Offsets need to be better

ONE wonders what was going through the minds of the authors of the latest Productivity Commission report.

The final report, of the study commissioned by Treasurer Josh Frydenberg in November 2018, was released yesterday morning.

Despite numerous submissions for the tax offset to remain the commission recommended cutting tax relief for people living and working in regional areas like North Queensland.

The Zonal Tax Offset average offset claim is $319 a year, although it varies from $133 to $1146, depending on what zone a person lives in.

Townsville, Cairns and Mackay would have been areas hardest hit with tens of millions of dollars taken from each local economy.

Thankfully LNP Senator Susan Mcdonald blasted the report as dangerous and un-australian.

“I just can’t believe the Productivity Commission is so deaf to regional issues,” she said.

Then Deputy Prime Minister Michael Mccormack got on the front foot and ruled out implementing the recommendations.

Ironically, one of the reasons the offset was first implemented was to help attract people to work in rural areas. But in the study the commission decided offsets were no longer working and their solution was to kill the incentive.

The reason why tax offsets are no longer working is one that needs further investigation. Could the reason be the offset needs to be more?

North Queensland is crying out for more skilled people with doctors, nurses, teachers and police officers hard to lure to the region. For these people an extra $300 to $1000 in incentives each year may not be enough.

More needs to be done to attract people to regional and remote areas to help economies grow.

This report is another example of how people in Canberra have little knowledge of issues facing regional Australia.