernised in order to encourage population growth and provide economic stimulus in northern Australia. From The AFR:

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.