STATEMENTS BY SENATORS - Cost of Living


Senator IAN MACDONALD (Queensland) (13:41): Last week I drove from my home in Ayr to the sittings of parliament in Canberra, some 3,104 kilometres away. I did that because I like to get out to western Queensland as often as I can to let people in small communities out there know that politicians do care and that we're prepared to get to their place of living in the way they do—driving the roads that they drive. I went to experience firsthand the devastating drought which is affecting many parts of south-west Queensland and north-west New South Wales. I was also very keen to see what more the government could do to help in those drought areas. But another reason for my visit was to get firsthand evidence of what I have always known to be the case, and that is the additional cost of living that is imposed upon people who live in remote parts of Australia. Regrettably, this cost of living really creates two Australias. For people in the west—there aren't a lot of them; they're not a politically significant group—getting to a major footy match involves an airfare that could cost up to $1,500 return. Getting to see the grandkids could involve a long drive at expensive fuel prices. Getting to a specialist or even a doctor in many places involves a cost that people who live in the capital cities simply don't comprehend.

For a long time, I've been aware that these remote parts of Australia produce a great deal of the wealth of our nation—the wealth of our nation that's gained from mining and exploration, the cattle industry, the wool industry and the other industries that occur in remote Australia. I always use this figure: in northern Australia, with only five per cent of the population, we produce something like 55 per cent of Australia's export value. So people in these remote areas make a major contribution towards the wealth of our nation, but they're penalised for it because of the cost of living. An example of this is that in Bedourie a loaf of bread costs $6, and $2 of that is the cost of transporting the loaf of bread from Quilpie, where it's made, to Bedourie, a few hundred kilometres away. When I left Townsville last Tuesday, I filled my car with diesel and paid 158.9c a litre for diesel. When I got to Bedourie, to fill up the car again I had to pay $2.09 per litre for diesel. So you can understand the impact that has on people who live out in those areas, paying something like 50c a litre more for the diesel fuel that everyone has to use to get around in those parts. It is clearly unfair.

Back in 1945 the then government—I concede it was a Labor government—devised a program called the zone tax rebate scheme. If you read the speeches of the then Treasurer, you'll see that this zone tax rebate scheme was intended to try and compensate people in remote Australia for the remoteness, the cost of living in remote areas, and some of the difficulties of living in those remote parts of Australia. It was set at the time at 20 pounds and 40 pounds, in the then currency, for different zones, depending which zone you were in. Zone A involved some of the very, very remote parts of Australia. Zone B was for some of the less remote parts of Australia and included places like Townsville and Cairns, which now, of course, have every type of amenity, specialist, theatre and sporting event.

Clearly, over the years the boundaries that were assisted by the zone tax rebate have needed change, and the amount of compensation to people has fallen behind because it's only been indexed on a couple of occasions. Had it been indexed since 1945, my rough calculation is that the special zone A rebate would have been something around $15,000 to $20,000, which would mean that some of the additional cost of living in those very remote parts would be compensated. In the lesser zones, the current allowance of about $300 would have been something like $5,000 to $6,000 and therefore a compensation for those costs of living.

For a long time now, I and a lot of my colleagues from the coalition have been advocating a complete review of the zone tax rebate scheme and how it applies with fringe benefits as well, and also the remote area allowance given to those on welfare payments. I'm delighted to say that just 10 minutes ago the Treasurer, the Hon. Josh Frydenberg, announced that the Productivity Commission will undertake a review into remote tax assistance to ensure it remains fair and contemporary. The review is in response to concerns raised that the remote tax assistance has failed to keep pace with a changing Australia. The zone tax offset, the fringe benefit tax remote area concessions and the remote area allowance provide financial support to people living in remote areas of Australia. The locations eligible for these forms of assistance are determined by geographic zones defined in the tax legislation, which have largely remained unchanged since they were established in 1935. Concerns have been raised that the remote area tax assistance has not fundamentally changed over a number of decades to reflect the changes in demography, infrastructure and cost of living. In response, the Treasurer has requested the Productivity Commission to undertake a comprehensive review of the tax assistance and provide recommendations on an appropriate form and function into the future. The review is to commence early next year, and the commission is due to report to the government within 12 months. The commission will undertake broad public consultation, including meeting directly with remote communities and inviting public submissions.

First of all, I congratulate the Treasurer for taking this step. I, and many others, have been asking treasurers for the last 30 years, in my case, to do this. These requests have been ignored, and so congratulations to Mr Frydenberg for at last taking up the challenge and getting a serious review by the Productivity Commission into the zone tax rebate scheme and the cost of living for those Australians who live in remote parts of Australia.

Can I urge all of those people—and many of them I spoke to last week on my drive from Ayr to Winton, Bedourie, Boulia, Windorah, Quilpie and Cunnamulla—who live in areas like Cape York, Western Australia, outside of Perth, the Northern Territory and remote parts of New South Wales and South Australia to look at the terms of reference and to make a submission to the Productivity Commission. It's important that we do make the Productivity Commission aware of the additional costs of living in remote parts of Australia and give examples of the cost of living and how that impacts upon the livelihoods of people in those remote parts, how it makes it difficult to get workers of any sort, skilled workers, into remote parts to run the mines, to run the schools, to run the police stations, to run the hospitals and to run the councils. The cost of living is prohibitive, and very few will leave the capital cities. This, if it is done properly, may change that and bring some fairness to our fellow Australians who do live in remote parts of Australia.

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