Lettersby News WeeklyNews Weekly
, June 2, 2001
One hundred years ago, when the first Commonwealth Parliament met in Melbourne, the crucial division was between Free Traders and Protectionists. Today the issue of free trade verses protection is back on the agenda. Its resolution is not assisted by the way the work of Mark McGovern was expounded in your pages (Pat Byrne, "The facts behind the rural revolt", NW, May 5, 2001).
I do not doubt that McGovern's figures are accurate, but they are largely irrelevant, because of the definitions of exports and domestic consumption.
McGovern's work is in danger of being misused and misrepresented, as it was in your article.
Sugar and beef are two simple examples.
According to McGovern, 99.9 per cent of the Australian sugar crop is sold for domestic consumption. He regards the sale of cane to sugar mills operating within Australia as domestic consumption.
Canegrowers know they are producing for export, not domestic consumption. If the export markets were closed to Australian raw sugar, the mills would not be interested in taking the growers' cane.
This (rather than temporary insanity) explains why the canegrowers, together with the other interests in the sugar industry, asked the government to remove the sugar tariff.
On McGovern's analysis, live cattle exports are agricultural exports, but cattle sold to an export feedlot or an export abattoir are not. The feedlot and abattoir are within Australia; the sales are "domestic" consumption.
Cattle producers know that the price they get from an abattoir or a feedlot depends on the export demand for beef. If the export markets disappeared, there would be little demand in this so-called "domestic" cattle market.
In making these points I do not dispute the integrity of McGovern's analysis, merely the use to which it may be put.
The debate within the Queensland National Party about the value of the export market did not reveal the "facts" behind the rural revolt.
It did reveal that the official agencies have not done the analysis that would show the dollar value to primary producers of export sales verses domestic sales.
McGovern's work does not answer this question.
The work done by ABARE shows that (by volume, not value) exports account for 72 per cent of the nation's wheat crop, 65 per cent of beef, 98 per cent of wool, 56 per cent of milk and 19 per cent of pork production. By any practical reckoning, these are significant figures.
McGovern's work does indicate that processors of primary products for export (and associated intermediaries) may have a greater stake in export markets than the primary producers themselves. But this does not make the primary producers any less dependent on export markets.
Dr McGovern's paper shows that 63 per cent of raw sugar was exported in 1993-94 (page 242), not 99.9 per cent.
News Weekly attempted to keep what is a complex statistical analysis as simple but accurate as possible.
Estimates of the value of the export market of food and fibre production range from 22 per cent (McGovern estimate) to 30 per cent (Customs House Agreement).
Regardless of what is the most accurate figure, the statement of the Customs House Agreement that "the ABARE and NFF (80 per cent) export figure has no basis in fact", stands in principle.
Government policies based on the grossly underestimated domestic market for agriculture are having serious ongoing effects on farmers and their attitude to the National Party.
of S.E. Asia?
May I express my relish at Tony O'Brien's absolutely splendid critique of Laurie Brereton's asinine attempt to equate the Maginot Line of France 1940 with George W. Bush's present missile initiative (News Weekly, May 5, 2001).
Brereton's rantings were the more absurd for being delivered in an academic context.
Brereton showed once again that where defence and foreign affairs are concerned, the ALP remains long on rhetoric and bereft of regional practicalities.
The sterile vocabulary of impotent collective security and UN engagement recalls very clearly the Anglo-French appeasers of Nazi Germany in the 1930s.
In this part of the world the ALP has replicated the same species of appeasement towards Indonesian outrages in East Timor and West Papua for at least a quarter of a century.
I remain both appalled and amused by the ways ALP loudmouths have repeatedly gone into abject grovel mode towards Jakarta while repeating the fatuous fiction that Indonesia is a "friendly" state in the region.
From Brereton there is no change in policy direction towards regional realism, merely the same spray of mealy-mouthed verbal fairy floss coupled with crass ignorance of inter-war French military and other history.
Bungles Brereton is plainly not the Talleyrand of South East Asia - rather Tweedledum to the lamentable Alexander Downer's Tweedledee.
The Wall Street Journal (May 4) pointed out that the process of globalisation had not been to the advantage of Australia.
The article is one item of a growing body of evidence, that globalisation is not providing the economic miracle that our major political parties expected it to produce; rather, the opposite is the case for countries such as Australia.
The US-based Centre for Economic Policy Research (CERP) examined the statistics for 27 developed countries. They compared two periods -1960-1980 and 1980-2000.
Of the 27 countries the research shows that 22of them had substantially lower growth rates since 1980 when deregulation began in earnest. The growth rate for Australia fell from 62 per cent to 51 per cent.
This report is one of a number from different organisations which clearly show that our Federal Government as well as the opposition Labor Party appears to be out of step with reality.
Their policies are based on what is believed to be incorrect information and assumptions.
A continuance of the policies by the Liberal, Labor and National parties can only result in further destruction of the economy and irrelevance in the international market place.
The entrenched beliefs by the leadership of these parties will result in further erosion of job opportunities, with more people being thrown out of work as time goes by.