Fly in fly out miners have been targeted in this year’s budget, with the government set to slash Zone Tax Offsets.
Announcing the change overnight, the Budget stated that it will hammer both FIFO and DIDO workers through “better targeting of the Zone Tax Offset (ZTO) to exclude FIFO and DIDO workers”.
It is estimated that around 32 per cent of people who claim the ZTO live outside of the zones in which they work.
The Abbott Government rationalised the cutting of the offset, stating “it is estimated that around 20 per cent of all claimants do not actually live full-time in the zones and do not face the same challenges of remote living that the offset was designed to address”.
“The ZTO was originally introduced to compensate residents for the disadvantages of an uncongenial climates, isolation, and high cost of living in remote areas.
“Excluding workers whose normal residence is not in these areas will better target the ZTO to the taxpayers who have taken up genuine resident within these zones: for example, someone who lives with their family in Perth but has a FIFO job in the Pilbara will no longer be eligible to claim the ZTO.”
It is understood that cutting FIFO workers eligibility for the ZTO it will generate $105 million in the2015/16, and $110 million every financial year following that, generating $325 million in revenue over the next three year period.
The Minerals Council of Australia decried the new tax on miners.
“The decision to deny FIFO workers the zonal tax rebate will impose an additional burden on employees commuting to remote locations,” MCA chief executive Brendan Pearson said.
“Given its inclusion in the tax discussion paper, this issue should have been considered as part of the Government’s Tax Reform White Paper Process.”
The West Australian Chamber of Minerals and Energy were also surprised by the announcement, pointing to the effect it would have on workers and the industry.
"Industry understands the Government’s desire to make the Zone Tax Offset available to those who have genuinely moved to specified remote areas; CME will consult with Government on changes to the Offset, which may affect some FIFO employees," the WA CME said.
“FIFO is essential to meet the industry’s needs for skilled labour, flexibility and global competitiveness in a challenging operating and economic environment. Importantly, FIFO is also a popular work choice for many working in the resources sector,” CME chief executive Reg Howard-Smith said.
Miners themselves were up in arms over the proposed changes, with many claiming to feel blindsided by the announcement.
Speaking on Australian Mining’s Facebook page, many in the industry stated the government’s view on FIFO miners simply ‘working’ in these remote locations was distorted.
“When you spend 80% of the year on site and 20% at home…. how can you say we "just work there,” Ryan Czechowski told Australian Mining.
“Bloody unfair.. The remote area tax rebate actually helped families cope with the FIFO lifestyle and its pressures on social life when partners are working away. I'll be talking to my local MP Pat Conroy, Hope people are listening in the senate as there is no empathy in Manly and the lower North Shore,” Peter Buckley added.
However some welcomed the announcement
Queensland MP for Capricornia, Michelle Landry said the announcement supports people who genuinely live in remote areas.
"This is a welcome change making it fairer for people who live in very remote places permanently with their families. These are the people who have their kids at school, use the local shops and support small businesses and sporting clubs," Landry said, according to The Morning Bulletin reports.
"Other people who simply fly-in and fly-out from capital city areas contribute nothing to our regional communities and shouldn't be getting the benefit of a zone tax rebate."
“FIFO shouldn't get zone tax cut, as they don't "live" in that zone, simply work in that zone. Full time residents of mining town do deserve it as the government has little input to the towns, the towns are generally more self-sustained,” Aaron Reinhard stated on Australian Mining’s Facebook page.
The exclusion of FIFO and DIDO workers from the ZTO will take effect from 1 July, this year.