Prime Minister Kevin Rudd says a re-elected Labor government will set up a special economic zone in the Northern Territory where business will pay less tax.
The plan was immediately described as “catch-up politics” by Opposition Leader Tony Abbott, who in June announced a coalition government would produce a white paper on northern Australia.
Under Rudd’s plan, which is subject to talks with the NT government and business chiefs, NT-based companies would enjoy a lower corporate tax rate, simplified investment rules and streamlined regulation.
“My personal objective for the territory is it would be great to have a company tax rate here one-third lower than that of the rest of the country,” Rudd said in Darwin on Thursday.
Under Labor’s plan the special zone would begin from 2014 and be fully operational by 2018, when the new tax rate would kick.
The plan would also expand the Ord River Irrigation Scheme to open up 14,000 hectares of land for agriculture.
The major project would drive $150 million worth of agricultural production in the region.
A third part of the plan would involve 20-year “growth plans” for Darwin, Cairns, Townsville and Mackay to boost trade and investment.
Rudd rejected suggestions the plan copied ideas from the coalition.
“Mr Abbott’s plan is a plan for a white paper – this is putting forward something very concrete for the future,” Rudd said.
The opposition leader said Rudd had vindicated the position taken by the coalition.
“I am pleased Mr Rudd has finally woken up to the potential for northern Australia,” he told reporters in Hobart.
“Mr Rudd is playing catch-up politics.”
Asked about the cost, Rudd said Labor was still working through the details.
Rudd contradicted himself several times on the proposed tax during a press conference.
At first he suggested it would be for all businesses operating in the NT, then only those based in Darwin before saying corporations based across the NT would benefit.
“It’s just another thought-bubble,” Abbott said.
The constitution allows the NT to have a different tax regime to other states and territories.
