Why the government won't solve the rural crisis
BY SUE BOLAND
There are two rural crises in Australia. One is an economic and social crisis: the majority of people in rural and regional areas face decreasing living standards. The other is a political crisis for the major political parties.
Large numbers of people in regional and rural areas have turned away from the Liberal-National Coalition. They have elected right-wing independent federal and state MPs, voted for the One Nation party in federal, Queensland and NSW elections, and helped elect the Victorian Labor government. Morgan and ACNielsen opinion polls are showing the Labor Party with greater support than the Coalition parties in regional and rural areas.
The Coalition's loss of electoral support is due to people's disenchantment with its economic agenda of privatisation, economic deregulation and cuts to government expenditure.
During the 1980s, the federal Labor government argued that such restructuring would result in the private sector taking over and running basic services more efficiently. After experiencing more than a decade of such policies, combined with the ALP's wage restraint policy, many working-class voters withdrew their support from Labor at the 1996 federal election.
At the same time, many Coalition supporters in rural and regional areas, believing that the ALP government was the source of their problems, had high hopes that the new federal Coalition government would offer solutions. Their hopes were soon to be dashed as the Coalition pursued the same policies as the previous government and was clearly no more committed to improving the lives of rural people.
The most impoverished sections of the rural population began to question privatisation. This was quite a turnaround from the 1980s when a large section of that population accepted that private enterprise could carry out government services more efficiently.
Since then, rural and regional residents have seen that the closure and privatisation of government services has resulted in a net loss in services. Private enterprise has not replaced or maintained those services. The withdrawal of banking services, particularly, served to reinforce the lesson that the bottom line for business is profit, not service.
While many rural voters in the 1980s railed against government spending, today there is widespread understanding that problems with telephone maintenance in rural areas, for example, are a result of Telstra employing too few technicians in these areas. Rural and regional voters gave the Coalition parties a drubbing in the 1999 NSW election.
In rural and regional NSW, there is much opposition to competitive compulsory tendering. This system was first implemented by Jeff Kennett's Coalition government in Victoria. The state government forces local councils to put all their services out to tender, even when the council already employs workers to provide those services. Because many private contractors pay their workers less than council workers, they win the tender and the council workers lose their jobs. The local council is usually the biggest employer in small country towns, so the loss of council jobs has a severe effect.
Ruling class worried
The loss of support for the economic rationalist agenda among a section of the Coalition's traditional voter base has the ruling class worried. Conservative rural voters have often been used as a foil against militant unions and progressive social protest movements.
Because employers and self-employed people make up a larger percentage of the labour force in rural areas (11%) than in the big cities (5.9%) or in Australia as a whole (7.8%), governments have often relied on rural voters to support pro-business policies.
An increasing number of rural self-employed people, mostly small family farmers, have become impoverished, with living standards no higher than many of the workers living in country towns. The impoverishment of small farmers and workers is the basis for the rural dissent which is threatening to block the sale of the rest of Telstra.
To regain credibility with these voters, the central council of the Queensland National Party passed a motion in early April calling on its federal MPs to vote against the sale of the next 16.6% slice of Telstra. Worried that Prime Minister John Howard's government might buckle under the pressure, the Australian Financial Review, the Sydney Morning Herald, the Australian and the Daily Telegraph have all published editorials warning it not to abandon "economic reform". Some have even questioned whether there is a rural crisis.
The Human Rights and Equal Opportunity Commission believed the level of rural poverty to be serious enough to produce a report on it in 1996, "The human rights of rural Australians". It pointed out that the United Nation's International Covenant on Economic, Social and Cultural Rights included the right to an adequate standard of living.
Rural inequality
Poverty does not affect all sections of the rural population equally. There is an increasing division between a small number of rich farmers and the rest. Australian Bureau of Agricultural and Research Economics (ABARE) found in 1992 that an average of 80% of agricultural produce came from 20% of farms. In intensive industries, such as dairy, pig and poultry farming, 90% of produce comes from 10% of farms.
