'Are You Still Here, Mr Haase : A Study of Australia's Tax Rebates for Residents in Isolated Areas'

In 1945, Ben Chifley, the Australian Labor Party (ALP) Treasurer, introduced ‘an income tax concession in recognition of the disadvantages to which [the residents of prescribed areas of Australia] are subject because of the uncongenial climatic conditions, isolation and high cost of living … in comparison with [other] parts of Australia'. When considered in light of the personal incomes and tax liabilities of the period, the 40 pound (Zone A) tax rebate was a significant concession indeed.There were further increases in the 1940s, while in the mid-1950s, its boundaries were changed to broaden its application. Reviews of the rebate paused in the 1960s. However, changes continued at reasonably regular intervals throughout the 1970s, 1980s and 1990s. A particularly significant change took place under the stewardship of the then Liberal Party Federal Treasurer John Howard in 1981.However, despite many subsequent submissions to successive Federal governments, including a recommendation by the Henry Review that ‘the zone tax offset should be reviewed', this paper notes that no further increases of the Zone Rebate have taken place since 1993.This paper suggests that the primary factor influencing the reluctance of Federal governments to address the now trivial tax concession is that the political capacity of rural and remote voters has waned. Interestingly, when John Howard, as Prime Minister in 2006, was questioned as to when rural and remote taxpayers might expect an increase in the Zone Rebate, he expressed an opposing view to the one he put forward in 1981 and even suggested that the rebate may be unconstitutional.More recently, in May 2013, an ALP Prime Minister also suggested that the Zone Rebate may be unconstitutional. She also reiterated a statement made by Liberal Treasurer Peter Costello in 2006, that ‘it is the preferred policy of the Government to cut taxes for all Australians … rather than provide geographically targeted tax cuts through increases in the zone tax rebate'.This paper suggests that the ‘concession in recognition of the disadvantages to which [rural and remote taxpayers] are subject' has been surpassed by the political expediency that the number of taxpayers in the ‘Bush' is now numerically inferior to the number of voters in the cities of Australia.Political considerations are so powerful that proposals to review the tax concession are met with the reply – ‘Are you still here, Mr Haase