Territorians will be worse off under new tax proposal

05 September 2019

Malarndirri McCarthy speaks to 360 with Katie Woolf on MIX 104.9

KATIE WOOLF, MIX 104.9: We are going to take a real change of pace right now. There is an interesting story thats floating around, it's on page three of the paper today and it says, come tax time, Territorians will be between $338 and $1173 worse off. That is if the Commonwealth accepts a controversial proposal in the Productivity Commission latest report. Joining me on the line to talk a little bit further about this is Senator for the Northern Territory Malarndirri McCarthy. Good morning Malarndirri.

MALARNDIRRI MCCARTHY, NT SENATOR: Good morning Katie and good morning to your listeners.

WOOLF: Malarndirri, this is a concern. I know it's not a huge amount of money, but we know the Remote Area Tax Concessions and Payment Report has recommended dumping the Zone Tax Offset. It's an offset of up to $1173 available to Territorians paying tax. I would argue that we shouldnt be dropping these types of things. We should be trying to increase them to get more people to move to the Territory.

MCCARTHY: Its a very good point, Katie, and thats what weve always wanted to do, is to make sure we do have people coming to the Territory and that we increase our population and economic circumstances. This report that's come out by the productivity commission, is still in its early stages, so I'd just say to people just take a bit of breath because you actually now can impact the full outcome of this Productivity Commission by sending in submissions about your concerns.

WOOLF: So what is the process with this Productivity Report, Malarndirri? What can people do?

MCCARTHY: The Australian Government has clearly asked the Productivity Commission to do a report around the tax issues for remote and regional Australia, focusing primarily on those three areas: the Zone Tax Offset, the Remote Area Allowance and the Fringe Benefit Tax. So those three key tax areas is where the productivity commission is looking at. Now with the Zone Tax Offset, and you're absolutely correct Katie, it goes from between $338 to $1173 for a certain percentage of numbers in the Northern Territory who actually are eligible for that and it came in, and get this, the Zone Tax Offset actually came in during WWII.


MCCARTHY: And the Australian Government has not have a review into the Zone Tax Offset specifically since then, so there is obviously a need to have a look, to actually look at the bigger picture right across the country. And then you've got the Remote Area Allowance, which also requires looking into, so if we focus on that Zone Tax Offset, it's around $153 million that if the Government and if the Productivity Commission get rid of it, that's $153 million that goes back into the coffers of the Government. So for those participants across the Northern Territory who actually receive this money, they should get on to the productivity commission website and think about putting in a submission as to how it's going to impact them.

WOOLF: Malarndirri, are there a lot of Territorians that are actually accessing this?

MCCARTHY: That's a good question. In terms of the Zone Tax Offset, it is claimed by about 3% of Tax payers across the country, Katie, so that's around 480,000 people. Here in the Northern Territory, its largely Darwin. So almost 40% of Northern Territory residents claim this Zone Tax Offset, so thats a significant number.

WOOLF: So while it doesnt seem like a huge amount of money, it is something that does benefit us come tax time, and lets be honest we're all trying to always find ways to get a better benefit at tax time.

MCCARTHY: Absolutely. Especially when you see cuts in other areas, like if people have been impacted by penalty cut rates, just in their employment situation, if they've got dependents, theyre also able to claim this. If you've got children you can aalso add a 50% extra on claiming that tax rebate, so it does matter. I imagine it would matter to people who use this so I would seriously encourage people, especially those 40% who receive it here in the Northern Territory, get on the website and put in your submissions. You've got until 11th October to show the Productivity Commission just what this means to you.

WOOLF: Malarndirri what impact you do you think this is going to have on the Northern Territory if they do make changes and cut this?

MCCARTHY: Well think about the figures. If we've got about 40% of Territorians who receive this, then thats 40% of people who are going to reconsider their situation here in the Northern Territory. Whilst the Productivity Commission sees the figures as small, not in the Northern Territory. It matters to people here. Things are hard enough at the moment as it is and people who do live in remote and regional areas, especially the North, already have disadvantages, so having this kind of tax offset would no doubt be important. So I think the louder the voices, the more submissions that go in, is going to be critical in this Katie, absolutely.

WOOLF: It's always a bit of a battle. I find that we're always battling with Canberra. I know that you're there often, it's always a struggle, we want to be heard but we dont seem to get heard as much as we'd like to.

MCCARTHY: It's that and it's also the fact were pretty tough and resilient, we get back up after we dust ourselves off but and then we get hit with something else. I was looking at this report yesterday and I was like oh my giddy aunt, seriously? So now when I go back to Canberra on the weekend to go to Parliament next week obviously I'll be talking with my colleagues, with Luke Gosling and Warren Snowdon and other Labor colleagues. Where do we sit here and what are we going to do? And clearly I need to hear from the people of the Northern Territory.

WOOLF: I just think as well, we're here in the Territory trying to get people to move to the Territory. We're trying to get more people here, we're trying to entice people to boost the population and to fill some of those jobs that we cant currently fill, but then it feels as though some of these changes that may save some pennies for the Federal Government, theyre not necessarily helping the regions, in any way, shape or form.

MCCARTHY: And it comes as a surprise, Katie, that's the other thing. I'm not too sure how many people would have been aware that there was a Productivity Commission review going on, and I certainly was reading through the report, and thought goodness me who did they actually speak to in the Northern Territory? It'll be interesting to see some of those submissions, so I would urge people to really get their head across this. If it matters to you, make a submission before October 11.

WOOLF: Where can people go to make those submissions?

MCCARTHY: Just go on the website, google productivity commission, and you'll see their page come up, and it will guide you as to how to put in the submissions, and I can certainly provide that to you as well Katie for your Facebook page, but that's really the best way to do it, it's where I went on to have a look at just what the details are. So i'd just encourage people to have a look on the Productivity Commission website and follow the instructions from there.

WOOLF: Senator Malarndirri McCarthy always appreciate your time, thank you very much for having a chat with me today.

MCCARTHY: No worries Katie, and I'll keep in touch with you, and by all means let us know how people are feeling out there.

WOOLF: Absolutely, thank you very much for your time.