Advancing rural and regional Australia

Much has been written about the Asian century and how capitalising on it will be paramount to securing Australia’s future. This is as true for regional and rural Australia as it is for our capital cities. In a globalised world we can not take our future success for granted. In the course of travelling the 32,000 square kilometres of the electorate of Wannon one of the most common refrains I hear regards “the cost of doing business”. Our local businesses understand that if they are to compete in the 21st Century it means not only competing locally but internationally as well. They understand that if your business costs mean you can’t compete on the world stage, your long-term future is bleak.

Regional and rural Australia exports a significant proportion of what it produces. Success in foreign markets often depends as much on what we do at home to enable producers to export as it does on increasing access to foreign markets. The Gillard Government has failed this test on both fronts and it is an imperative that, if elected, an Abbott led Coalition government get both right.

Improving our competitiveness

Australia’s agricultural sector is a good example. It is one of the most competitive in the world and continues to look for innovative ways to improve its productivity, but the competition is still tough with European and United States producers supported by subsidies.

Under Labor, the re-regulation of the workforce means farmers now have to employ someone for a minimum of three hours to help with a job which may only take an hour and thirty minutes.

The carbon tax adds escalating electricity prices to the mix. Our meat, dairy and wool producers are all facing increased costs. The average farmer in Western Victoria has had thousands added to their electricity bill thanks to the “there will be no carbon tax under a government I lead” broken promise.

The carbon tax is also hitting our agricultural manufacturers. Abattoirs are sending carcasses overseas by air for final processing because the carbon tax has made it unviable to do so in Australia – costing us local jobs. It is the great shame of this Gillard Government that it is willing to export Australian jobs while Australian producers and manufacturers are priced out of the game. Dairy processor Murray Goulburn has publicly stated that the carbon tax is adding $14 million per annum to its bottom line, and because the majority of the milk we sell is on the international market, nearly all this cost will be passed back to Australia’s farmers.

Then there is the Australian dollar. The four largest budget deficits in Australia’s history have not only seen our net debt balloon above $160 billion, but also have done nothing to put downward pressure on interest rates. While rural businesses in Europe, the US and Japan enjoy rates below 1.5 per cent, the reserve bank is reluctant to make further cuts in Australia. This means our rates remain attractive for overseas investors, keeping demand for the dollar high.

Not to mention the $7 billion we are now paying each year to the service this $160 billion debt. Think of the productive improvements we could be making to our rural and regional roads, our rail freight and our ports with that money. Sadly, Labor’s debt and deficit approach has an enormous opportunity cost.

As the list grows we also can’t forget the Gillard Government’s inclination to default to the anti-trade attitudes of the Greens: the damage of the knee-jerk ban on live cattle exports; the threat to our World Trade Organisation credentials from the passage of the Illegal Logging Bill; and the introduction of legislation that would have given Canberra the right to ban all types of fishing for export had it been passed unamended.

As a result of the live export ban and the Illegal Logging Bill, Indonesian senior government figures are muttering about retaliatory restrictions on Australian exports. They have reportedly slashed the quota for imports of beef from Australia, despite the fact that in areas of Indonesia beef prices are rising out of reach of local people.

All of this is adds up to a Labor government lumping cost upon cost on our local businesses, making it harder and harder for them to generate the jobs our local communities need.

Unlike Labor, the Coalition understands that regional and rural Australia can compete. That is why, if elected, we will introduce a range of short and long term measures to improve rural and regional Australia by fostering productive and competitive industries.

Scrapping Labor’s shambolic carbon tax is the first step towards maintaining Australia’s competitiveness. We will not sell out Australian industry and future generations of Australians. Dairy farmers in my electorate can be assured that an incoming Coalition government will not engage in the absurdity of leaving Australian dairy processors “hung out to dry” while their European Union competitors are given an allocation of 93 per cent of their carbon permits for free, on top of the subsidies they receive.

The Coalition will also get the budget back under control and start paying off Labor’s debt.

The Coalition understands that leaving Australians unemployed under the guise of ‘fair work’ is nonsensical. The Coalition is not about cutting the working conditions of Australians. However, the Coalition is committed to removing the disincentives for small businesses employing people in rural and regional Australia and helping small businesses expand by eliminating unnecessary regulatory burdens.

