Economy & Industry
Special Economic Zone
A Special Economic Zone could kick start the regional economy. Regional Queensland mining and agriculture generate billions of dollars in government revenue and economic activity.
Rising costs and South East Queensland government-imposed regulation are putting this value at risk. Action is needed to stimulate private investment in regional Queensland.
The KAP wants to implement a Special Economic Zone scheme to create incentives for new projects in areas with rich mineral, energy and agricultural resources.
his classification would enable the Government to provide special regulatory and commercial arrangements for things like regulated transport services, agricultural water allocations, energy supply, and royalties.
Under this scheme the North West Minerals Province would be provided with immediate classification. Other regional areas will be investigated as a matter of priority.
Regional Queensland punches above its weight but gets little in return.
Regional Queensland’s mineral and energy producing areas contribute a huge amount to the state economy. What these areas get back from the government in terms of investment in infrastructure and services is completely inadequate and disproportionate.
For example, historic estimates of Gross Regional Product show that Mackay contributed more than twice the state average and the North West contributed three times the state average.
In the 2016-17 budget, $2.65 billion was allocated to capacity enhancing investment across the state. Of this, only $147 million (less than six per cent) was allocated to projects in North and Outback Queensland.
This chronic underinvestment is leading to poor outcomes for regional Queensland. Unemployment in North Queensland is higher on average than South East Queensland and population growth is slower.
As of December 2017, unemployment in Brisbane city was 4.3 per cent. Compare that with an unemployment rate of 13.1 per cent for outback Queensland.
KAP wants a new royalty framework that ensures a greater proportion of royalties are re-invested into the regions in which they created. We also want $1 billion allocated over the next three years for new large scale infrastructure projects in North Queensland.
Royalty Ramp Up
Queensland needs to look at a royalty ramp up to stimulate investment.
In areas captured under KAP’s Special Economic Zone policy, royalty ramp-up arrangements would be available to new large mineral and energy projects that can demonstrate a clear economic benefit to Queensland.
The royalty ramp up mechanism improves the chances of a project going ahead by providing an upfront royalty discount, and increasing the royalty rate over the first five years of the project. Importantly, the full royalty owed to the Queensland people is paid over the life of the project.
A royalty ramp up is required to re-start major project investment in regional areas. To ensure companies are encouraged to invest quickly, the scheme will only be available until 2025. Additionally, conditions will be attached to any royalty ramp up agreement that require using local labour and services.
Our biggest global mining competitors such as Canada utilise generous tax arrangements to encourage investment. If Queensland doesn’t offer similar incentives, we will lose our position as a global mining leader.
Rural Development Bank
Access to reasonably priced finance could unlock regional Queensland’s potential.
KAP wants to create a Rural Development Bank to accelerate rural and regional development. The bank would give businesses in rural and regional Queensland the chance to get reduced interest rate loans to expand and improve their businesses.
There are lots of initiatives across different industries that go unrealised because there isn’t access to reasonably priced finance.
The major banks underservice regional Queensland because they make more money in city areas.
The Rural Development Bank would work under flexible arrangements where it can act as the sole finance provider or complement commercial lenders willing to provide reasonably priced finance.