Pork weighing on Abbott’s fork

ScreenHunter_05 Apr. 15 22.08

By Leith van Onselen

The Abbott Government is once again defending claims of inconsistency around entitlements and welfare following yesterday’s announcement of farm aid and revelations that a lobbyist for the food industry was behind the $16 million subsidy provided to the Cadbury factory in Hobart.

Under the $320 million farm aid scheme, farmers will receive $280 million in concessional loans, along with a farming allowance equivalent to Newstart that will be paid fortnightly to help farmers with their daily living expenses. Around $10 million will also be spent on social services, including mental health support, as well as another $10 million for pest control.

Prime Minister Abbott has defended the scheme, stressing that the farm package is not a form of industry subsidy, but rather “is akin to a natural disaster” and that it recognises “a farmer in trouble is in a very difficult situation and in a rather different situation to most of us when we’re in trouble”.

Others are not convinced. Last week, The Australian’s Judith Sloan (also a former commissioner at the Productivity Commission) argued that a significant proportion of assistance is provided to “failing farm businesses” that never make a profit even during the good times. And today, she has backed-up her criticism, claiming the Government has “learnt nothing when it comes to providing appropriate incentives for farmers to prepare for the inevitability of drought”, and that “it is the minority of farmers who work marginal land, have land holdings that are too small or engage in unsustainable farming practices that put their hand out for government help in the event of drought”. Sloan also claims that the 4% interest rate on offer is too low to properly account for risk, and that the subsidies will likely be capitalised into property values, making the process of rationalisation – e.g. by neighbours buying-out adjacent properties – more difficult.

Sloan’s alternative is to:

…make the banks take a haircut on existing farm loans, allow marginal farmers to exit with some dignity and spend any government assistance on helping truly viable farmers cope with droughts, rather than encourage them to beg for government handouts each time a drought comes along.

While it is true that agriculture is different to other industries in that its output and survival depend primarily on the weather, pests and disease – which is not something that most other industries face – drought assistance does appear to have become a permanent feature of the sector, stretching well beyond “exceptional circumstances”.

There is also an argument that continual drought assistance has created moral hazard in farming, whereby some farms spend their profits during the good times, whilst socialising losses during the bad – a view supported by the Productivity Commission when it comes to concessional loans:

The Commission does not support offering concessional finance to a group of borrowers to induce them to borrow at a higher level than their own risk preferences would allow. A greater sensitivity to a loss of the farm due to the high non-monetary value placed on farming is rational and does not provide an efficiency case for measures to encourage farmers to take on more debt.

The controversy over the appointment of Alastair Furnival as chief of staff to Assistant Health Minister, Fiona Nash, has also escalated, with claims that Furnival – who co-owns the public relations firm, Australian Public Affairs, which has deep ties to the food industry – was behind the dubious $16 million grant provided to Cadbury in Hobart, as well as the pulling down of the healthy food labeling website as it was about to go live:

Senator Nash’s chief of staff, Alastair Furnival, resigned this month when it was revealed by Fairfax Media that he had retained ownership of a lobbying company in breach of the ministerial staff code of conduct. This followed a decision by the minister’s office to take down a healthy food website seen as hostile to the snackfood industry.

Mr Furnival had worked for Cadbury and months earlier had lobbied the Tasmanian government on behalf of the company to secure $400,000 for a visitor centre…

[It is suggested] Mr Furnival, who went on to hold a key post in the Abbott government with critical responsibility for food policy, was central to Coalition discussions resulting in a promised transfer of taxpayer funds to the company.

Mr Abbott announced the $16 million pledge during the election campaign. He has since refused to say what links he had to Mr Furnival and what role Mr Furnival might have played in brokering the proposed transfer of millions in taxpayer funds to a multinational-owned company…

Meanwhile, the ABC has reported that the Food and Grocery Council, which has opposed the food rating system site, contacted the Senator about it the day it went live. The site was pulled down the same day…

In a fiery session of the Senate estimates committee, the embattled minister revealed she had known Mr Furnival for years and was well aware of his ownership stake in the lobbying firm and links to the snackfood industry…

Australian Public Affairs had undertaken significant lobbying work on behalf of Cadbury, a company known to be hostile to an initiative using a star system to rate the healthiness of snackfoods.

The Government’s “ending the age of entitlement” is fast becoming a brand of hypocrisy. While is seeks to slash benefits to some sections of the community, those with political connections continue to receive pork. In turn, the Government’s legitimacy is being undermined, as is its admirable goal of sharing the pain of adjustment.

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41 Responses to “ “Pork weighing on Abbott’s fork”

  1. ceteris paribus says:

    Yes, always exceptions for mates but on the broader front… Full marks to Tony, Joe and Matthias- and, of course, big Tony. They have had the nation hyperventilating since the start of February. Apprehension normally only sets in a week before the budget- but the current panic is palpable.
    Tony and associates have their adversaries on the run and they know it; all over town, people are buying into the hysteria and offering concessions as quick as they can, so they can just hold onto their one favourite bit of health, welfare, education, civil society, environment etc.
    Hockey tells us that “we are going to run out of money and we won’t be able to pay for health, welfare and education.” It’s like a children’s horror story. Be afraid, little citizens, be very afraid.
    “We are running out of money”. I don’t think I have heard anything so stupid, even from untrained bookkeeper, let alone an accountant or a Federal Treasurer.
    Books have to be balanced. Yes. But Australia has more than enough money to have virtually whatever it chooses. And that is what it is all about- our choices and our priorities. As the richest generation that has ever trod Australian soil, “money running out” is not the problem.
    If “money running out” was really a problem, why did the LNP block every savings measure and initiative that Wayne put forward as he visibly sweated to clear the deficit over the last five years.
    No, it’s not about “Australia running out of money”, it is who makes money choices.
    When the BCA brings down the budget for the nation in May, it will bring down its own choices. The BCA and the LNP have played a long, unemotional and ruthless hand for the following:
    1. Less business taxes, (funded by less money for health/welfare/education/ civil society/environment).
    2. More Government and Government-supported investment for big business infrastructure projects, (funded by less money for health/welfare/education/ civil society/environment).
    3. No debt ASAP, (but only funded by less money for health/welfare/education/ civil society/environment).

