Prime Minister Tony Abbott has not ruled out special tax zones and concessions for the economic development of northern Australia.
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Mr Abbott appeared in Darwin today to announce the terms of reference for his Northern Australia White Paper, due to be handed down within 12 months.
A taskforce within the Department of Prime Minister and Cabinet will prepare the White Paper with input from the Prime Minister, the premiers of Queensland and Western Australia, and the chief minister of the Northern Territory.
Both major parties pledged to promote northern economic development during the last federal election, with then-Labor leader Kevin Rudd vowing to cut the company tax rate in the Territory by a third.
The proposal was dismissed as a "pie in the sky" idea by the Northern Territory government and criticised by many economists.
Mr Abbott was less sceptical in his announcement on Friday, telling reporters "There are some forms of tax concession which would be under constitutional prohibition but obviously if it's constitutionally acceptable, and there are some things which are constitutionally acceptable, there would be no reason why it couldn't be looked at by the White Paper.
"I don't want to pre-empt the work of the White Paper. I don't want to pre-empt the work of the Northern Australian parliamentary committee chaired by Warren Entsch but I do want to stress that this government is serious about northern development and I do want northern development to be a preoccupation of both sides of politics."
While parts of northern Australia have made significant advances recently, Mr Abbott said: "[T]here is so much more that can be done if we make better use of our water resources, if we make better use of our people, if we get rid of the red tape and the green tape which is still holding back development and if we complement all of that with appropriate infrastructure."
Northern Territory chief minister Adam Giles said infrastructure in the Territory was "around 150 years behind" other states and territories.
A Parliamentary Joint Select Committee on Northern Australia, chaired by Queensland MP Warren Entsch, has also been formed and will report in July.
