Prime Minister Kevin Rudd has promised to stimulate growth in Darwin and Northern Queensland (Cairns, Townsville and Mackay) by creating a special economic zone which would benefit from reduced corporate tax rates for companies based in the zone – if his Government is re-elected in just over three weeks time.
Meanwhile, Tony Abbott was announcing his intention to give Tasmania a shot in the arm as well. When asked if he would match Rudd’s corporate tax cut for the North, he responded that he would take a close look at it, but that the proposal appeared to be totally uncosted.
It is encouraging to see the two Prime Ministerial contenders exploring opportunities to stimulate growth in areas of Australia which are lagging behind economically. If something is to come of these proposals after the election, we can look forward to improved utilisation of Australia’s vast potential. A special economic zone with reduced taxation may indeed be an effective stimulant for commercial investment, although many investors may understandably be wary of trying to establish a business based on policy which can change as quickly as the leadership of a political party, particularly if that political party has a poor track record on consistency and stability.
The notion of giving a region of Australia which has significant economic hurdles a hand up, and enabling them to contribute more substantially to the productivity and success of the nation, is unlikely to find much argument from the majority of people. But the practical measures necessary to achieve the stated goal are highly debatable, and need to be thoroughly researched, planned, and implemented.