Tropical or just plain troppo? Coalition draft plan to encourage business in northern Australia leaked

Opposition Leader Tony Abbott is backing away from a draft Coalition plan to encourage people and business to move to northern Australia after the plan was leaked.

The plan, Developing Northern Australia – a 2030 vision, says there is "tremendous potential" in northern Queensland, the Northern Territory and Western Australia and incentives and beneficial tax rates should be provided to develop urban zones around Darwin, Cairns-Townsville and Karratha.

Fairfax reports the document recommends shifting large numbers of public servants from metropolitan areas to northern Australia, dividing the north into different tax zones and reallocating $800 million from the foreign aid budget to build a tropical health medical centre in far-north Queensland.

The plan has received support from several premiers and Nationals members as well as Queensland federal MP Bob Katter.

The plan, which is reminiscent of some of Gina Rinehart's ambitions for excising northern Australia, has been described as "wacky" by Labor.

Abbott has already played down the plan and said yesterday "it's not our policy" and emphasised the draft status of the document.

He said there is "absolutely no way" people would pay different taxes depending on where they live.

''We certainly have no plans and it would be unconstitutional to civilly conscript public servants.''

Peter Strong, executive director of the Council of Small Business Australia, told SmartCompany the plan was "a fine aspiration" but would need to be compelling to make it worthwhile for small business to relocate.

"It is well worth investigating and if there are different tax rates they should just be for small business not big business," he says.

"There is already a history of having different tax rates in different areas but you have to ensure it doesn't create an unfair playing field."

Russell Zimmerman, head of the Australian Retailers Association, told SmartCompany a focus on the north of Australia should not come at the expense of the south.

"I think it's good to see some economic vision to support the parts of our economy experiencing major economic growth, but it is also incumbent on government to stimulate growth in southern states to allow us to be more productive and take advantage in the economic boom in the north," Zimmerman says.

Zimmerman says while he has not seen the draft plan there could be a benefit to businesses and retailers in northern Australia.

"If you are going to bring people up there and more stimulus up there then it brings money and that is an opportunity for retailers," he says.