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Why Katter is campaigning to save the farm - Opinion

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Why Katter is campaigning to save the farm - Opinion article image

Cross bench federal parliamentarian Bob Katter is vehemently opposed to “exporting” Australian farming land and is equally opposed to selling off key Australian infrastructure assets.

Many Australians support and applaud his views, questioning why Australian Governments seem so keen to sell off prime Australian farming land. At the same time, governments tell us farming exports are central to a “bright Australian future.”

Similarly, many question why Governments continue to sell off Australian public infrastructure assets and with it all the revenues and cash flows that benefit the Australian taxpayer and consumer.

Once the asset is gone the likelihood is that it will be gone forever.

Surely, it is the height of Governmental folly to grab a quick buck today while ignoring the longer term. Farming acreage in Australian hands producing agricultural exports, creating Australian jobs, paying Australian taxes cannot be an undesirable outcome.

To those who question or oppose a “sell off the farm and the family silver” mentality the typical response is that Australia needs the foreign investment to grow. Those who do not agree with such vague motherhood spin are derided as protectionists.

Community benefits

Australia does need investment, it would be hard to find anyone who disagrees with such a premise, but – and it is a big but – only if that investment creates Australian jobs instead of exporting them and generally adds to the common wealth of the Australian citizenry in terms of local taxes paid and community benefits derived.

As the outgoing RBA Governor Glenn Stevens recently warned, not all foreign investment and asset selling is beneficial for Australia.

Clearly the benefit/valuation modelling for foreign investment needs to be reviewed.

Even so, at the very least we should explore further some of the arguments and rationale put forward to support carte blanche foreign investment in Australian assets.

  • The farming land requires investment to be developed and without this investment land would be an unproductive or a minimally productive asset.
  • Mining operations require bulk investment from offshore investors or the mine would remain undeveloped or no mines would be developed.
  • Selling off public assets (such as ports, water and electricity) provides the Government a large cash injection which can then be spent on other allegedly “modern” infrastructure or used to pay down Government debt.

As most foreign investors purchase fully operational farms and farming enterprises the very idea that foreign investment is somehow critical to creating productive farming land is sheer nonsense.

Cheap labour

Some consideration could be given to the investment required in upgrading ageing plant/equipment and other farming materiel such as gates and fences or a farmer trying to extricate himself from difficult to service debt by selling out.

However, the reality is quite another matter. Many foreign investors and particularly those with third world wage rates import most machinery and even steel and fabricated products from their home country.

In some cases rural farm workers are brought in from overseas as indentured cheap labour, and no local taxes are paid. The end result is that export values diminish and no Australian profits are retained.

Any exports the farm produces are either taken from the local supply chain thus driving up local prices or is an export that would have occurred anyway through Australian ownership.

Bottom line the international investor has gained a cheap supply of food but one that is in effect subsidised by the Australian community. In the final wash-up Australia gains next to nothing.

Strategic national assets

Mr Katter’s Australian Party is keen to protect strategic national assets of economic significance like farmland and water from excessive foreign ownership.

His party’s stand has resonated with many Australians.

If an asset such as a port or an electricity generating network is sold off for a top dollar price to offshore interests the new owner(s) will squeeze out a profit by raising prices and hitting consumers.

Alternatively, if the asset is sold for a bargain basement price and for well below fair and/or intrinsic value, why sell it off at all?

Toll roads are a useful case in point. Governments take upfront cash payments for granting a monopoly to the builder/investor where mega profit outcomes and profits are virtually guaranteed – all paid for by the Australian consumer. 

Such economics are quite medieval and pre-industrial in structure.

Debts return with astonishing speed

If Governments were to wisely use the funds gained from selling off the “peoples” assets such as paying down debt that would stay down or investing it all in other much needed infrastructure it might all be somewhat sustainable.

But instead debts return with astonishing speed to higher levels than before. As much if not more is spent on Governments frittering money away on various patronage schemes and getting themselves re-elected than on useful expenditures.

The issue here is not whether to do or not do, or any binary type choice. Reality is far more nuanced than that.

A modest overhaul of foreign investment laws and policies to focus clearly on ensuring Australia is not exporting Australian jobs and easy money profits to the foreign investor while getting very little or nothing in return.

Surely our Governments would not need to be told that?

Many believe Mr Katter has something valuable to add to this debate, let’s listen rather than denounce. It may very well be to Australia’s benefit.

David Gray is lead consultant at BizTechWrite suppliers of white papers, economic modelling data, geopolitical analysis and position papers. David can be contacted at biztechwrite@gmail.com

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