If Treasurer Jim Chalmers is serious about giving the Australian tax system its biggest shake-up in recent times, he could do worse than considering the establishment of a special economic zone for Cape York, says editor Lyndon Keane. Photo: Michelle Kroll.
Cape York is different kettle of fish to the rest of the country and needs to be treated as such by our political masters in Canberra if we are to have a prosperous and economically diverse future.
The announcement on 17 June by Diatreme Resources that its Cape Flattery silica mine had been designated Major Project Status by the Federal Government is a big win for the company and the south-eastern Cape York communities set to benefit from its development, but the odd project getting support from Canberra and Brisbane here and there doesn’t go far enough.
In fact, I think sweeping changes are needed to ensure any business looking to establish itself in an area as geographically and economically remote as Cape York is afforded every opportunity to flourish thousands of kilometres from the urban hubs of the country that usually garner the most love from policy makers.
It’s pretty evident Treasurer Jim Chalmers has his ambition set on being the one to give Australia’s tax system the biggest shake-up it’s had since GST was introduced in July 2000.
Dr Chalmers told the National Press Club last week that “no sensible progress can be made on productivity, resilience or budget sustainability without proper consideration of more tax reform”.
Here’s an outside-the-box tax reform concept that doesn’t involve a ridiculous proposal to put unrealised capital gains from high-worth superannuation accounts in the crosshairs: transform Cape York into a special economic zone (SEZ) to stimulate economic growth and development in one of the remotest spots in the country.
SEZs provide local and overseas businesses with incentives to invest in new ventures and infrastructure through reductions in tax and regulation, and while the former Darwin Trade Development Zone failed more than 20 years ago due to excessive government interference and minimal genuine carrots for investors, the concept has the potential to be tailored for our unique circumstances if the Federal Government is genuine in its desire to give productivity a much-needed kickstart.
Running a small business is tough going at the best of times, but when you factor in the curve balls operating on Cape York throws at entrepreneurs, setting up a SEZ begins to make more sense. I’m talking about the cost of freight to provide goods and services, remuneration and housing challenges with recruiting and retaining staff, and the fact many are forced to generate 12 months’ revenue during the months of the year the region is accessible to a broader client base – our southern visitors.
The potential of a Cape York SEZ is something I’ll be flagging with our new Leichhardt MP, Matt Smith, to see whether he can fly the idea up the Parliament House flagpole and get the Treasurer and Prime Minister Anthony Albanese to salute it.
For our fish and chip shops, manufacturers and fabricators, roadhouses, tourism operators and myriad other Cape York businesses we all know and love, there is no denying a helping hand is needed that acknowledges and offsets the incredible challenges – financial and social – associated with running a business up here, challenges I suspect most metropolitan business owners would tremble at the prospect of having to overcome on a daily basis.
If Dr Chalmers and the political puppeteers in Canberra are serious about giving Australia’s productivity a can of Red Bull, especially in remote areas, they need to ensure business operators have an equitable playing field. Hell, when you’re talking about Cape York, the first thing to do is ensure businesses up here and in our cities are actually playing the same sport. The establishment of a Cape York SEZ would go a long way to achieving this, and make our backyard somewhere a diverse range of businesses could flourish for generations to come.
