Ingrained prejudice

Bookmark and Share | Louise Staley
The Courier-Mail 14th May, 2007

Many Liberal MPs bemoan the failure of Malcolm Fraser's government to reform the Australian economy in the late 1970s. A key example is Fraser's failure to deregulate airlines, instead sponsoring a cosy duopoly for TAA and Ansett that made flying across Australia as expensive as flying across the world.

Wheat deregulation has become the two-airline policy of the Howard Government. Like the two-airline policy there is no economic or national interest justification for the continuation of a single desk for wheat.

The decision is purely political, the protection of powerful vested interests, in this case the discredited AWB and its political partners, the National Party.

A single desk is an anathema to the principles and benefits of a free market economy. It protects vested interests at the expense of Australia's broader economic interests. And the AWB has already demonstrated it is not up to the job by corruptly selling wheat with kickbacks to Saddam Hussein, and now trying to breach sanctions against Iran.

Why should wheat growers be any different from cattle producers, dairy farmers or horticulturists who export successfully without a single desk?

Only full deregulation of wheat exporting fits the idea of a government committed to free market principles. No minor tweaks, such as leasing out the single desk for three-year terms, can be justified -- especially as this model will guarantee AWB retains the desk.

In no other industry are sellers forced to sell to a single exporter. One of the ironies of this whole debate is that all wheat growers who export also profitably grow barley and canola for export without a single desk. Whether wheat producers are compared to manufacturers or to other farmers, no case can be made that wheat is exceptional and merits exceptional treatment.

What would be the reaction if all the small exporters selling their wares via the internet were forced to deliver their goods to a publicly listed export company? These are small businesses not much different in size to a viable family farm, successfully exporting all sorts of things, from toys to computer modems. And there are countless examples of small Australian enterprises selling their products through myriad distributors who then undertake the exporting. There is no special case for wheat.

Most wheat growers may want to retain a single desk, but it has never been demonstrated that most exporting growers want the single desk. Much of the wheat grown in Queensland, New South Wales and Victoria is consumed in Australia. By contrast, most West Australian and South Australian wheat is exported. Yet the biggest push to retain the single desk is coming from Queensland and NSW growers, particularly those in National Party seats.

It is morally wrong to force exporting wheat growers to sell their wheat into a national pool if they do not want to.

Industrial relations reform is not popular, but it is a vital economic reform. The unions don't like the reforms but the union movement is a constituency of the Labor Party and were always going to oppose the reforms. Yet even if business was critical, as it was with the introduction of the GST, industrial relations reform was the right thing to do. But what is the difference with wheat marketing?

The test is not whether some wheat farmers support a single desk. The test is whether it is the right thing to do. Failure to act on wheat marketing brings to mind the potent attacks by Prime Minister John Howard on his predecessor Paul Keating as beholden to vested interests.

Howard was initially elected on the slogan "For All of Us". This slogan is a repudiation of special interests in favour of national interests. In the case of wheat, the broader and much more important issue is the merit of policy, not the level of opposition by special interests.

In light of the unambiguous fact that the single desk for wheat creates a government-sanctioned monopoly, it is surprising that the only voice within the parliamentary party supporting deregulation is Wilson Tuckey's. Just because Tuckey is easily dismissed by many of his parliamentary colleagues is not a reason for those with economic reform pretensions to go missing from this debate. Tuckey is right on this and should be supported.

It is a sad state of affairs when reformers such as Peter Costello, Nick Minchin and Ian Macfarlane have only Tuckey arguing the need for comprehensive deregulation of wheat. Where are the young guns of economic reform to demand this anachronistic policy failure is removed?

History is watching the Liberals on the single desk.