You never, never know if you never, never go. Both political parties as of this week have announced plans to create a special economic zone in North Australia.
The Coalition’s plan was denounced as laughable. Kevin Rudd’s plan has been greeted with the question: Why?
The key platform is to reduce the corporate rate of tax by one third for businesses operating in the territory or in the words of Stephen Long turn NT into a tax haven-Singapore with Crocs.
With major gas projects, infrastructure projects and commercial activity, the NT is doing ok without any special treatment.
Respected economist Saul Eslake pointed out the obvious, “businesses could abuse a special economic zone.
It could simply result in the transfer to the Northern Territory of economic activities that would have otherwise been undertaken in other parts of the country.
Hence there’s no overall boost to economic growth in Australia as a whole, but there is a loss of tax revenue.
Indeed there’s a possibility, unless there are particular safe guards around this, that it could become a vehicle for large businesses simply to reduce their tax.”
Even though this plan is not to take effect until 2018 (at least another election) it stifles any discussion that the Territory will progress to Statehood as the Plan already presents constitutional issues as it unfairly benefits NT over the other states.
What has been most damning for Rudd, was revelation that that key ministers were not informed of this policy prior to its announcement. This coupled with rumours of a breakdown in communication between the travelling campaign and campaign HQ suggests that Rudd has reverted to his chaotic management style.
Little wonder the ALP is behind in the marginal seats.