Wednesday, May 25, 2005

Does the world owe farmers a living?

Queenslander Barnaby Joyce has been in the Senate all of, well, eh, he's yet to take office, actually, but he manages to attract the sort of attention that most of the red-leather seat warmers can only dream of. Today, he made the front page of The Oz with a crackpot proposal for "zonal taxation":

Queensland Nationals senator-elect Barnaby Joyce and Queensland colleagues have suggested their own long-term solution: generous tax concessions in regional Australia to attract infrastructure investment.

The Queensland Nationals, who will play a crucial role in the Senate from July 1 after helping deliver the Coalition a majority, say flat and favourable tax rates in depressed rural areas would breathe new economic life into the bush.

Mr Joyce, who is championing the "zonal taxation" proposals, argues the tax initiative would be cost-neutral because it was the fastest way to turn welfare recipients into working taxpayers.


The proposal continues in a long tradition of the city subsidising the country. Many of the beneficiaries of this proposal - and the current 'drought rescue' package going through Cabinet - are farmers who have seen many good harvests in recent years, yet have set aside insufficient funds to cope with tough times. In the same way that businesses in the city need to plan ahead for uncertain times, bush dwellers can't expect to be bailed out because the sun shines too much. Besides, many of these farmers are working in highly wasteful and unprofitable fam sectors, and there would be little lost if they were to leave farming and use their resources more productively in other ways.

There is the small problem, of course, that the Joyce proposal might not be consitutional (Section 51 - The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to:- (ii.) Taxation; but so as not to discriminate between States or parts of States). But never fear, the Queensland Nationals were never too phased about Constitutions, the separation of powers, that sorta thing. Right, Sir Joh?

This proposal is a dud, but at least it's an innovative dud.

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BJ: Now we know why he's smiling.

1 comment:

Jeremy said...

Hmmm, where were you getting your info on the constitutional argument? I don't think it would apply here. I've studied the discrimination doctrine, and it's generally aimed at negative treatment of states (eg. legislation trying to stop industrial disputes in the queensland electricity industry) Further there are a number of exceptions to it, such as if the legislation has to affect a particular part of a state to work then it's OK (such as the acquisition of a part of NSW for Jarvis Bay naval base). I would think a nation-wide subsidy of farming land would fall in the latter exception (if the doctrine would even apply), even though Queesland might happen to benefit most b/c of its farming land. I could be wrong tho.

Also I have my own tax reform ideas on my blog, which unfortunately seems to be down right at the moment. They're somewhat less silly than Barnaby's.