Today, not being a local, I’ve just discovered that Cobarians live in a Zone tax offset area – Zone B to be exact. I rang the ATO to ask whether it was worth amending our last couple of tax returns to include this rebate and the representative had no idea about zone tax offsets but put me through to someone “who would know”. Refreshingly, this second representative said that he’d never heard of a zone tax offset and we both laughed.
When we both set about bringing it up on our respective computers, I discovered that the Zone B rebate is worth a whopping $57 p.a. so No, I won’t be applying for any amendments thank you. But Yes you’re right, that was a really embarrassing mistake for someone, who prides herself in her knowledge of all things ATO.
In my defence, let me just say that I did know about zone rebates but had just forgotten. In fact it’s just over ten years since I wrote to the Minister for Farrer on this exact issue.
Just in case there are others, who’ve never heard of the zone tax offset, here’s a brief explanation of a very complicated system whereby the ATO allocates rebates to taxpayers living in remote locations based on a list called The Australian zone list. (https://www.ato.gov.au/Calculators-and-tools/Australian-zone-list/).
The amount of the rebate is determined by the taxpayer’s address, whether they have dependants and whether they’ve lived at that address for at least 183 days……. And it’s income-tested. Did I mention it was complicated?
Here’s a chart from the A.T.O.’s web site to explain it better. https://www.ato.gov.au/Individuals/myTax/2020/In-detail/Zone-or-overseas-forces

Now, as you can see, taxpayers living in Zone B (including Cobar) might not bother claiming an annual ($57) tax offset, whereas taxpayers living in “special areas” would be mad if they didn’t. The Australian Zone List is based on a map with the equally complicated title of Australia: zones A and B for income tax purposes (including special areas) / Natmap.https://nla.gov.au/nla.obj-232818315/view (zones are in blue).

One might think that the amounts of the rebates are linked to the remoteness of the area and the lack of services such as public transport or medical and/or cultural facilities but those days are long gone.
Not only does Ivanhoe fall just outside of these lines in the sand – no tax offset for you! – but the poor hard-done-by residents of Lord Howe Island apparently get the Special Area rebate – every year.
So back in July 2010, after many hours of research, emails and phone calls I wrote to the then federal member for Farrer concerning what I considered was an injustice in the Zone tax offset system. Here’s a summary of the email:
Dear Sussan.
I’m writing to draw your attention to an inequity in the ATO’s zone tax offset categories where residents of Ivanhoe NSW are not entitled to any zone tax offset while neighbouring Broken Hill with its art galleries, museums and restaurants is classified as Zone A and tax payers are ‘compensated’ with an annual tax offset of $338. According to advice from the Australian Taxation Commissioner’s Office, it needs a member of parliament to request a re-classification.
I went on to point out the facts as I saw them:
Ivanhoe, in drought-stricken far west New South Wales and with a population of less than 400 has 3 shops – a general store, café and take-away (no butchery, bakery, news agency, pharmacy, dental facility etc) and it is not uncommon for residents to travel to Mildura (4 hours) or Griffith (3 hours) to do their shopping.
In the Police Force, Ivanhoe and Tibooburra are generally regarded as the two most remote areas of NSW and are duly classed as ‘Special Remote Locations’. There are 4 roads into Ivanhoe, however three of them are closed when it rains. Mail is delivered 3 times a week unless it rains. While the Post Office is an agent for the CBA, there are no banks in Ivanhoe and non-affiliated customers must pay a fee every time they withdraw money. In summer, Ivanhoe’s temperature can climb as high as 47 degrees. Ivanhoe’s neighbours – Menindee (population 981), Wilcannia (population 759) and Broken Hill (population 21, 314) – are all classified by the ATO as remote areas and therefore their residents qualify for a zone allowance. I would submit that Ivanhoe must also qualify.
Here’s the reply from her office:
Dear Ms Matthews
Thank you again for taking the time to contact Sussan about the ATO Zone Rebate Allowance for Ivanhoe.
Sussan raised this issue with Central Darling Shire Council (which includes Ivanhoe) prior to last weekend’s federal election, and has followed this up again this week.
Unfortunately there does not seem to be interest in the allowance either from the residents of Ivanhoe, nor the broader Central Darling Shire area.
Due to this lack of community support for the allowance, Sussan is unable to raise the issue with the Australian Tax Office, at this time. She will be more than happy to look into this again, should it be requested by the current residents of Ivanhoe and Central Darling Shire.
Thank you again for raising this issue with Sussan.
Regards, Elizabeth Sandow
Electorate Officer to THE HON SUSSAN LEY MP
So there you have it! Ivanhoe’s residents don’t want any extra money thanks very much. Amazing!!
Fast forward ten years and for anyone still awake, today I came across this news article published in March this year and titled “Govt rejects PC call to axe regional tax concessions”, which is well worth the read (well….. if you’re a tax nerd). Apparently I’m not the only one who thinks this archaic system should be either overhauled or scrapped. https://www.beefcentral.com/news/govt-rejects-commission-call-to-axe-regional-tax-concessions/
Briefly, (I know…. when am I ever?) the article states that last year (2019), the Australian Government asked the Productivity Commission to review the Zone Tax Offset. The response was a Productivity Report that described remote area tax concessions as “outdated, inequitable and poorly designed”. The PC report went on to say “Remote Australia has changed considerably since the introduction of the first of these concessions in 1945” finding that the “ZTO no longer serves a purpose in contemporary Australia and is not needed”.
Scott Morrison’s Government responded with, “the Government will not be acting on the Productivity Commission’s recommendations”, which is unsurprising when you consider the reactions of all those voting tax payers living in Zone A or special areas.
Of course some remote areas do deserve remuneration in the form of a tax rebate and the PC report concluded, “If the ZTO is retained, only people living in very remote areas should be eligible”.
So ten years later my question still stands, “How can anyone justify throwing money at the residents of Lord Howe Island or Broken Hill or argue that these residents are somehow doing it tougher than the residents of Ivanhoe?”
Seriously?