August 17, 2013
Jacob Greber and Matthew Dunckley
The Australian Financial Review
Gina Rinehart, one of former treasurer Wayne Swan’s primary targets in his tax war against mining magnates, enthusiastically backed Kevin Rudd’s northern development proposals.
The iron ore billionaire founded a lobby group devoted to promoting economic development in the north, Australians for Northern Development and Economic Vision, which encouraged the Coalition to propose its own development plan for the region.
“Congratulations [to] all involved, and please deliver exciting lower tax, lower regulation policies for our north,” Ms Rinehart told the AFR Weekend while travelling abroad. “Our country truly needs some positive action to get us out of debt and help our future.
“I am ecstatic to hear that, in Australia, both major political groups are beginning to look to the future. The recognition that our north could thrive with less taxes and less regulation, is very exciting.” Some former and current Labor ministers, including David Bradbury, Craig Emerson and Simon Crean, criticised Opposition Leader Tony Abbott in February, when he announced his northern Australia development plan.
The newly bi-partisan approach is likely to please advocates who believe the rain-rich northern region could become a much bigger food supplier to Asia. But many economists think Mr Rudd’s plan for a 10 percentage-point company tax cut for businesses that move to the Northern Territory will suck away jobs from other states. Encouragement for agriculture Donald McGauchie, chairman of Australian Agricultural Company, one of Australia’s bigger landholders, said tax breaks for the north must be complemented with policies that encouraged investment in agriculture.
“It is encouraging to see some of the policies, during the current election campaign, recognising the need to attract more investment into agriculture,” Mr McGauchie said on Friday.
“Both parties now have policies that are proposing different tax treatments for northern Australia. This is by no means a complete solution.
“But it is a start to the debate, that I think we must have, about how to encourage more domestic investment in agriculture.” Canberra-based economist Stephen Koukoulas, a one-time senior adviser to former prime minister Julia Gillard, took to Twitter on Friday to blast the idea. “No one can find the gumption to commit to a new airport in Sydney, yet can find money to fund claptrap in Northern Aust. Help!!,” he wrote.
“I wonder what Keating, Button, Walsh would be thinking right now,” he said in another, referring to Labor’s former prime minister Paul Keating, former industry minister John Button and former finance minister Peter Walsh. Ex-senator Button died in 2008.
Mr Koukoulas later told the AFR Weekend he supported moves to increase the number of people living in the north, away from Sydney and Melbourne.
“But you do that through measures that are not massively market-distorting,” he said.
Courtesy of The Australian Financial Review
August 17, 2013