Some Queensland Liberal National Party MPs are concerned about Coalition Senator Ian Macdonald’s call for a review of the zone tax for major coastal cities such as Cairns and Townsville.

The Coalition flagged a general tax review as part of its northern Australia whitepaper.

Senator Macdonald says zone tax concessions may no longer be appropriate in Cairns and Townsville, given the cities’ “modern amenities” and should be increased in other areas.

“We need to have a complete review and see if places like Mackay, Townsville and Cairns, which currently get a zone tax allowance of about $50 a year, are still in that remote category,” Senator Macdonald said.

“Do they have access to good hospitals, theatres and schools and cultural destinations and are they still in a situation where they need encouragement to bring people to the area?

“Quite frankly, does the tax allowance of $50 or so, does that encourage people to move from Melbourne to Townsville?

“I think from a government point of view, to make it effective in Normanton or Julia Creek or Alice Springs, there needs to be savings, and perhaps we need to look at where the current zone tax system applies.

“Would it be better to remove it quite frankly from places that have everything and divert it to areas of Australia where they really do need assistance to encourage people to move there?”

Incentives ‘important to grow regional Queensland’

However, the state LNP Members for Cairns, Gavin King, and neighbouring Barron River MP, Michael Trout, disagree.

Mr King says the incentives are important to grow regional Queensland.

“The urban centres of northern Australia is where the absolute vast majority of growth will be,” he said.

Mr King says tax concessions are still needed to boost the north’s population.

“I think we need to continue to support regional cities, regional centres in order that they can cope with that growth, because as much as we want to grow some of those really, really small very remote areas, we’re not going to grow or be able to grow those areas as much as we’re able to grow places like Cairns,” he said.

He says such a move would fly in the face of the State Government’s commitment to grow regional Queensland.

“If we want to grow cities like Cairns we are going to need these type of incentives, these type of benefits encouraging people to move to a place like Cairns,” he said.

“So I don’t support the Senator’s call because there’s a longer term vision at play here and that is we want to grow regional Queensland and these type of tax zones are just another important piece of the puzzle.”

Removing concession ‘does not make sense’

Mr Trout says the concessions are warranted, given cost-of-living pressures.

“The cost of doing business in northern Australia comes at a far higher average than in the south and your fuel you’re paying more, so I think if there’s any incentive for doing business in north Queensland it should be applauded,” he said.

Townsville Mayor Jenny Hill says removing the concession does not make sense.

“We can pay more for petrol, we pay more for insurance and now you’ve got Senator Ian Macdonald suggesting we shouldn’t have a tax rebate, no,” she said.

“Let’s have a look at the whole situation as part of the northern Australia policy. Let’s make sure we develop a policy that will let these regions grow.”

Cairns Mayor Bob Manning says if the concessions are withdrawn, other incentives would be necessary to attract people to the region.

He says on the face of it, Senator Macdonald’s comments appear to contradict his party’s election commitment to develop northern Australia.

“I can see where he’s coming from but I don’t think he would get much support from the region unless we look at this in a broader context involving other issues involving northern Australia,” he said.

“You’re not going to let go of what you’ve got until you know you’re going to get something better or something more meaningful.”

Editor’s note: The ABC originally reported that Senator Macdonald said tax concessions could be “withdrawn”, but the story has been updated to show the Senator has called for a “complete review” to see if certain regional cities are still classed as remote.