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For the good of all Australians we need to rethink Australian agriculture

By Syd Hickman and Cameron Andrews - posted Thursday, 18 September 2003

It's not just the misleading of Parliament that should have true liberals throwing their arms up in horror over the latest ethanol scandal. At a time when we are being told that there isn't enough money to pay for public institutions like health, education, and the ABC, the government has happily found a further $37 million to go to subsidise a small group of farmers to produce a type of fuel motorists do not want, and which is of dubious environmental benefit.

Australian governments are sacrificing economic progress, the environment and the well-being of rural Australians by failing to lead the way to sustainable agricultural industries. Relying upon urban nostalgia for the bush, our political leaders are wantonly bidding for rural votes. The river of taxpayers' cash that has been turned inland is actually causing harm when a new approach is possible.

The conservatives who demanded the blitzing of manufacturing industries to improve national productivity are conspicuously silent on the rural sector. The ALP, having abandoned socialism in the cities is strongly defending it in the bush. So a uniting of true liberals, now dispersed among various political allegiances, is the only hope for promoting a comprehensive rural renovation.


Agriculture's significance to the Australian economy has been in steady decline - down from 30 per cent of GDP a century ago to around 3 per cent today. The number of people working on the land is also declining - down from 150,000 families in 1986 to less than 135,000 today. Many of these farmers are efficient, innovative and successful. And these productive farmers are among those who suffer most under current policies.

The problem is not a shortage of funds. In 1992, the Commonwealth and the States, in a failed attempt at reform, agreed to phase out transaction-based drought subsidies to encourage self-reliance and reward farmers who prepared for droughts. But, using the creation of a system of "exceptional circumstances", this Government actually boasted, in late July, that it was providing some form of assistance to 80 per cent of farming areas.

Drought assistance has cost more than two billion dollars over the past ten years.

Beyond the direct financial support payments for drought (and flood), there are a myriad of benefits including interest rate subsidies, tax relief, waived fees and charges, transport subsidies, and other payments.

But there are many other cash flows beyond drought relief. In a May 13 press release, Agriculture Minister Warren Truss proclaimed proudly that more than half the nation's farmers were benefiting from the government's "AAA" $800 million agriculture package.

Milk producers are on an eight-year, $1.74 billion transition to market reality. Sugar farmers are receiving $150 million over four years, paid for by an 18 cents levy on every kilo of sugar. Assistance to the ethanol industry will cost a further $37 million and motorists will get a type of fuel they do not trust.


Consider some of the other forms of largesse. A typical metropolitan council receives an annual grant from the Commonwealth of between $15 and $20 per resident: an average grant for a medium-sized rural based council is $275 per person, with many grants exceeding $500 per head.

The provision of Telstra's Universal Service Obligation costs around $400 million every year, largely focused on the bush. Now the government is committed to getting Telstra to spend hundreds of millions of dollars on a range of rural projects. Taxpayers, shareholders and customers will foot the bill.

But all this money has not solved the problems. The ongoing, unmanaged decline of some rural communities, kept from facing up to change by government policies, has led to serious social problems. The bush has a tragically high rate of suicide. In the 2003/2004 NSW State budget, Premier Carr stated that, on a per capita basis, the Department of Community Services budget was three times higher in areas outside Sydney, Wollongong, Newcastle and the Central Coast than inside that area.

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Article edited by John Carrigan.
If you'd like to be a volunteer editor too, click here.

This paper is an edited extract of a larger paper available from the Reid Group here.

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About the Authors

Syd Hickman has worked as a school teacher, soldier, Commonwealth and State public servant, on the staff of a Premier, as chief of Staff to a Federal Minister and leader of the Opposition, and has survived for more than a decade in the small business world.

Cameron Andrews, a former state president of the Democrats, is an adviser to the independent state MP David Barr and Chair of the Reid Group.

Other articles by these Authors

All articles by Syd Hickman
All articles by Cameron Andrews
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