Special economic zones can be defined as specific geographic areas offering particular incentives, for a defined period of time, to businesses and industries which physically locate within the zones. Incentives have traditionally been provided by governments with the aim of revitalizing or developing a particular area. The scope of the Committee's inquiry into special economic zones was limited to the types of tax and financial incentives that could be provided by the State Government.
The Committee received evidence from a number of stakeholders advocating the establishment of special economic zones in New South Wales. This evidence proposed that special economic zones should be established in one of a number of different types of regions across the State. These could be broadly categorised into three types of regions – border regions, disadvantaged regions and growth regions (in most cases, those advocating for special economic zones suggested that they should be implemented in their own local region).
The economies of border regions in New South Wales are affected by cross-border anomalies in regulations and taxation. The Committee heard that differences in State taxes and regulations, including those affecting licences, trade qualifications, planning and transport, have a significant impact on the competitiveness and economic development of border regions. A number of stakeholders to the inquiry proposed that special economic zones be established in border communities to address these issues.