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Inquiry unto the income tax zone allowances



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RESS NO. 125 TREASURER EMBARGO IMMEDIATE RELEASE

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

INQUIRY INTO THE INCOME TAX ZONE ALLOWANCES

I announced in the i 980-81 Budget Speech that the Government had decided to conduct

a public inquiry into the present system of income tax zone allowances.

This decision was taken against the background that, while the zone allowances are

given in recognition of disadvantages on account of adverse climatic conditions,

isolation and living costs experienced by people living and working in our more

remote areas, the amounts of basic allowance have remained largely unchanged since

1958. The supplementary component of the allowance has, of course, increased in

·â–  ' r ' · value as dependants1 allowances have increased.

Economic growth and development in the more remote areas is steadily increasing and

there are many exciting projects in prospect. These developments could be inhibited

by problems in attracting and retaining the personnel needed to man them. More

generally, the Government is aware of the need to assist persons living and working

in these areas in meeting the particular problems which they face. Zone allowances

have so far provided one channel for providing such assistance and the inquiry will

be looking at the continuing role of the allowances in that regard.

The inquiry will have broad terms of reference, embracing not only the amounts of

the allowances but also the areas to which they might apply (including areas off­

shore and altogether outside Australia) and establishing ways for their continuing

review. The terms of reference are attached.

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The inquiry will be chaired by Mr P.C.E. Cox, a former President of the Institute

of Chartered Accountants in Australia, and will include Professor A. Mc3. Kerr, Deputy

Vice-Chancellor of Murdoch University, and Mr George Slater, General Secretary of

the Australian Post and Telecommunications Union. Provision also has been made .

for a fourth member with an extensive background in primary industry. .

I expect the inquiry to commence its task very shortly. It is our intention that

the report of the inquiry be with the Government in time for it to be considered

in the context of the 1981-82 Budget.

The inquiry will be making its own arrangements for the collection of evidence and

will be announcing those arrangements as soon as practicable. .

.18 September 1980. C a n b e r r a A C T

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ATTACHMENT

TERMS OP REFERENCE OP INQUIRY INTO INCOME TAX ZONE ALLOWANCES

In view of the fact that the value of zone, allowances for taxation

purposes has not been altered for a number of years and having regard

to the Government's policy of providing appropriate support to people

living in remote localities, the Inquiry is asked to:

(1) examine in detail, the problems of living and working in remote

areas and the provision of an appropriate measure of relief

from such problems through the taxation system by way of income

tax zone allowances; .

(2) make recommendations as to the appropriate levels of zone

allowances and in doing so suggest;

(a) specific zone boundaries and eligibility tests, having

regard to such criteria as isolation, uncongenial climatic

conditions and high costs;

(b) arrangements for future reviews and adjustments of the

boundaries and allowances;

(c) the future treatment, in relation to the zone allowance

provisions, of those areas lying outside Australia to which

the provisions now apply, and of the continental shelf.

regard, in carrying put the Inquiry, to;

other relevant expenditures, activities and legislation of

the Commonwealth, State and local governments (including

exemption Item 119D of the First Schedule to the Sales Tax

(Exemptions and Classifications) Act; and

technical developments bearing upon economic and living

conditions in remote areas.

($) have

(a)

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