Under the Remote Communities Freight Assistance Scheme, the discount on essential goods such as milk, bread and fresh produce would rise from 5.2 per cent to 20 per cent.
About 32 retailers across the Cape York, Torres Strait and Gulf regions have signed up to participate in the scheme.
Talei Elu, who lives in the community of Seisia in the northern peninsula area of Cape York, said residents had struggled with high cost-of-living for decades.
"At the end of the week, you might be eating basic foods like bread and noodles. Some households really struggle with that," she told AAP.
"It affects not just daily life but what you eat, how healthy you are, how often you get sick, if you're not eating much fruit and vegetables because they're higher in cost than a packet of noodles.
"It's not just about groceries for us. Food supports our health ... if you want us to be healthy you need to support a better economy that can support us to earn better to be able to buy fresh produce."
Announcing the increased discount in Cairns on Wednesday, Queensland Premier Steven Miles said the subsidy would decrease the average cost of a bottle of milk from $5.40 to $4.32.
Premier Steven Miles says the subsidy will benefit remote communities. (Jono Searle/AAP PHOTOS)
"It will make a big difference to the cost of fresh food in these remote communities," he said.
"We'll monitor the impact it has and continue to do what we can to address the cost of living in these remote communities."
Ms Elu welcomed the increased discount on essential goods but said it does not address the systemic issues which underpin the cost-of-living pressures in remote communities.
She said in the months following a cost-of-living summit on Thursday Island in July, where the 5.2 per cent discount on essential goods was announced, the major freight provider to the region, SeaSwift, raised its prices.
"While this news is welcome, I don't think it's a long-term solution and I fear it is only a quick fix and a good announcement ahead of the state election in October," Ms Elu said.
"While the current freight subsidy has been in place, we have had power outages in the region, meaning that even the subsidised meat, milk and frozen goods have had to be tossed.
"We've had telecoms issues, meaning people can't access their finances, stores that rely on the cell and internet services can't continue transactions. A freight subsidy does nothing for households in that instance."
Ms Elu said she would like to see infrastructure commitments, disruption to freight and retail monopolies, and support for local entrepreneurs in the region.
"A real hard look at injecting some competition into freight and retail markets is sorely needed," she said.
"We're solely reliant on (freight from) Cairns for our groceries and it shouldn't be like that. If we're already remote and isolated we need to think about how we can get creative with supporting our own people with the land that we have and the resources we have."
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