资源环境科技发展态势分析平台

In a competitive labour market, mining companies must be flexible and offer a variety of workforce arrangements if they are to be successful in attracting and retaining employees. Labour mobility is also critical to ensuring a diverse workforce.

 

Tax is a consideration, but is not the driving factor influencing a mining company’s decision to source workers on FIFO or DIDO or local hire/remote accommodation. The purpose of the Fringe Benefits Tax (FBT) FBT legislation is to ensure equitable tax treatment of salary and wage income with non-cash benefits provided to employees in respect of their employment services. FBT rules recognise that housing and transportation costs are a necessary business expense in order to operate an efficient, modern mining business. The costs are incurred by mining companies in order to employ a suitable workforce in remote areas. The costs are not employee benefits in the sense of that term applying to non-salary forms of remuneration.

 

The FBT legislation was designed to capture all non-cash benefits by employers to employees (i.e. computers, tools of the trade, mobile phones, cars, car parking, low interest loans etc.). The legislation then excludes items that should not be subject to the tax in the first place. These items of expenditure are necessary for the employee to complete their job (i.e. computers, tools of the trade and mobile phones). In order to achieve that equitable outcome, the legislation exempts from taxation a number of precisely defined arrangements such as remote housing and transportation expenses. Remote area housing and transportation costs that are exempted from FBT are not concessions; they are necessary business costs. Correctly, the provisions for remote area FBT exemptions also apply to local workforces renting or purchasing a home – it is not restricted to FIFO workers.

 

There are, however, some legitimate costs which are not exempt, which means the system is not equitable and does not operate efficiently. The current FBT residential housing rules encourage employer-owned or employer-leased accommodation over employee-sourced rental accommodation where the rent is reimbursed by the employer. The current FBT housing exemption for remote communities should be extended to all rental accommodation for residential employees regardless of whether the employer leases the accommodation and provides it to the employee or the employee leases it and is reimbursed by the employer. The current FBT remote area rules are complex and create significant compliance costs on employees and employers. Aligning the treatment of types of rental accommodation will remove this complexity and cost.

 

In addition, it is important that the taxation system does not penalise mining companies that offer specific employment opportunities to people in regional communities who might otherwise not work in mining.

 

The current ‘remote area’ definition for FIFO transportation and housing should remain. The definition has been in place since the inception of FBT, is well understood and, most importantly, reflects the fact that the costs are incurred in operating a remote area mining business. They are not a form of remuneration benefit that should be caught by FBT.

• No change to the pre-existing definition of remote areas, due to the adverse material cost that would be incurred by employers should they no longer be eligible to access the remote area benefits exemptions or concessions
• Widening FBT exemptions to include subsidies to employees by way of contribution to mortgage and long term rental arrangements, thus helping to remove any disincentives for employees to make a permanent regional move
• No changes to the tax treatment of FIFO and DIDO that add to the already significant cost of doing business and deny workers the choice to fly-in fly-out or drive-in drive-out of their place of employment.