Beating the Bush Blues

The Rural Revolt

The Hon. Philip R. Davis, MLC

Recent developments in politics at both a Federal and State level have indicated disillusionment with governments across the electorate as a whole, particularly in rural electorates. Important factors in this situation are declining terms of trade for rural industries, and the trend towards globalisation.

Rural citizens believe that they are being left behind because economy of scale inevitably means that smaller and isolated communities are not afforded the same access to services as major cities.

Voting patterns over the last couple of decades indicate a loss of support for major political parties and increasing support for minor parties and independents.

This became very evident at the 1999 State Election in Victoria, when three independents were returned in Legislative Assembly seats---a result not seen for 40 years.

The Productivity Commission October 1999 Report, "Impact of Competition Policy Reforms on Rural & Regional Australia", highlights some of the issues which have affected the perceptions of rural constituents:

  • Growth in coastal communities compared with a population decline inland and associated with declining industries.
  • Provincial cities (or "sponge cities") growing at the cost of smaller towns and farms in the region.
  • Country people have lower incomes relative to those in the cities, and the difference appears to be increasing.
  • Educational attainment is lower and the unemployment rate is higher in country Australia.

Broad long-term economic forces which are beyond the control or influence of governments have been key drivers of the economic and social changes of particular relevance to country Australia. These include:

changing technology and increasing productivity; rising incomes and changing lifestyles; and declining world agricultural and mineral commodity prices.(1)

Victoria's 1999 election was decided in rural and regional seats---eight of eleven seats lost by the Liberal Party were outside Melbourne. The biggest swings were in the non-Melbourne seats, including the two Gippsland seats---Gippsland East 22.9 per cent and Gippsland West 16.6 per cent (compared with 1996 Election results).

The National Party sustained an average swing against it of 10.4 per cent compared with the average swing of 5.4 per cent against the Liberal Party in the country.

Prior to the election there was an overwhelming impression that the Kennett Government would be easily returned. For example Nicholas Economou from Monash University concluded that "The Kennett era in Victorian Politics looks set to continue for some time yet".(2)

 

Problems and Opportunities in Rural Victoria

Rural Victoria faces the same issues now as have been evident for many years: declining terms of trade for primary producers, and declining real incomes for many rural towns, leading to declining populations and the collapse of community infrastructure. Against this, it was evident that rural Victoria has significant unstated advantages. Rural towns and provincial cities offer a quality of life which compares favourably with large cities. Proximity to education and health services, lower accommodation costs, and compactness for access to day-to-day needs are just some of the advantages enjoyed in rural areas.

Numerous opportunities exist for economic development in rural Victoria, especially now that commerce is increasingly reliant on information technology rather than person-to-person communication.

There are significant economic development opportunities for communities as a consequence of the development of information technology. No longer is it necessary for many businesses to be located in the CBD of Melbourne. They may locate in surroundings which have advantages arising from the choice of lifestyle, and/or lower costs of operation resulting from lower rents and rates.

For rural communities to take advantage of the IT age, telecommunications infrastructure needs to be improved in many areas. Points of access are inadequate and this disadvantages rural communities both socially and economically.

Although there is widespread low self-esteem in rural areas, or a poor perception about the inherent properties of lifestyle, service, and infrastructure across rural Victoria, in fact there are many advantages that are not recognised. One example is the opportunity to enhance the lifestyles of aging citizens by making use of the often very well-integrated and closely meshed community services, aged care and health sectors in rural communities, which afford high standards of assistance with very easy access to services, particularly when compared with the suburbs of large cities.

The cost of doing business in rural Victoria is often perceived to be an impediment, but in fact it can be shown that there are cost advantages for both residential and commercial accommodation costs, including land values, property values, local government rates and other infrastructure costs. There are also advantages from the stability of the workforce. Providing that transport and communication infrastructure is adequate, there can be high levels of potential benefit from investments in rural communities.

Common infrastructure in rural Victoria is often underutilised. For example, low levels of enrolments in schools, and low utilisation rates for hospitals compared with Melbourne.

There is a high degree of criticism in rural Victoria with regard to the lack of information about Government policy and programmes. This criticism is often levelled at Government Departments, local Members of Parliament and Ministers.

There is a significant perception that rural infrastructure is run down. Revised accounting principles for Local Government, which require making allowance for depreciation, have magnified the perception that the rural road and bridge network is under threat. This accounting change is providing transparency in long-term depreciation of local infrastructure. Municipalities require some assistance to deal with these challenges.

There is considerable community concern over the benefits of local government reform. This revolves principally around implementation of compulsory competitive tendering.

The fuel pricing disparity between the city and the country prices remains contentious and difficult.

Rural commodity prices, particularly for beef and wool, are having a significantly depressing effect on rural communities. Negative perceptions are developing in the dairy industry as a consequence of comparative lower real values for dairy output. Throughout areas where wool growing was the predominant agricultural activity, not only were there negative perceptions but in fact there was significant economic despair. It should be acknowledged, however, that the Government has limited ability to influence events such as these.

Some of the most common criticisms, Statewide, relate to water policy. Criticisms were based on competition between users of a limited resource, with little overall understanding of a vision for resource management. For example: northeastern Victorian agriculturalists sought to utilise waters in upper catchments while the irrigators in the Goulburn Murray districts sought to protect bulk entitlements. There was a view in Gippsland that waters stored in the Thomson Dam should be available to Gippsland irrigators in time of drought; not retained for the residents of Melbourne. Groundwater users were concerned by moratoriums imposed by rural water authorities in respect of, and approval for, further draw-down on aquifers. Concern was also expressed over community and environmental values associated with an improved environmental flow in the Snowy River versus the benefits arising to irrigators in northern Victoria and New South Wales and through the Snowy Hydro water diversions. Concern was also expressed over the application of tariffs and the role of catchment management authorities.

