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Monday, 22 September 2014
Page: 9889

Northern Australia: Zone allowance

Dear Dr Jensen

Thank you for your letter of 27 May 2014 concerning a petition to increase the amount of the zone tax offset. I am responding to you in my capacity as the Acting Assistant Treasurer. I sincerely apologise for the delay in responding to you.

While the base amounts of the zone tax offset are not indexed and have not increased since 1993, I note that the amounts of some of the dependency tax offsets (that an eligible taxpayer may claim as part of their zone tax offset) are indexed to the Consumer Price Index. As a result, the maximum amount of zone tax offset for taxpayers with certain dependants has increased over time.

As you may already be aware, the Government will produce a White Paper on Developing Northern Australia, which is due to be released later this year. As part of this process, the White Paper will look at determining what the right tax policy settings are to create incentives for business to invest, innovate and employ in the north. This will include looking closely at the specific elements of the tax system that impact northern Australia, such as the zone tax offset.

On 10 June 2014, the Government released the Green Paper on Developing Northern Australia. The zone tax offset is mentioned on page 55 of this report in the context of improving the tax system. The Green Paper, along with submissions received, will inform the White Paper on Developing Northern Australia. The Green Paper can be viewed on the Department of the Prime Minister and Cabinet's website at:

I trust this information will be of assistance to you.

From the Assistant Treasurer, Senator Cormann