Article – The battle for the north

17 August 2013
Fleur Anderson
The Australian Financial Review
Gazumping Whoops! Where did that come from? Both parties splash cash on dreams of a
northern utopia, writes Fleur Anderson.
Both Prime Minister Kevin Rudd and Coalition leader Tony Abbott have been seduced by the
mirage of a bucolic paradise across Australia’s north, in their battle to snap up Northern
Territory seats.
“Politicians are always going there and falling into the trap of seeing this green paradise, lots of water, acres of rich soil and right on Asia’s doorstop where there are lots of -people waiting to be fed,” northern Australia agriculture expert Dr David McKinna tells AFR Weekend.
“And they talk about tax incentives, but tax breaks don’t mean anything unless you are making money.” The allure of a northern food bowl lifting remote communities out of poverty has claimed many scalps, both in business and politics, dating back to colonial settlement.
That both Labor and the Coalition would stake a large slice of their economic credibility on a part of Australia where mangoes boil on their trees in 55-degree heat, and disease, pests and cyclones regularly bankrupt pioneering farmers, is proof of the hard scrabble for seats this campaign has become.
When former prime minister Julia Gillard bumped off long-standing NT Labor senator Trish Crossin to parachute in former Olympian Nova Peris in February, it was an insight into Labor’s nerves over its slipping grip in the Northern Territory.Narrow margin in Lingiari The large swing against Labor in remote NT communities at the 2010 election threatened to become a wipeout after the Gillard government’s decision to ban live cattle exports in 2011.
Businesses were lost as a result of the temporary ban but the insecurity and resentment toward federal Labor lived on.
Labor’s Warren Snowdon holds the 1.3 million-square-kilometre electorate of Lingiari with a narrow margin of 3.7 per cent, which looks doubtful after Labor took heavy losses in the 2012 Territory election. Coalition Senator Nigel Scullion has been campaigning for Solomon MP Natasha Griggs, who won the swinging seat last election and now clings to a 1.8 per cent margin.
What’s more, Labor was caught on the hop after Tony Abbott persuaded indigenous leader and former Labor national president Warren Mundine to become head of an Abbott government’s prime ministerial council, which would look at dramatic changes to land ownership to promote economic development. Clearly more had to be done.Tax cut With just over three weeks to election day, Kevin Rudd took a punt. He proposed on Thursday a 10 percentage point company tax cut from 2018 for businesses that relocate to the Northern Territory. If the massive company tax cut in an NT special economic zone was a surprise to business, it was an even greater surprise to Rudd’s colleagues.
The newly installed PM was not supposed to nominate an actual number. Labor’s policy document only mentioned an “objective” to reduce corporate taxes in five years.
“Did he just say that?” strategists in Labor’s Melbourne headquarters squawked.
Yes, our Prime Minister was going freelance again in an effort to cut through the voter disinterest that has seen the opinion polls stuck at 52-48 in the Coalition’s favour.
So far, Labor’s plan to woo Territorians seems to have hit a dud note. The front page of the NT News had a headline “PM Goes Troppo: Rudd’s bold plan to turn Top End into tax haven, but who will pay?” But most of the front page was devoted to the story “Witches saved by an elf”.
The surprise tax cuts were enthusiastically embraced by mining tycoon Gina -Rinehart, whose lobby group Australians for Northern Development and Economic Vision helped inform the Coalition’s Top End policy announced in June.Labor’s about-turn on policy It was also slightly embarrassing that Labor ministers such as David Bradbury had ridiculed Abbott’s Northern Australia policy as “wacky” and building “gold-plated streets in Karratha” when it was announced in June, only to adopt similar elements of the Coalition package three months later.
But the Coalition’s package shelved a zonal tax treatment, replaced with other possible tax breaks, because it was unconstitutional. Rudd seemed to have worked out all the angles: the territory is not a state and the tax cut would come into effect outside the four-year forward estimates, so that he would not have to declare the forecast cost in this election campaign.
While both Labor and the Coalition policies have in common tax breaks for the region, less red tape and a 20-year growth plan, Labor’s plan did not include some of the Coalition’s more controversial northern Australia policies, including diverting foreign aid for medical research and training in northern cities.
Dr McKinna, who advises governments and food multinationals about developing difficult markets, says there’s one issue both sides haven’t addressed, to deal with the Top End’s harsh climate.
Genetically modified crops may become one solution to the heat and pestilence that has defeated other visionaries over the past two hundred years, who also dreamed of a northern food bowl.
3.7 per cent is Labor’s margin in the seat of Lingiari.
Courtesy of The Australian Financial Review