Barrier To Prosperity

Scares over carbon emissions and the Great Barrier Reef are driving red tape that hits regional communities across Australia, reports IPA Research Fellow Kevin You.

Red tape has rightly been described by the IPA as Australia’s biggest industry, costing this country more than 10 per cent of our national output every year. Our analysis shows that in only one year in the last 50—the first year of the Abbott government—have we seen anything other than a remorseless growth in onerous regulations. I am an economist, and continue to research the economic cost of red tape. But I also want to talk about the human cost. We must hold our decision makers and bureaucrats accountable: confront them with the impacts so many pointless regulations are having on ordinary men and women trying to run their businesses and family enterprises all over Australia.

Recently, with IPA colleagues, I had the chance to travel through regional Australia and better understand the human costs of red tape. Imagine a farmer coming home from a gruelling day of work underneath the scorching sun, sweaty and exhausted. There’s still paperwork to take care of, but most of the heavy lifting is done. He steps into the kitchen and heads for the fridge, looking forward to cracking open a cold can of beer. His 14-year-old daughter, still in her school uniform, is sitting at the kitchen table and scrolling through social media on her phone.

IPA Director of Research Daniel Wild speaking in Cairns on April 26 during the recent IPA staff tour of northern Queensland and NSW’s Hunter Valley.

“Hey honey. How was school?” he asks, partly instinctively, partly out of curiosity how her new friends Patty and Lois are treating her, and partly for a glimpse of what they’re teaching her at school—things are so different now to when he last sat in a classroom. His family has been farming the land for three generations. Things are tough and market pressure has been compounded by red tape from the State government. But he keeps going, because that’s all he can do. He hopes, one day, to pass on the farm in the best state possible to his smart, hard-working, capable kids. In recent times, though, he has started wondering whether working in the farm offers the best future for them. Maybe their best option is to head off to Brisbane—or Sydney or Melbourne—like so many young people have done from regional townships. But that’s a thought for another day. He has a can of beer in his hand and his daughter is rambling on about a party at Cheryl’s.

Reef Regs impose hardship yet provide no real benefit.

The topic shifted to her science class, in which they have been discussing climate change and environmental protection, and the impact of farming on the ecosystem. Farming, his daughter was told, is one of Australia’s largest emitters, accounting for 15 per cent of the nation’s carbon dioxide (CO2) emissions—the toxic CO2 warming the planet and will lead to the end of humanity as we know it. Moreover, farming is, apparently, directly responsible for killing the Great Barrier Reef. The World Wildlife Fund’s Australian arm says:

Nitrogen from farm fertiliser run-off poses a major pollution risk to the Great Barrier Reef. Nitrogen [in fertilisers] … can run off into waterways and … lead to algal blooms, feeding juvenile crown of thorns starfish, which multiply to plague proportions. These starfish are responsible for over 40% coral loss on the Reef … Pesticides and herbicides … [also] pose a further risk to marine plants and animals.

The farmer does not know what to say. He has done the best he can to comply with punitive State environmental regulations—compliance to which is having a massive impact on the productivity of his land. He is not aware of the research refuting WWF’s claims, and is unaware of the mounting statistical and photographic evidence that the Great Barrier Reef is, in fact, thriving and enjoying record levels of coral coverage. After all, he has not had the time to check out the reefs for himself. Work on the farm is intense and an extra pair of hands is not easy to come by. He is tired, gets defensive, and ends up in a heated dispute with his daughter. His evening is ruined. Sadly, this is the lived reality faced by too many farmers in Australia’s heartland: the people responsible for the milk in your breakfast cereal, that produce the sugar in your afternoon treat, and raise the beef in the burger you had for lunch.

My IPA colleagues and I embarked on a tour of northern Queensland and NSW’s Hunter Valley throughout April and May this year. We visited communities in Cairns and Townsville; then drove down to Mackay, Ayr and Bowen in the seat of Dawson, and stopped by Rockhampton and Gladstone. Then we went to the Hunter Valley to visit Delta Electricity’s Vales Point power station on the shores of Lake Macquarie as well as the nearby Origin Energy’s Eraring plant, the largest coal-fired power station in Australia. Our last stopovers were the city of Newcastle and town of Singleton, an hour’s drive away from the city centre, where we spoke to candidates vying to replace Joel Fitzgibbon as the Federal Member for Hunter.

The first reason for this tour was to disseminate our research on net zero and the Great Barrier Reef, and share these findings with those most affected by it. For instance:

• North Queensland will suffer a $66.58 billion cost in foregone economic output and cancellation of 125,000 jobs, thanks to net zero.
• The Hunter will suffer an $11.5 billion cost in foregone economic output and see the cancellation of 21,800 jobs, thanks to net zero.
• Despite alarmist statements by activists such as the World Wide Fund for Nature Inc (WWF), the best available evidence suggests the reefs are in a fantastic state.

