THE National Party claims to represent the interests of rural and regional Australia. While it has merged with the Liberals in Queensland, elsewhere it exists as a separate party and holds a number of regional seats. The federal Minister for Agriculture in a Coalition government is invariably from the National Party and the party dominates rural issues in both the national and NSW Coalition governments.
According to its website it supports private enterprise and ownership with minimum government interference in industry, commerce, production and distribution. It also claims to support lower taxes, smaller government and individual economic freedom. One of its members in the House of Representatives, George Christensen, recently made a brilliant speech in opposition to the nanny state.
The problem is, as a party it does not practice what it preaches. As a result, it does regional Australia a major disservice.
Karl Marx defined socialism as ‘social ownership of the means of production, distribution and exchange’. He was not referring to some kind of farming collective, but to ownership by the government. Socialism means government ownership.
You might think a party that believes in private enterprise and smaller government would therefore be quite opposed to social ownership. Not the Nationals.
The NSW government has floated the idea of privatising the State-owned electricity grid via a 99 year lease. The initial proposal is to lease 49 per cent of the network, but the rest is expected to go in due course. The objective is to use the funds raised, estimated at up to $15 billion for the first half, to pay for essential infrastructure. In case anyone needs reminding, NSW has a huge budget problem and cannot afford to pay for the massive infrastructure backlog.
Members of the National Party in NSW have been vociferous in opposition to the proposal and, as a result, Essential Energy, the supplier to rural and regional areas, is likely to remain socially owned. The funds raised for infrastructure will be reduced accordingly.
The party claims that privatising Essential Energy will threaten local jobs, reduce infrastructure maintenance and cause an increase in prices. These are emotive rather than fact-based claims, designed to appeal to low information voters. If fewer employees and less maintenance are adequate to provide the service, why should prices rise? And since when has the public service been more efficient at running something than the private sector?
But even if the claims were right, opposing privatisation is a lot more harmful to the people the party purports to represent. Regional areas are in desperate need of infrastructure investment and, given what it is, the private sector is never likely to provide it. The negative consequences are far greater than any disadvantage that might arise (and probably won’t) from private ownership of electricity distribution.
The key to prosperity in most regional areas is a healthy agriculture sector. If farmers are making money, the benefits flow through to the entire community. There is not much the government can (or should) do about commodity prices or the competence of individual farmers, but there is a lot that can be done to reduce external costs and regulation. These can have a massive effect on profitability.
Infrastructure is a glaring example. There are dozens, probably hundreds, of country bridges in such poor condition that trucks cannot use them to transport wheat, wool or livestock to markets. Journeys are therefore longer and the costs of freight higher. The government’s existing program, known as Bridges for the Bush, is severely constrained and barely scratches the surface.
The same goes for country roads. Rural councils struggle to keep many of these passable, let alone in good condition. A shower of rain is all it takes to turn some into quagmires. On others, erosion and corrugations force slow journeys and cause damage to vehicles.
No matter how efficient and competent a farmer is, high costs in getting produce to market at the right time can wipe out any competitive advantage.
There is also the rural rail network. Many grain growers will be seriously inconvenienced by the decision of GrainCorp to close 72 grain depots, many due to inadequate rail infrastructure. The company notes that if the government were to invest in upgrading the rail network, returns to growers could increase by $10 a tonne.
The National Party was vociferous in its opposition to the company’s takeover by American company Archer Daniels Midland earlier this year, notwithstanding ADM’s offer to invest $250 million to upgrade storage terminals and rail facilities. You have to wonder if it consulted any farmers before coming to that position.
If the National Party were to adhere to its own principles, which I share, it would embrace the privatisation of the electricity network with open arms. Indeed, it would apply pressure to the government to ensure it maximised the proceeds. And having done that, it would then use its leverage within the Coalition to ensure that a sizeable share of the proceeds was used to upgrade the infrastructure that holds back the competitiveness of our farmers.
Australia’s economy relies on agriculture and mining, and rural and regional Australia deserves a voice in our parliaments. What it doesn’t need is a voice that promotes social ownership.