Rudd offers rebate to offset tax anger

Andrew Probyn and Nick ButterlyThe West Australian
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Kevin Rudd has sought to soothe WA anger at his plan to slash company tax for Northern Territory-based companies by promising Labor would consider zonal tax rebates for the north of the State.

But there is concern within the ALP that the plan, which was announced without Cabinet consultation, is symptomatic of a chaotic election campaign.

And tensions between the Rudd travelling team and the ALP's Melbourne headquarters may worsen with news that the Government is in trouble in some key marginal seats.

A poll by JWS Research for the Weekend Financial Review in the Queensland seat of Forde shows the ALP's recruitment of Peter Beattie may have backfired, with the sitting member ahead of the former premier 60 per cent to 40 per cent on a two-party preferred basis.

It is understood that internal Liberal polling shows the coalition on track to take at least three Victorian seats from Labor.

Mr Rudd, who flew out of Perth last night for Adelaide, said he was proud of his NT tax policy which would have businesses based in the Territory pay just 20 per cent company tax from 2018, down from 30 per cent.

"The Northern Territory is where we'd like to see special economic zones start first," he said.

"The reason for that is constitutional reasons.

"Secondly, we said in the States you could look in the northern parts of WA and the northern parts of Queensland at zonal tax rebates."

Only Treasurer Chris Bowen, Finance Minister Penny Wong and Deputy Prime Minister Anthony Albanese had forewarning of the policy. It is understood that ALP campaign headquarters was surprised Mr Rudd nominated a particular figure given the policy only refers to reducing corporate taxes for NT-based businesses either through an offset or a rate cut.

Premier Colin Barnett has attacked the policy, saying it disadvantaged WA and put development in the Kimberley at risk.

Resources Minister Gary Gray, who was seen having an animated conversation with the Prime Minister's chief political strategist Bruce Hawker after a press conference with Mr Rudd yesterday, disputed suggestions that the policy would lead to WA companies moving to the NT.

"I don't think Woodside will be dismantling its building and carrying it brick by brick to Darwin," Mr Gray said.

"The point of the announcement yesterday was to give people a pointer and a marker of the policy direction."

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