The second reason was to talk with locals and listen to what they have to say. Leaders of major political parties like to use places such as regional Queensland and the Hunter as a backdrop for media events, at which they announce big commitments to spending taxpayers’ money and make big promises they cannot keep. Much is said about the value of the local community, yet governments continually pump out rules and regulations detrimental to rural productivity, place undue pressure on people such as cattle farmers and cane growers, and yet are ineffective in achieving intended outcomes.

Farming and mining communities are dwindling.

One example is the mania for ‘carbon credits’. This is why farmlands and parcels of land rich in fuel resources are being bought off by large firms, often from overseas, and simply locked up—unused. Locking up land rich in potential generates carbon credit certificates, an artificial commodity that can then be traded in the securities market.

A discussion paper released in May by the Australia Institute, for example, finds that the Commonwealth Government’s $4.5 billion Emissions Reduction Fund (ERF):

… has not only failed to reduced (sic.) emissions, but its foundations have begun to crumble … up to 80 per cent of the 108 million [Australian carbon credit units] issued to abatement projects under the ERF since 2012 have no integrity.

The outcome of such practice, on the ground, is that farming and mining communities are dwindling, our arable land less productive, and regional economies negatively impacted.

The rush to renewables is a huge concern for locals in the Hunter that not only harms coal miners and powerplant operators. Small businesses such as pubs, hotels, and local bakeries are all indirectly dependent on income from large employers such as coal-fired power generators and the mines that supply them with their fuel. These are the very mines that the ERF is incentivising investors to lock up for carbon credit certificates. The ERF is not the only pointless initiative of the political class. The Environmental Protection (Great Barrier Reef Protection Measures) and Other Legislation Amendment Act 2019 (Qld), commonly referred to as the Reef Regs, is yet another poorly considered set of rules that imposes a lot of hardship yet provides no real benefit to the environment. The regulations were created to impose additional record-keeping requirements and red tape around agricultural activities in various parts of Queensland, the apparent aim of which is to reduce the amount of farm chemicals entering the waterways and eventually ending up in the ocean, harming the Great Barrier Reef.

But research by Dr Peter Ridd, IPA Adjunct Fellow and the head of the Project for Real Science, has found that “… the levels of farm pesticide concentrations on the Reef are so low they cannot be detected even with the most ultra-sensitive scientific equipment”. The Great Barrier Reef is teeming with life and is in terrific condition. More regulations changed nothing. The only thing the Reef Regs successfully delivered was political goodwill towards politicians from activists in the inner city, with regional Queensland generally and affected farming communities in particular once again paying the price.

The Vegetation Management and Other Legislation Amendment Act 2018 (Qld) is yet another concerning piece of legislation which, the Queensland government itself admitted, was drafted without stakeholder consultation. The regulatory burden it imposes on farmers for the removal of invasive woody weeds from farmlands means many farmers are facing the prospect of losing large chunks of their land. The flow-on effect from this is dire. Farmers are feeling powerless in the face of increasing regulatory burden and as a result their mental health is suffering. These farmers shoulder the custodianship of their land, handed over by generations of their forefathers. When the regulatory impediments to the productivity of their land are so severe as to force them to consider shutting down their farms, it takes a toll on their mental as well as financial wellbeing. It is not a surprise, then, that depression and anxiety are rife in regional Australian and the rates of illicit drug use, alcohol abuse, smoking, and other harmful coping mechanisms are more prevalent in the regions than in the cities.

Environmental red tape is not helping.

Regulatory burdens are not the only contribution to the alarmingly high rate of depression and mental health issues in regional Australia. Our conversations with farmers confirm physical, geographical, and social isolation (including those imposed by the State during the pandemic) also play a significant role. But environmental red tape—including rules that do nothing for the environment they purport to protect—is not helping. In fact, it worsens the situation. So, rather than improving the health of the ecosystem, the new wave of ‘green tape’ is harming the health of the individuals on whom we rely for our day-to-day needs.Then there are the State-sponsored ‘self-regulatory’ initiatives such as the Smartcane Best Management Practice program, or Smartcane BMP for short. BMP programs like Smartcane (for sugarcane plantations) and Grazing (for the beef industry sector) are voluntary certification schemes which, according to the Queensland Farmers’ Federation, were implemented in order to:

… drive productivity and profitable outcomes [while at the same time] demonstrate environmental and natural resource stewardship, mitigate biosecurity risks, and support other activities that benefit the landholder.