We are also committed to an evidence-based approach to infrastructure investment. Particularly, we will use the expertise of Infrastructure Australia to evaluate infrastructure spending proposals on the basis of published cost-benefits analyses. Whether it is constructing or maintaining our roads, rail lines or ports, Australian taxpayers can be assured that their tax dollars will be treated with the respect that they deserve and that spending will be directed to drive economic growth.

Finally, we will not impose the anti-trade policies of the Greens on our trading partners. Ultimately, the Coalition understands that a trading relationship is precisely that – a relationship. The answer is to offer to work with our trading partners to solve the domestic issues which foster problems, such as illegal logging, rather than engage in heavy handed, self-destructive strategies to ban their trade and foster ill-will.

What we see time and again is that when you have your principles right, the right policy follows. The Coalition has a plan for rural and regional Australia – one that builds on our strengths, drives competitiveness and ensures that we are not left behind in a globalised world.

Improving access to markets

Improving our competitiveness at home is vital but it is equally important to ensure our regional and rural exporters can access markets at a reduced cost. Tariffs, duties, subsidies and import taxes all hurt our competitiveness so gaining improved access to overseas markets is the second plank of securing the future growth of our regional and rural businesses.

With the two largest economies in the world, the United States of America and the European Union, agreeing to start negotiations on a Free Trade Agreement, Australia must continue to secure improved access to global markets or our exporters risk being sidelined.

Once again in this area we have seen the Gillard Government fail. In the last five years we have not seen any meaningful progression on the Doha Round of trade negotiations. Although the Prime Minister was able to enhance the dialogue between Australia and China on her recent trip to Beijing, she all but admitted failing to advance negotiations on a Free Trade Agreement. When you couple this with the lack of progress on Free Trade Agreements with Indonesia, India, Japan and South Korea, our acquiescence to trade and environment and trade and labour standards being included in the Trans-Pacific Partnership negotiations, the Gillard Government’s record is nothing short of pitiful on the trade front.

What then should an Abbott government do in this area? While the World Trade Organisation and the Trans-Pacific Partnership must remain key priorities, we should immediately move to finalise bilateral agreements with two of our key markets – Japan and South Korea.

It is 56 years since the new dawn in Australia’s commercial relations with Asia took place with the signing of the Australia-Japan Agreement on Commerce. In this, the so called ‘Asian century’, it is time to mark the next chapter of our relationship by redoubling our efforts to conclude Free Trade Agreements with Japan and South Korea.

The reasons are simple. Firstly, the domestic political climate in both countries is favourable to concluding an agreement, especially when it comes to negotiating an agreement on agriculture. Secondly, given our high dollar, it is absolutely vital we continue to lower market access costs for our exporters. Finally, due to the complementarity of the two markets with our own, the benefits to Australia will be significant in the three sectors which drive our export performance in regional and rural Australia – agriculture, mining and services.

So what issues, if elected, should an Abbott led Coalition government look to move on when negotiating to finalise agreements with these two important markets? Two of the most intractable issues are meaningful movement on agriculture and the inclusion of an investor-state dispute settlement provision, which protects companies investing abroad from host government legal or policy changes which expropriate investor property.

For reasons only known to her, in April 2011, Julia Gillard ticked off on a policy change opposing the inclusion of investor-state dispute settlement provisions in future Australian trade agreements. Japan and South Korea want this dispute settlement mechanism included in an agreement and if they are prepared to give ground on agriculture, it beggars belief that Australia would not move on this issue.

Under Julie Bishop’s stewardship the Coalition has taken the sensible and pragmatic approach of stating that we would consider investor state dispute settlement provisions on a case-by-case basis. If the inclusion of such a provision resulted in meaningful market access gains for our farmers, why wouldn’t we agree to it?

The other important step an incoming Coalition Government could take would be issuing an invitation to both Leaders to visit. By issuing such an invitation immediately to Prime Minister Abe of Japan and President Park Geun-hye of South Korea we would sharpen the focus on the importance of an agreement and get all sides working towards a successful outcome.

Japan will continue to be our second largest export market in the years to come and South Korea is a crucial market for our beef exports in particular. Upgrading our commercial relations with both countries is long overdue and should be an immediate priority if the Coalition wins power.

Conclusion

Reducing costs for our regional and rural businesses both at home and abroad is vital if they are to remain competitive in a globalised world. This can be done in two ways, by improving our domestic policy settings and acting to reduce the cost of exporting. The Gillard Government has clearly failed in both of these areas but the Coalition stands ready to immediately address these failings if we are given the chance to do so at the next election.

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