Coalition considering changes to zonal tax system

Peter Dutton says the Coalition is looking at ways to provide tax breaks in regional areas.

Opposition Leader Peter Dutton chats to spectators at the Mount Isa Mines Rodeo on Friday. Picture: Getty Images

The Coalition is considering how to implement tax breaks in ­regional areas to provide cost-of-living relief.

Peter Dutton on Friday said there was a “moral argument” to be made that taxation arrangements could be made to help people living in regional areas given the impact of renewable energy projects on rural communities.

Speaking in Mount Isa alongside local MP and Katter’s Australian Party leader Bob Katter, who has previously spoken in favour of zonal tax arrangements, the Opposition Leader said the idea was being considered but did not offer any detail about how it could be implemented.

“We’re happy to have a look at taxation arrangements,” Mr Dutton. “There are constitutional restrictions and I’ve looked at different ways in which we can provide support.

“I think some of that … needs to be tested.”

Already the Australian Taxation Office applies a zone tax offset on income tax for about 480,000 residents within specified remote or isolated areas, ­delivering a deduction of up to $1173.

Support for zonal taxation reform is particularly strong within the National Party, which has previously advocated for companies in regional areas to be given tax breaks to lure businesses outside of the capital cities.

Some members of the ­National Party have called for tax reform to entice businesses to regional areas. Mr Dutton said the need for reform was driven by cost-of-living pressures.

“There are arguments for people who live in regional towns where you’re paying more for petrol, you’re paying more for your electricity, paying more for housing – there’s an additional cost that comes with it and you’re producing, in many cases, royalties and company tax that go to benefit people in capital cities,” Mr Dutton said.