Tax professionals have questioned the logic behind the federal government’s plan to remove the living away from home allowance for temporary residents, a group of employees used heavily by the mining industry.
Specialists at accounting firm BDO said that they regarded the government’s move to deny some employees access to these tax concessions as being inconsistent with the stated objectives of a dedicated tax regime in Australia for temporary residents introduced in 2006.
“The temporary resident tax rules are expressly designed to attract internationally mobile skilled labour to Australia, reduce the cost for Australian business of employing these workers and help promote Australia as a desirable location for overseas investment and business migration,” BDO Perth head of corporate and national tax said.
“Providing living away from home tax concessions to temporary residents recruited or seconded to work in Australia is totally compatible with these objectives, particularly at this time of unprecedented growth and demand for labour in the mining and energy sectors.
Further, many temporary residents and their accompanying family members face increased living costs and other disadvantages in relocating to Australia, caused by factors such as ineligibility for Medicare and difficulties in obtaining loan finance and suitable accommodation.
“Giving eligible temporary residents access to the living away from home tax concessions in a similar fashion to eligible Australian citizens needing to relocate within Australian or oversees for employment purposes, seems totally fair and consistent with the spirit and intent of the tax law in this area.
“These proposed tax law changes pose a significant business risk and are of concern to many of our clients and the Government’s consultation process in this area is likely to attract a strong response from the tax profession and affected business and interest groups.”
