THE Australian government has some tough times ahead of it, with high profile businesses either downsizing or exiting our shores altogether.
The flow-on effects from the imminent end of the Australian motor industry and from the Alcoa closure are going to be tough for the government to keep a lid on, especially in areas such as Geelong in Victoria. However, it needs to view the business opportunities that can now be opened up.
The big multinationals held the Government to ransom in regards to funding packages, threatening to shut down shop on their big-employing businesses unless they received a swag of assistance.
In the end, as Treasurer Joe Hockey suggested in the case of Alcoa, which was the beneficiary of $40 million in aid from the former government just two years ago, it has basically proven to be money down the drain.
And yet, on the other hand, you look at examples of private – public partnerships in the agricultural sector and you see massive returns on investment.
Just last week in the Wimmera, Bayer launched its new breeding facility, in which it has invested $14 million and which will create 20 jobs. The State government has chipped in a relatively small, but crucial sum of $1.24 million to improve road access to the site and looks set to be handsomely rewarded for its investment.
This sort of model shows the huge potential in not only agriculture but in regional Victoria.
And rather than have all your eggs in the one basket, throwing vats of money at industries that are struggling to operate in a global market, why not help small to medium sized businesses in ag?
It’s a field where Australia is internationally renowned as being competitive in spite of high labour costs and a variable climate. Risk is spread and rather than just investing in businesses to keep people out of the dole queue, there is a real pathway to massive growth opportunities.
Across rural Australia there are scores of innovative operators with great ideas that will be highly competitive once they get up and running.
Only the crippling lack of capital that is afflicting the rural sector is stopping these businesses seizing the opportunities in front of us in the Asian century.
It seems to me that some of the funds freed up from propping up businesses crippled by fat cat executives and apathetic union bosses could easily generate some real excitement in agriculture.
The spin-off benefits are endless, once private investors can see the opportunities present perhaps they will overcome their aversion to ag’s earnings volatility and focus on the fantastic long term returns.
Jobs in rural areas will take the pressure off capital cities on the brink of infrastructure collapse and investment will also allow businesses to make sure they take the opportunities on our doorstep with both hands.