Article – No tax breaks for Northern Australia

12 June 2014
Mark Ludlow and Matthew Cranston
Queensland Country Life
THE Abbott government has moved to kill off any prospects of tax breaks for northern Australia by saying it would be too costly and complex to implement.
The federal government’s green paper on developing northern Australia is looking at specific options to boost economic activity in the region.
A draft coalition discussion paper, which was leaked in February last year, outlined plans for relocation incentives and different tax rates to encourage people to move to northern Australia.
Then opposition leader Tony Abbott distanced himself from the report at the time.
The green paper, released by acting Prime Minister Warren Truss in Townsville on Tuesday, appeared to finally extinguish any chance of a special tax zone for rural Australia.
It said many people living in northern Australia already received a zone tax offset, saying the taxation system was not necessarily the answer for addressing problems in the bush.
“Alternatives such as improved social infrastructure and local services can be more effective in assisting communities or businesses without increasing the complexity of the tax system,” the green paper said.
“The tax system should also not encourage businesses to relocate from one region to another to the cost of the nation overall.”
While the green paper has outlined a range of areas that need to be considered including infra structure, land, water, business investment, research and governance, it has made it clear any new initiatives must be cost-effective and driven by the private sector.
It said the white paper, to be finished next year, should “seek to advance low or no-cost solutions given the current fiscal environment, and facilitate private-sector funding wherever possible”.
Courtesy of Queensland Country Life