Suffering from the effects of increasing farm input costs, lower commodity prices, the removal of guaranteed minimum price schemes and the deregulation of marketing boards, farm profits have been slashed since the Howard government came to power in 1996. According to ABARE's "Australian Farm Survey 1998", 64% of farmers made a loss in 1997-98, virtually the same proportion as in 1996. Smaller farmers bore the brunt of the losses, while the large operators snared healthy returns. ABARE's 1999 broadacre farm survey found a widening performance gap with only 31% of farms earning more than $50,000.
A 1998 ABARE report found that 40% of farmers involved in cropping, sheep, beef or dairy farming earned off-farm wages, which accounted for 59% of their families' incomes.
The total number of farms is declining. Between 1979-80 and 1989-90, the number of agricultural enterprises fell by 2.8% each year. A total of 51,302 farms closed in that period. Farm closures continued at a rate of 1.4% a year between 1990-91 and 1996-97.
Rural workers
Workers in rural and regional areas are also feeling the pinch. Although the total agricultural work force increased marginally (0.5%) between 1991 and 1996, this figure disguises big declines in dryland farming areas and the inner pastoral zone.
Most rural workers confront an official unemployment rate that is, on average, almost double that in the cities. However, the true level of rural unemployment is higher because many workers move to the city to look for work, and farmers looking for off-farm work are not counted in the official unemployment statistics.
Incomes are generally lower for workers in rural and regional areas. For example, Australian Bureau of Statistics figures for NSW in 1997-98 show that the mean weekly income for Sydney was $749 but only $545 for the rest of the state.
Often, the only available work is casual work or work at piece-rates. Workers often feel constrained to accept pay cuts or forgo pay rises, as the National Textiles workers did, in the hope preserving their jobs.
Even companies that are raking in the profits, such as Telstra, exploit the wage differential between city and country workers. Telstra has announced its intention to concentrate call centre workers in areas where lower regional rates of pay can be introduced.
In addition, rural workers face discrimination in the Industrial Relations Commission. IRC wage guidelines allow for "wage flexibility" in depressed regions when it is considering minimum rates of pay.
Cuts to services and amenities — hospitals, doctors, dentists, post offices, ambulance services, Medicare offices, schools, employment services, Centrelink offices, train services and banks — affect everybody living outside the big cities.
Loss of services has fuelled anger across the class divide in the countryside, uniting farmers, small business people, workers and pensioners. Most of the anger is only passively exercised through the ballot box but there is always the potential for a protest movement to develop.
Diverting attention
Howard hopes that Aborigine bashing by government ministers can tap into deeply held racist attitudes in rural regions and divert attention from the government's lack of action to address the rural crisis.
Howard does not acknowledge that Aborigines are the most impoverished section of the rural population. When Howard pontificates about the importance of rural people, his statements imply that they are white.
The government's other tactic is to offer token concessions in the budget. It hopes to defuse rural anger without abandoning the key elements of its economic program.
Despite deputy prime minister John Anderson's announcement on March 2 that the government's goal is to bridge the economic and service gap between city and country by 2010, its policies simply tinker around the edges.
The federal Coalition continues to implement a rural restructuring package, titled "Agriculture Advancing Australia", that aims to eliminate "unviable farmers" from the industry.
Intent on progressively withdrawing the state from the provision of public services, the government has ruled out using the budget surplus to restore public services. Instead, it is hoping that people in rural and regional areas will be content with Regional Transaction Centres, which provide basic personal banking, phone, fax, post and Medicare services.
The government has also announced a scheme to retain general practitioners in country areas, the establishment of a "fly in, fly out" female GP service, the establishment of two rural Centrelink call centres in Maryborough (Queensland) and Port Augusta (South Australia) and a commitment to more spending on infrastructure.
However, the catch is that the money for these programs is tied to the sale of the next 16.6% slice of Telstra. Other promised infrastructure spending is dependent on the government being able to continue its program of selling other assets, such as Australia Post. The higher prices and reduced services that will result will increase rural poverty.
Further "labour market reform" will result in lower wages for rural workers and the introduction of the GST, will also have an impoverishing effect.
There are measures which could be taken to reverse rural poverty, but the Coalition government's only interest is to shore up its rural voter base. It will provide what it hopes are just enough carrots in the federal budget to regain the support of rural voters.
Beyond that it will continue implementing policies which further impoverish rural people. It will also continue to play up to anti-Aboriginal racism to create convenient scapegoats for country people's problems.