Download PDFHouse: House of Representatives Presented by: Mr P. A. Filing M.P. Purpose To extend the areas within which a person may qualify for a tax rebate as a resident of an isolated area.
Background A tax rebate is provided under section 79A of the Income Tax Assessment Act 1936 (the Principal Act) to residents of isolated areas. The rebate is provided because of the uncongenial climatic conditions, isolation and high cost of living in such areas. The areas that qualify for rebate are defined in the Principal Act as `the prescribed area'. The prescribed area comprises two zones, Zone A and Zone B. The geographical position of each of these zones are described as `special areas' and residents within these areas are entitled to a higher tax rebate. The areas covered by Zones A and B are mainly in the west, north and centre of Australia. In addition, Zone A includes Macquarie Island, Norfolk Island, Cocos (Keeling) Island, Heard and McDonald Island, Lord Howe Island and the Australian Antarctic Territory. Zone B includes islands forming part of Australia adjacent to the coastline of those portions of the mainland and Tasmania included in Zone B. King Island and the Furneaux Group of islands are included in Zone B.
To qualify as a resident of a zone area and thus be eligible for the rebate, a person has to satisfy a number of residence conditions, including that he/she resided in the zone area, not necessarily continuously, for more than half of a financial year. The zone rebate comprises a basic amount plus a percentage of the `relevant rebate amount'. Basically, the `relevant rebate amount' is the sum of the rebates to which a person is entitled during a financial year for a dependant or housekeeper, or as a sole parent, as well as any rebates to which the person would have been entitled if rebates were allowable for dependent children and students. Rebate levels for the year 1991- 92 are:
1 Residents of a special area in Zone A or Zone B: $938 + 50% of the relevant rebate amount.
2 Residents of Zone A who are not residents of nor have actually been in a special area of either Zone A or Zone B: $270 + 50% of the relevant rebate amount.
3 Residents of Zone B who have neither resided nor been in Zone A nor a special area in Zone B: $45 + 20% of the relevant rebate amount.
4 In other cases the rebate is allowable on the basis of the amount considered by the Commissioner to be reasonable in the circumstances. 1
The amendments proposed by this Bill are intended to correct a perceived anomaly in the scope of the rebate. As stated in the Second Reading Speech to this Bill, the rebate currently ceases at Australia's shore line or the shore line of an off- shore island. One effect of this limitation has been to exclude persons on oil rigs, oil and gas platforms and fishing boats, in seas off the shore of either Zone A or B, from being eligible for the rebate.
Main Provisions The areas that constitute Zone's A and B will be extended out to the continental shelf by clause 3.
Remarks It has been noted by certain commentators that section 79A of the Principal Act is a discriminatory relief provision and may be in contravention of section 51(ii) of the Constitution. This has yet to be tested in a court of law.
References 1. Deuthsch, Gates, Gibson, Hanley Payne, Australian Tax Handbook 1992, Butterworths, 1992, p. 506.
Bills Digest Service 21 August 1992 Parliamentary Research Service
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Commonwealth of Australia 1992.
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Published by the Department of the Parliamentary Library, 1992.