Inquiry hears of FIFO regional impact

A TAX break for mining companies working in remote areas may be encouraging the use of fly-in, fly-out workers and discouraging expansion of local communities, a parliamentary inquiry heard on Wednesday.

The House of Representatives' Regional Australia committee is investigating the FIFO industry and its impacts on regional communities.

After 12 months of exhaustive hearings and more than 200 public submissions from around the country, the committee held its final public hearing on the matter in Canberra on Wednesday.

Among the witnesses to front the inquiry were senior officials from Treasury and the Australian Taxation Office.

Treasury officials told the committee that tax breaks on transport to and from work (such as charter flights to remote mines) were working to the advantage of city residents working at remote mines, while the tax treatment of housing in remote areas helped to encourage people to live in regional and remote communities.

An exemption from the fringe benefits tax allows companies in areas listed as "remote" to claim deductions on the costs of getting employees to mine sites, creating considerable incentives to mining companies to fly in their workforces, rather than grow regional communities by encouraging a larger resident population.

But committee member, Western Australian MP Barry Haase, asked the bureaucrats whether changes to the way this travel was paid could encourage more regional development in mining areas.

He hypothisised that mine workers being paid an annual travel allowance - to make their own travel arrangements to and from work - would be more inclined to buy a house in a town near the mine, thereby boosting local communities.

Officials from the ATO and Treasury indicated that while the employee would not get a tax break for such a travel allowance, there was nothing under current tax law preventing such an arrangement.

The inquiry was expected to report its findings to parliament early next year.

Topics:  fifo parliamentary inquiry

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