A federal inquiry into fly-in fly-out work arrangements has called for a review of tax incentives that encourage people not to live in the communities where they are employed.

The parliamentary inquiry has heard fly-in fly-out work pays very well and provides large blocks of time off but it is also damaging some communities, where health and other services are under pressure.

And, it found FIFOs are not participating in community life.

The inquiry chairman Tony Windsor says the high cost and low supply of housing means many workers choose to "cash in" rather than living in the communities.

He says all levels of government need to provide an opportunity for workers to live full-time in the communities where they are employed.

"There could be incentives put in place to encourage people to reside in the community rather than the current practice," he said.

"When you analyse it the incentives are not to live in the community and that's a shocking indictment."

The WA Premier Colin Barnett has defended fly-in, fly-out work as a personal choice that suits many families.

He says it is presumptuous to assume it does not work for everyone.

"Fly- in, fly out will always be a part of the West Australian workforce because there will always be mines in very remote and isolated locations," he said.

"So, let's let people make their own choices and not dictate from Canberra as to how you should live your life."

Bruce Campbell-Fraser, from the WA Chamber of Minerals and Energy, says he has concerns over some of the report's recommendations.

"We are wary of a couple of recommendations around reviewing the fringe benefits tax and zone tax offsets," he said.

"We hope that there are no unintended consequences if the Government chose to amend these areas because the cost of doing business in Australia is a pretty big challenge for the resource sector."

Mr Campbell-Fraser says extra costs do not need to be added.

"We have got to be wary that we are not adding additional costs onto the sector," he said.

"Australia is a pretty expensive place to do business and we need to continue to be an attractive place to develop and attract investment as well."

The inquiry has made 21 recommendations and found while the system provides mining jobs, it also does significant damage in regional communities.

The reports says accommodation for workers is an ongoing issue but there does not appear to be a plan to target "the housing crisis".

It says the Commonwealth's National Housing Supply Council must urgently develop and implement a strategy.

There are also concerns for workers' health and welfare given the long hours of remote work and the time spent away from family.

Action wanted

The Pilbara Regional Council put in a submission which highlighted the strain FIFO workers put on housing, local infrastructure and services.

It advocated changes to the Australian taxation zone rebate to benefit only permanent residents.

The PRC's chairwoman, Lynne Craigie, says the council is looking for a less talk, more action approach to the report.

She says more needs to be done to better integrate FIFO workers into the communities in which they work.

"What we want is we want to see our towns grow, we want to see our population enhanced so it becomes a liveable community for everyone," she said.

"Otherwise we are just having FIFO workers pick the cream out of our communities."

Ms Craigie hopes the recommendations are acted on.

"I think the big problem we have is this could become yet another talkfest," she said.

"You know, how many times have we heard them make promises about what they might do, and my fear here with an upcoming federal election is this all could get lost."

Committee member and the Federal Member for O'Conner, Tony Crook, says the impact on health services came in for scrutiny.

"The extra pressure that fly in fly out workers put on health services in the regions; there's a whole number of recommendations there that I think really do warrant further looking," he said.

He says the report is not about getting rid of FIFO.

"For me it's about ensuring regional communities survive, I know full well that FIFO is here to stay and there are projects that just simply would not survive without fly-in fly-out workers," he said.

"For me it's just to reinvigorate and rejuvenate and continue for these regional communities to prosper."

Click on the following link to see our special report on the difficulties of finding affordable housing in the Pilbara.