How 'productivity' is destroying rural Australia

April 4, 2012
Blue sign against a blue sky that reads 'productivity'.

Behind the hype of Australia’s mining boom and “economic stability” lies the very real crisis affecting rural Australia.

The impacts of droughts and floods (aggravated by capitalist-induced climate change) are part of the explanation. The real culprits behind the devastation being wreaked on rural communities are big business and the free market fundamentalists running the country in their interests.

And unless a fundamental shift in priorities takes place, the situation is set to worsen.

Speaking at the annual Outlook conference organised by the Australian Bureau of Agricultural and Resources Economics and Sciences (ABARES) on March 7, business consultant David McKinna said the Australian food industry is undergoing one of its most profound structural shifts ever (archived by Internet Archive 21/03/2012).

The March 8 Australian reported that he said (archived by Internet Archive 08/03/2012): “And it is regional Australia and small country towns that will bear the brunt of this shift; jobs will go, schools will close, the local doctor will leave and there will unfortunately be suicides — we are talking about a massive social impact here.”

McKinna said the “immense power” of Coles and Woolworths — which together control 80% of the market — was responsible for the fact that “multinational food companies are being driven out of business” and relocating offshore. He also pointed to consumers chasing cut-price specials as a contributing factor.

But McKinna’s outlook confuses the symptoms for the disease.

These problems are the logical outcomes of the profit-at-all cost policies being pursued by state and federal governments, regardless of the party in power.

Take, for example, the January closure of the Heinz tomato factory in Girgarre, a town of about 150 people in the Goulburn Valley, Victoria.

In May last year, Heinz announced it would close down Australia’s second last tomato processing plant and transfer its operations to New Zealand.

The move left 146 people without a job -- and this is just the tip of the iceberg. Overall job losses are expected to be closer to 700 due to the run-on effect that the closure will have on the 53 suppliers.

Writing in the March 11 Age, Gary Tippet said locals were angry: “The place was running efficiently, making money. About eight years ago, according to [former Heinz worker] Ken Covington, it was the most profitable site in the global Heinz empire and one of the most profitable in Australia.

“‘We could understand why they’d shut it,’ says his wife, Ruth. ‘I think they threw a dart at the map.’”

Heinz Australia’s explanation has been to garble some nonsense about “productivity initiatives to accelerate future growth”.

For the free market fundamentalists, who place “productivity” above all else, responding to meet community needs is out of the question. The federal Labor and the state Liberal governments have sat on their hands.

All local Liberal Federal MP Sharman Stone has done is issue vague calls for “financial support” for Heinz (which has already received a number of government hand-outs) and pretend that the factory closure was due to the yet-to-be-introduced carbon price.

The only response, it seems, that the state Labor opposition could muster was to call on the state government to ensure government caterers no longer used Heinz tomato sauce.

And the best local state MP Paul Weller from the Nationals (the so-called party of rural Australia) could come up with (archived by Internet Archive 21/03/2012) was his May 30, 2011 promise “to ensure the transition for workers into other industry and jobs is as smooth and as painless as possible”.

The problem, of course, is that decades of “productivity” focused policies in Australia means this “smooth” transition is impossible.

Whenever governments and bosses talk about “productivity” what they are really defending is slashing jobs, wages and conditions to boost corporate profits. The costs of “productivity initiatives” are always borne by workers.

This is not just the case with Heinz. The Goulburn Valley has been hit hard by the loss of 600 jobs in the six months leading up to March, following the closure of several other fruit and dairy factories. Add to this the impact on producers and other affected industries and you can see what the pursuit of “productivity” has led to.

And as Tippet noted in his Age article, the future holds more pain for these communities.

Take the example of Chris “Dickie” Lloyd, who worked at Heinz for 18 years. Lloyd has found new work, but he told Tippet that his income has fallen by $4 an hour — close to $15,000 a year.

“I’m grateful for the job”, Lloyd said, “but the thing is, you haven’t got sick leave, you don’t have holidays or super, you don’t have all the trimmings of a permanent position, and that adds up.”

Lloyd is not alone, as all the other former Heinz employees that have found jobs have done so as casual placements and it is seasonal work. Lloyd said: “Seasonal work you go seven days a week, you work hard, no certainty, and you’re in there for a couple of months and out and into the great big casual pool again.”

A recent ACTU survey found 40% of workers nationally are engaged in insecure work arrangements such as casual work, fixed term work, contracting or labour hire, all of which are essential ingredients in an economic strategy focused on “productivity”.

Then there is the string of job losses in other industries.

“Sometimes you wonder what’s going on in this country,” Simon Fraser, another former Heinz worker, told The Age. “Alcoa, the car industry, jobs lost everywhere. Every time I open the paper now it’s, ‘I know what those poor bastards are going through.'”

This is a big part of the reason why most Australians are forced to buy the cheapest products they can find at the supermarket. They struggle to pay off mortgages and rising bill costs at the same time. And it’s why Coles and Woolworths, who control so much of what we can buy, are raking in the profits.

These are the consequences of Labor and the Coalition’s commitment to make working people in the city and country pay for capitalism’s never-ending drive to accrue more profits.

The fate of rural communities, workers' lives and the food we eat are too important to be left in the hands of market fundamentalists who profess the virtues of “productivity” at all costs.

What is needed is an emergency plan that can turn this situation around — one that is premised on placing people's lives before profits.

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