The Minister for Revenue and Financial Services, the Honourable Kelly O’Dwyer has recently received a four-page letter from Rebekha Sharkie MP, Federal Member for Mayo, providing further detail to support a KI petition to receive Zone Tax Offset status for KI residents.
Ms Sharkie quotes a section of the Income Tax assessment Act (Cth) which states that rebates are granted to residents of isolated areas, “...In recognition of the disadvantages to which they are subject because of the uncongenial climatic conditions, isolation and high cost of living ...in comparison with parts of Australia not included in the prescribed area...”
The KI Watergap Recognition Project prepared for the KI Development Board in September 2009 summarises challenges faced by islanders:
“The high cost of transport ...imposes a raft of social disadvantages on the residents of KI.
“Firstly, it adds to the general cost of living, as all consumer goods which are sourced from the mainland carry a transport premium.
“Secondly, while eligible for marginally discounted fares, the isolation from mainstream Australia is particularly acute for KI residents due to the high cost incurred when accessing tertiary education, specialist healthcare and other essential community services which are not available locally.”
The median weekly income for couple families with two incomes and children, according to the 2011 Census, was $1,475. For couples without children it was $1,238.
Compared with SA incomes, $2,130 and $1,906 and the respective Australian median weekly incomes of $2,310 and $2,081, it can be seen that KI incomes are much lower, and also lower than other areas currently covered by the Zone Tax Offset.
Kangaroo Island is in the upper end of the ‘remote’ category for the 2011 Accessibility/Remoteness Index of Australia (ARIA) and is considered remote for the purposes of Fringe Benefit Tax.
It is classified as MMM7, the the most remote, according to the Federal Government Department of Health, the other locations being all islands including King Island and Flinders Island, and is in the top two remoteness categories in the Pharmacy ARIA.
Ms Sharkie explains in her letter about the high cost of getting on and off the island, with a return ferry trip for two adults, two children and a car, costing $322 (peak) and $284 (offpeak).
The limited availability of flights between Adelaide and Kingscote cost about $240 return per person.
She mentions mortgage stress – KI being the second highest mortgage-stressed local government area in SA; limited market competition due to small population base; limited availability of medical services – with only one hospital in Kingscote with a limited range of services and limited outreach services beyond Kingscote.
There are only three educational campuses across the island and a limited TAFE service.
There is only one police station to cover 4,405 square kilometres.
Electricity supply, road infrastructure, essential communication services issues are all highlighted by Ms Sharkie.
KI faces unique challenges, relying for the most part on sea transport, with an expensive return journey of four hours or more to Adelaide, Ms Sharkie reiterating that the cost of a return trip is approximately half of the average weekly income of a KI resident.
Ms Sharkie concludes her extremely detailed letter by urging Ms Dwyer to provide Zone Tax offset status to KI.
The Islander will keep you updated on any progress.