Special Economic Zones. National Economic Development Conference Darwin - 30 th October 2014

Transcription

1 Special Economic Zones National Economic Development Conference Darwin - 30 th October 2014

2 What is an SEZ A Special Economic Zone is a geographical region designed to export goods and provide employment. SEZs are usually exempt from certain national laws regarding taxes, quotas, foreign direct investment (FDI) restrictions, labour laws and other limiting laws in order to increase the competitiveness of the SEZ. SEZs are called different names including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), industrial parks or Industrial Estates (IE), free ports, free economic zones, and urban enterprise zones. SEZs are used extensively across the world as a means to unlock the economic potential of regions. 2

3 SEZ s Engines for Growth Over 5,000 SEZs in 130 countries Increasingly being established in developed economies, including OECD nations Accelerated employment and GDP growth Variety of successful business models None in Australia plenty of proposals but none have progressed 3

4 Developed Country SEZ s 4

5 Why Is There No SEZ In Australia? Australian SEZ s = 0 Our export and import trading partners have SEZ s and they are highly successful Our politicians and bureaucrats believe we compete on a level playing field Several proposals for an SEZ over the last 2o years (Darwin, WA, North Qld) but none have moved beyond the Federal Government assessment phase 5

6 Australian Export Destinations Rank Country # of Zones 1 China 2, Japan 2 3 USA South Korea 2 5 UK 8 6 New Zealand 3 7 India approvals 8 Singapore 40 9 Taiwan 5 10 Thailand 32 6

7 Australian Import Source Countries Rank Country # of Zones 1 China 2, USA Japan 2 4 Singapore 40 5 UK 8 6 Germany 8 7 New Zealand 3 8 Malaysia Ind parks 9 South Korea 2 10 Thailand 32 7

8 Project Need Many Australian and international businesses wish to take advantage of the opportunities available in Regional Australia: However, the isolation and cost structure of many regions has constrained investment and employment outside of the direct resources sector. For Regional Australia, economic development and diversification through an SEZ framework will ease ongoing cost pressures, insulate the region against the commodity cycle, and provide greater lifestyle options and amenity. For Australia this will lead to a more stable and competitive resources sector. One that is better able to coexist with the broader economy during the upcycle, and is able to sustain output and operations during the down-cycle. 8

9 Integrating With Asia Through An SEZ There has been a lot of talk about the Asian Century Gateway to Asia Food bowl of Asia and the list goes on but how do we really achieve this as opposed to all the rhetoric? SEZ s in Regional Australia that are linked to other SEZ s in our major export and import partners is the most logical way to start integrating our industries with Asia. 9

10 Australia s Competitiveness 10

11 Key Factors in Locating an SEZ Political stability Economic stability Skilled workforce Open and efficient regulatory regime Strategic time zone Economic and social infrastructure Proximity to key markets Competitive economic environment 11

12 Key Ingredients Of An SEZ 12

13 Potential SEZ Outcomes Economic Constraints Target SEZ Policy Outcomes for the Region Labour Supply Establishment and Operating Costs Volatile, Cyclical Economy Critical Population Mass Extended regional Skilled Migration Agreement Increased Zone Tax Offset for permanent residents Reduced company taxation, transfer duty, and payroll tax One-stop-shop for streamlined development approval Temporary incubator office space for business start ups Reduced company taxation, transfer duty, and payroll tax Extended regional Skilled Migration Agreement Increased Zone Tax Offset for permanent residents Reduced cost of operations Increased investment in the nonresources sector Improved services / amenity Increased economic diversity and stability Improved skills base Broader business opportunities for population driven sectors Broader employment opportunities for families, indigenous Outcomes for Australia Increased employment, economic opportunities More competitive, stable resources sector 13

14 Global SEZ Success Based On Business focused operating environment Regulatory certainty Streamlined approval processes Business flexibility Financing and other support Cluster benefits There is a wide variety of SEZ models throughout the world so lets look at a cross section 14

15 Hainan Special Economic Zone 15

16 Shenzhen Special Economic Zone 16

17 Cumberland County Empowerment Zone 17

18 Discovery Park Enterprise Zone 18

19 Lessons For An Australian SEZ One Stop Shop within the Zone is critical Form an International Consortia to both develop and manage the Special Economic Zone. Create an enabling environment with banks available for new ventures. Define the SEZ to cover significant geographic areas where there is a logistic interface between key infrastructure elements essential to their survival. A separate Legislative Act which gives autonomy to manage its own operations and development program in accordance with agreed values and objectives, set by the Government. 19

20 Lessons For An Australia SEZ The formation of targeted Industry Clusters within the SEZ An incubator is essential for more remote locations The creation of a world standard Infrastructure and Services Model Focus initially on Local and State incentives limit Federal involvement 20

21 Contact Carey Ramm Principal Economist Townsville 233 Flinders Street East Townsville QLD 4810 W: Bangkok 1103/1, Level 11 Glas Haus Building Sukhumvit 25, Wattana, Bangkok Townsville Brisbane Sydney Melbourne Perth Auckland Bangkok Ho Chi Minh Shanghai - Manila 21