 

Leadership and Communities

"Big government's policy towards rural Australia has been devastating. If the profitable third of our farmers were able to represent the industry and set the agenda for debate we would hear a rural voice with constructive ideas for market access, natural resource management, macro-economic policy, market perceptions and quality assurance.

Instead, the debate is driven by the unprofitable rump---some might say agrarian socialists---who yearn for an outdated past despite a future that holds out promise. Some producers consider they have a right to farm where they were born without looking to the responsibility of supporting their own lifestyle. It would be more realistic if they filed a land claim.

The third of broadacre farms generating 70% of the output and 100% of the profits have a positive attitude to change, access to information and sound management skills. Farmers require these skills to make a profitable industry. Managing the change from being a heritage issue to a vibrant, profitable industry is the challenge.

Make no mistake about it: government can't allocate resources effectively.

Rural people have the ability, the resources and the ingenuity to be profitable and passionate about the food and fibre they produce---without government assistance."(3)

Effective local action requires effective local leadership; the growth of rural and regional Victoria is dependent on developing the potential of people so they can create and drive future opportunities.

Leadership can be fostered by:

  • Ensuring that training, skills and development opportunities are available at all levels of the community; and
  • Developing networks where local leaders can share their ideas and experience and promote opportunities across Victoria.

There is a wealth of skills and experience in rural Victoria. What we need are policies which will help provide the confidence for those communities to influence their own destinies.

Regions must foster an economic climate which will reinforce the potential, scope and advantage of rural and regional Victoria as a place to do business. Such an approach would support existing businesses as they grow, create sustainable employment opportunities and attract investment for existing and emerging industries. This needs to be combined with committed communities, supportive Local and State Governments, the efficient delivery of Government services and targeted infrastructure development.

Efficient information and communications technology is fundamental to the future development of country Australia. Technology enables international access to people and information and provides the key to encouraging communities to adapt to change in a global economy.

Government and communities have complementary roles in this field. Government initiatives must encourage demand for technologies and electronic service delivery so that carriers will develop viable support networks and infrastructure in country Victoria. To ensure this outcome, communities must accept and encourage those initiatives and create new opportunities for service expansion.

There is a need for young Victorians to appreciate that they have a worthwhile role in the development of their regions. Regions must recognise that role and encourage it by creating partnerships with industry, business and the community to assist young people to develop skills which benefit them personally and the community generally.

 

Politics: Perceptions and Realities

Politics is all about perceptions---not necessarily about actions and results.

In East Gippsland, in 1998, after some of the most disastrous floods in recorded history in that region, the State Government implemented a timely and effective recovery programme which resulted in the expenditure of $62.1 million, including an innovative farm buy-back programme to assist rural landholders hit by successive years of drought and then flood.

Despite this expenditure and the extensive presence of the Government in the region, the vote for Coalition candidates in the 1999 election plummeted by up to 23 per cent.

The perception in Gippsland, and clearly across much of Victoria, was that rural areas were not receiving their fair share of Government funding and programs.

And yet the facts were that in the area of health 36 per cent of capital works projects allocated in the State Budget were located in rural and regional areas.

In Education the figure was also 36 per cent, while 33 per cent of road expenditure and 34 per cent of the Government's recurrent expenditure was incurred in rural and regional areas. Yet these areas comprise just 28 per cent of the population.

These figures prove that the Kennett Government had its sights firmly fixed on development and the provision of essential services across the State. It did not focus its attention disproportionately on metropolitan Melbourne, although the metropolis has 72 per cent of the State's population. And many projects of necessity located in or close to Melbourne provide benefits for residents throughout the State.

One example is the $175 million Hallam Bypass, which will benefit primary producers, the transport industry and residents throughout Gippsland when they access Melbourne. It will also make Gippsland more accessible to the city.

Multi-million dollar capital works programmes to provide improved services at the Royal Dental Hospital, Royal Melbourne Hospital and the Royal Women's Hospital will expand specialist facilities that can only be located in a city, but which are of benefit to all Victorians.

Investments facilitated by the Government in rural and regional Victoria between October 1992 and June 1998 totalled more than $2.2 billion, creating 6,700 jobs and generating more than $1.1 billion in exports. The overall result was that rural and regional Victoria attracted 35 per cent of all investment facilitated by the government---even though it comprises 28 per cent of the population.

The Labor Party's election campaign in 1999 put forward little in the way of new policies. It concentrated on hospitals and education, areas in which the Kennett Government had introduced substantial reforms.

These factors will restrict implementation of important reforms for rural Australia. For instance, it is evidenced by the vigorous opposition to telecommunications reform. Given the increasing relevance of this sector to businesses, education and social interface in the regions, this is a huge threat to overcoming the inertia in creating jobs in rural Australia.



Endnotes

1. Productivity Commission, "Impact of Competition Policy Reforms on Rural & Regional Australia", October 1999.

2. This in an analysis of the period January to June 1999 published in Australian Journal of Politics and History, December 1999.

3. This is an extract from an article by Celie Moar, a grain farmer at Swan Hill, Victoria, who was the 1995 ABC Victorian Rural Women of the Year, published in Australian Farm Journal, October 1998 (originally published in the Australian Financial Review, July 7, 1998).

Why HR Nicholls?

More...