The problem is that BMP programs sometimes just don’t work. For instance, while Canegrowers (Queensland Cane Growers Organisation Ltd, a representative body for sugarcane farmers) spoke very highly of Smartcane, AgForce (a peak organisation representing Queensland rural producers) estimated that compliance with Smartcane standards can reduce productivity by up to 30 per cent. Moreover, although signing up to BMP programs is meant to be voluntary, AgForce’s representatives informed us that farmers who do not sign on have been punished through stricter audits on their farming practices. These audits are outsourced to city-based consultants who show no understanding of farming practices and the ways farmers already demonstrate custodianship of the environment in which they operate. In an article on the AgForce website, their Reef Taskforce chair Alex Stubbs wrote:

It isn’t the fear of being ‘caught’ that worries [farmers] (they’re already adhering to the litany of regulations imposed upon them), it’s the attitude of the officers—condescending, with a non-courteous, non-diplomatic approach—and the fact that they’ve been singled out, that so many feel the presumption of guilt before things even get started.

Not so sweet: Reef Regs are making life hell for Queensland cane farmers.
Photo: Denisbin/Flickr

These ordinary people cannot comprehend why they continue to be so relentlessly portrayed as environmental vandals, despite all their hard work to the contrary. Both Canegrowers and AgForce provide a consistent account of how farmers are treated by the said environmental police. Aside from this, agricultural producers are also terrorised by the prospect of further heavy-handed regulatory measures, thus leading many farmers (and their collective associations) to relent to the pressure and sign up for their respective BMP certification programs. Even so, AgForce estimates only a small percentage of farmers are still committed to their Smartcane BMP accreditation—and the majority who did are not even compliant because the requirements are unrealistic. The wave of new environmental regulations, as well as veiled threats about what is still to come should farmers not fall in line, are creating uncertainties and anxiety among farmers … so much so that many have simply given up. Farmers feel they have done their best to do the right thing and abide by regulatory requirements; but the government continues to shift the goalposts, especially come election time, to satisfy the demands of its inner-city base.

Accordingly, the sentiments I picked up in our conversations, especially with cattle and sugarcane farmers, are of defeat, dejection, and fear, with the fear being that the next regulation will be the one that breaks them. No wonder hundreds of farmers have shut up shop at the earliest opportunity; no wonder young people see no future in agriculture. For a landholder, an offer to sell and lock up your land to produce carbon credit certificates becomes more and more attractive as State regulations increasingly restrict what you can do to and on your own land. Moreover, the political tactic of divide and conquer, engaged by inner-city elites against farmers is also taking its toll on the sense of camaraderie among producers in the agricultural industry.

Pressuring peak bodies to support and even push for environmental targets such as net zero and certification practices that have the potential to damage productivity, for example, takes away a key element in the farmers’ support network. When the head of a collective association meant to support and represent you seeks to compel you to do things that harm your family’s livelihood, it becomes difficult for you to figure out where else to turn. The said bodies may not necessarily decide to accept their positions as a de facto arm of the State in their respective sectors for self-serving reasons.

Governments must listen to the people they regulate.

Often they, like many farmers, are fearful of what comes next and, consequently, simply seek to appease the policy-makers from the inner city. After all, at least self-regulation still allows some degree of control by the farming community. When the alternative is an iron-fisted mandate, perhaps ‘self-regulation’ at the industry level is not so bad. Nonetheless, many farmers still feel betrayed and increasingly suspicious of one another. But dejected as they may be right now, this does not have to be the new reality of our era. Environmental alarmism and the mountain of red tape with which it comes need not be the dominant force shaping the regions.

The IPA is committed to researching the real impact of red tape and green mandates on regional communities. The Queensland government needs to repeal the Reef Regs and start listening to farmers on vegetation clearing and other issues such as the management of farm chemicals. Specifically, they need to listen to farmers on the ground, not just peak bodies several levels up. As the Green Shirts movement note in its support for Katter Australia Party’s effort to repeal the reef regulations:

Often, industry bodies fail to capture the nuances pertinent to the individual producer. Filtering through peak bodies often lead to a dilution or bias. It must be remembered the vast majority of producers by choice are not represented by peak bodies. This should not preclude them from having a say should they wish to exercise their democratic right.

Governments also need to listen to people who are actually involved in the processes they seek to regulate. If there is an ‘expert’, it is the producer providing the crop or coal or beef. More needs to be done to address the blatant disrespect of the political class in the big cities, demonstrated through their exclusion of stakeholders from consultation regarding the very rules the elite class is seeking to impose on them. It is also time State and Federal education ministers listen to the concerns of our parents about our children’s education. The national curriculum must stop indoctrinating our children with messages of climate alarmism and assertions based on junk science (such as on the state of the Great Barrier Reef). We need to take education out of the hands of politicised interest groups and return it to parents.

The agricultural and energy generation sectors are the backbone of Australia. The political class’s continuous assault on them will not only hurt regional communities, but also its inner-city constituents in the long run through food shortages, inflation, and power crises. Getting rid of ‘net zero by 2050’ is the way forward.

Learn more about the IPA’s net zero research at ipa.org.au/netzero and sign up for updates.

This article from the Winter 2022 edition of the IPA Review is written by IPA Research Fellow Kevin You.