Breaking News

U.S. May Home Prices Rise 0.4% From Previous Month: FHFA
Tweet TWEET

Rudd Plans Lower Tax Rate to Boost Northern Australia Economy

Prime Minister Kevin Rudd, seeking re-election in a Sept. 7 ballot, said his Labor government would lower company tax rates in northern Australia within five years under a plan to boost the region’s economy.

Labor would also work with the Northern Territory government to expand the Ord Irrigation Scheme, boosting output in the region by about A$150 million ($138 million) a year though increased agricultural production, including sugar, Rudd told reporters in Darwin today.

“This is a key part of Labor’s plan to keep Australia’s economy strong by creating new jobs for the future as the decade-long China resources boom is coming to an end,” Rudd said in an e-mailed statement.

Rudd and opposition leader Tony Abbott have placed management of the nation’s $1.5 trillion economy at the centerpiece of their election campaigns as growth slows, unemployment rises and mining investment wanes. Abbott, whose Liberal-National coalition is ahead in opinion polls, has also pledged to open the nation’s remote northern regions to agriculture, while mining billionaire Gina Rinehart has championed a special economic zone in the area.

Abbott criticized a lack of detail in the plan and said Labor was only just waking up to the region’s potential after six years in office.

“It is just another thought bubble,” Abbott told reporters. “He doesn’t have a plan to actually grow our economy.”

Foreign Investment

Labor’s proposal will seek to attract foreign investment by streamlining and simplifying regulation and reducing the company tax rate for Northern Territory-based businesses within five years, Rudd said.

The prime minister told reporters his personal objective was for a company tax rate one-third lower than the rest of the country.

The Ord Irrigation Scheme would be expanded to 43,000 hectares from its current 29,000 hectares.

Australia is seeking to increase the area available for farming as rising incomes and population growth in Asia boosts demand for food. That’s prompted companies including Glencore Xstrata Plc and Archer-Daniels-Midland Co. (ADM) to target agricultural assets as they seek a foothold in the world’s third-biggest exporter of sugar and wheat.

The value of Australia’s farm exports, including crops and livestock, may total A$35.8 billion in the year ending June 30, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

“The idea of a special economic zone for northern Australia has been around for decades and Abbott himself has toyed with it,” said Stephen Stockwell, a political analyst and Griffith University professor of journalism and communications in Brisbane. “The move is trying to send a message that Rudd has a big vision for Australia.’”

To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.