Integrated Development Zones – the solution for our north

Gina Rinehart argues the federal government should offer tax breaks to help northern Australia grow.

 

The Deputy Prime Minister Mr Barnaby Joyce is to be congratulated for bringing to Australians’ attention the needs and potential for the towns in the Pilbara to grow.

 

Earlier after the natural devastations of floods and fires, (well , approx. some 87 percent of the fires were lit by man accidentally or otherwise, but spread out of control given the increasing legislation restrictions on adequate clearing and uncleared tinder in national parks and state forests) the Hon Barnaby Joyce called for special economic zones (SEZ), also called Integrated Development Zones (IDZ), to be set up to help redevelop the areas most devastated, and recently in the Pilbara to help the acute housing shortage.

 

These zones, more than 6,000 of which successfully operate around the world, simply reduce tax and tape. Isn’t it far time our north had such zones too?

 

If more land became available for housing in the Pilbara, and there were less regulations on building, private developers could develop more homes, quicker and with less expense than government and alleviate the need for people to be forced to live in tents or caravans, be that for emergencies like domestic violence or simply scarcity of housing. IDZ covering coastal towns like Port Hedland and Dampier, and adjacent Karratha, could most effectively assist.

 

Let’s have practical solutions to problems, and real ideas for improving living standards, not hastily thought about political handouts, whilst on the election run. All these extra government splurges equal more debt and ultimately more taxes.

 

Instead, Australians for northern development and economic vision, ANDEV has been advocating IDZ’s for many years, because they have been tried and proven to be successful around the world over many years.

 

Canberra still doesn’t get it, lowering taxes and tape in these special zones, has not only been successful, but has led to much more investment and revenue, not less, and hence, has shown that overall tax revenue increases.

 

Just look at the beautiful Whitsundays, taking approximately 20 years to get approval for a Shute harbour marina development, and hence is the first significant development in the tired Whitsundays for more than 20 years. What perseverance! But also, what revenue and tax revenue has been lost in those 20 years!

 

Nor does Canberra get it with taxpayer funded infrastructure. Haven’t we seen enough examples of taxpayer funded infrastructure to know this isn’t the most cost efficient route? Look for instance at the big spend on new non catholic schools for new school kitchens, which cost approximately 10 times more to build than the ones built at Roman Catholic schools.

 

And then the government managed ones, forgot to include pie warmers! Look at the Tonkin highway expansion, over in WA, one billion dollars or more, built on flat land, should have only cost a tenth of that or even less.

 

And for those living in Sydney, enjoying the years of disruption and waving to the “lollipop men “, do we really need to experience more government infrastructure programs with their years of delays and intrinsic huge rising costs? Let’s encourage private investment instead!

 

Over the course of Australia’s history, what drives living standards to rise?

 

Low tax and low tape that drive entrepreneurship, private investment and innovation.

 

As I’ve often said, if people like my Great Grandfather, James Nicholas, and his friend , Sidney Kidman, had today’s tape and tax, they would have taken closer to 10 lifetimes, to build the roads, inns, stations and create the jobs that they did in their lifetimes!

 

And just think of my own father’s lifetime, where he had to wait more than 9 and a half years in the prime of his life, given the governments wrongful then view that Australia would be importing iron ore by 1965 , and the state liberal government delayed for another one and a half years, after the federal export embargo was lifted in 1960, with all that meant to ore price contracts.

 

Without such a delay, surely that standard gauge railway dad and his friend Sir Joh advocated, would be built across Australia, with maybe even steel mills each side, close to impossible now with all the tape involved. And again, just think of all the extra revenue and opportunities that would have provided.

 

The Pilbara, through a world scale endowment of iron ore, has taken the lead in helping to carry our state and nation through covid. Port Hedland is the world’s largest bulk export port, and the largest revenue earning port in Australia.

 

The creation of an IDZ here with streamlined regulations and taxation incentives on income and investment would see people being attracted to live in Pilbara towns, encouraging new businesses, and more investment. Look what over regulation has done to investment levels in Australia, we now have far more regulation than under the socialist Whitlam government, and proportionately less private investment than Australia enjoyed back then also!

 

Even China has special economic zones, and look what they’ve helped to do for their economic growth and living standards, since the first one in 1978! What a springboard such zones have been to China, just look at their incredible, spectacular growth!

 

Australia needs an investment boom in the wake of the pandemic, and given our trillion dollar debt, Australia needs practical initiatives like IDZ’s that will foster a boom in investment. Cutting tape and taxes and allowing Australians to get on with building their lives and our country with less government in the way is a vital part of this.

 

On the eve of the pandemic, the World Economic Forum’s 2019 Global Competitiveness Report ranked Australia as 80th out of 141 countries for the burden of red tape. In addition, Australia has the second-highest business tax rate in the OECD at 30%, well above the average rate of 23.6% across the group of 37 countries.

 

What could a IDZ do to help make our Pilbara coastline even more productive and efficient?

 

Here are just some examples;

 

Attract investment for a private dry dock facility for servicing of tugs.

 

There are many tugs in the Pilbara and they have to be sent to Singapore every two years for servicing/maintenance. There are other uses for a dry dock in the Pilbara that would attract new businesses and have a multiplier impact on the Pilbara. Dry dock cuts costs and improves security and self-reliance.

 

Expand container shipping. Container port facilities provide access to a range of goods that currently have to go through Fremantle or even east coast ports and then long road transport. Costly road transport would be reduced, thereby cutting costs and time, increasing productivity and efficiency of businesses in the Pilbara. Container ships don’t use the same tides as iron ore carriers – as they have shallower draft.

 

OEM manufacturing /assembly of equipment in the Pilbara (industrial area) that is manufactured around the world in different locations, shipped to Henderson where it is assembled and then broken up again and trucked in parts of our north. Examples, crushers, stackers, reclaimers, Westrac equipment. Onsite Pilbara assembling facilities would provide access to a range of goods that currently have to go through East coast or Fremantle ports and then road transport to the Pilbara.

 

More efficient supplies, cutting costs, would help to make new investments more attractive and the multiplier effect continues.

 

ANDEV made a comprehensive submission to the House of Representatives Select Committee on Northern Australia in 2013 and appeared in a public hearing before the Committee urging what ANDEV then called a Special Economic Zone (SEZ) be implemented across Northern Australia. In September 2014 the House of Representatives Select Committee on Northern Australia recommended in its report that “the Australian Government conducts a full investigation of the potential and practicality of special economic zones in Northern Australia.”

 

In 2013 all major parties supported running towards that election supported ANDEV’s policies for a SEZ to be implemented in our north. A white paper was drawn up, but not implemented, now, with a trillion dollar debt, falling investment, rising inflation, and the continuing consequences of covid, isn’t it time we drew from success and implemented a SEZ or several across our north?