7 July 2014
While Australians are facing increased tax pressure, even the LNP’s own Northern Australia Committee has called for tax breaks on the goods and services tax, capital gains tax, fringe benefits tax, company tax and personal tax for the region to be developed.
However, consensus among business groups is development will only come with foreign investment.
The mining industry believes foreign investment is paramount, with the Queensland Resources Council telling a parliamentary committee due to the ownership and make-up of resources companies with tenure in the north regions, “a significant percentage of the capital to sustain current operations and develop new projects will be foreign sourced’’.
Integrated Food and Energy Developments, headed by former Queensland Treasurer Keith De Lacy is trying to develop a $2 billion farm project in the north but wants to get freehold title over 326,000ha of the north because foreign investors, particularly from Asia, want to own the land they invest in.
IFED chief executive David Hassum said it needed “a very big carrot’’ in terms of tax breaks as well as federal and state tax vehicles to entice early-stage seed capital.
“We have an issue in this country with the perception of political risk and sovereign risk. For the first time in my career, this has crept into discussions in the last couple of years when I have been talking with overseas investors. There is concern … about getting approvals through.”
He said the leasehold title over much of Northern Australia restricted investment.
“When you talk, particularly in international capital markets, which we need to be to fund something like this, they do not understand pastoral leases,’’ Mr Hassum said. “You are asking investors to spend $2 billion on land they do not own, so the nature of the tenure is a huge impediment to investment … you will knock out potential investors if it is not freehold.
“It will be very difficult to raise the necessary capital to build it if it is not freehold, or components of it are not freehold — particularly where the major capital expenditure has to go: the processing precinct, the farm and the water storage.’’
But changing the title would be almost impossible because of native title, which would have to be extinguished before land was available as freehold.
Agforce told the hearing about 67 per cent of Queensland was leasehold land and 51 per cent of that was term lease, which meant native title survives and that had already proved a barrier to State Government plans to allow a transition for farmers to move to freehold.
Courtesy of the Courier Mail