    And in the longer term, outside the budget context, the BCA is and the LNP are choosing more big profits again, through lower worker wages and the stripping of conditions.
    So during this current panic, when you and I, as reasonable, decent citizens, are pondering which things we and our family are prepared to give up for the common good, remember that the BCA and the LNP are playing a cool, long game and are planning to have all their choices come true.

    • That may be true (or not) but what you’re describing is actually that the nation needs right now – improved competitiveness – and if it turns you’re right and they overdo it they’ll get booted.

      • ceteris paribus says:

        HnH,

        I am really bemused by how ecocomists have a proximal bias in thinking and absolutely fail to appreciate deep structural causes.

        Real wealth is driven by education, research, health, family security, law and societal co-operation/ethos, God-given resources in and of the soil and not by deals to dig without tax.

        You argue as if these factors I have mentioned are “mere consumption”. Sorry, HnH, these public goods are the very heart of productivity and, of course, wellness and the good life.

      • littleguy says:

        What he is saying will not improve competitiveness. It will simply entrench the oligarchy even deeper that it already is that that is the problem. It will actually hurt the economy.

  2. Muzzer018 says:

    So to be clear, there IS money for QANTAS and Cadbury, but nothing for our health system?

    ……Utter Bollocks!

    Why doesn’t fat Joe try selling us more of our own “Public assets”, that he seems to think belong to the government!

    This level of pure shite must be challenged in the public forum, where’s our media?

  3. 3d1k says:

    No purism in politics. Lobbyists facilitate government decision making. And they’re everywhere, all sides of the political divide.

    • Merk says:

      -1 (thread hijack attempt)

      • 3d1k says:

        Did you read Leith’s article?

        1) no purism in politics
        2) lobbyists facilitate government decision making

        and a reminder to the likes of you

        3) lobbyists are everywhere (inform yourself)

    • migtronix says:

      Geez maybe because theres’s no political divide!

      Whilst there may be no purism in politics must it necessarily always be so putrid? You should know the answer you’re pretty good at pilling on the putrid and intellectually dishonest. The Oz rarely offends? Only because I rarely glance at it!

      • 3d1k says:

        Mostly it’s not that putrid. Occasionally it is (NSW right and Obeid). And surprisingly, generally it works fairly well.

        Judging by most commentary here the political divide is cavernous…but yes, in reality much closer than either side want you to think.

        Read the Australian more often and you’ll see I’m right ;)

      • migtronix says:

        @3d I’ve already seen your right — they have brown shirts…

      • 3d1k says:

        I prefer preppie Polo blue.

      • migtronix says:

        Well I’m in preppie Polo red today so watch out ;)

        As for cavernous divide? Among the citizenry for sure but the lobby pigs at the through could care less they know they’re going to get the next PR contract from the Laberals what do they give a sh!t?

      • AB says:

        “Occasionally it is (NSW right and Obeid).”

        Time to get with the program 3d1k. I can understand why you may have missed it in The Australian, but it’s not just NSW Labor any more.

        http://www.abc.net.au/news/2014-02-25/nsw-government-denies-crisis-over-icac-raids-and-preselection-s/5283552

        New South Wales Premier Barry O’Farrell has defended the Liberal Party’s handling of allegations against three State Government MPs.

        Mr O’Farrell was overseas last week when the Independent Commission Against Corruption (ICAC) announced inquiries into allegations that former Energy Minister Chris Hartcher and two government backbenchers, Chris Spence and Darren Webber, solicited payments for favours.

    • General Disarray says:

      Why are you so keen to make excuses for bad decisions?

      Lobbying being part of politics has nothing to do with the fact that a government ditched a well-reasoned initiative because it would potentially cost their mates some money.

      Lobbying is fine as long as the people who are being influenced are capable of making impartial evidence-based decisions.

      What we have here is cronyism and contempt for reason.

    • Gunnamatta says:

      ‘Lobbyists facilitate government decision making. And they’re everywhere, all sides of the political divide.’

      Apologists and market/PR types explain, expiate, and generally bullshit about the beneficiaries, benefits and righteousness of those not paying, for the benefit of those who do

      3d1k is worth listening to here. He presumably is one. He even seems to be seeing a political divide.

      • Merk says:

        Gunna I’ll just leave this here:
        http://pastebin.com/irj4Fyd5

        It’s quite tin-foil hat, but still interesting prism for analysing 2d’s unrelenting input to the comments of this site.

        I’m not going to feed him anymore today.

      • flawse says:

        Hells bleedin bells…we have one person commenting who generally supports the conservative side of the political landscape. We have about 40 including the owners (well one of) of the site who come down on an anti-Liberal anti-Abbott stance no matter what the issue is…and we are complaining about 3d1k’s occasional forays?

        Hypocrisy reigns supreme.

      • “We have about 40 including the owners (well one of) of the site who come down on an anti-Liberal anti-Abbott stance no matter what the issue is”

        Who do you propose is anti Abbott? Certainly not me. I am anti whoever is in charge if they make dumb decisions. It just happens that the Coalition is in charge right now (labor is irrelevant), so it is copping the flak.

        I’ll reward good decisions as much as I slam bad ones (or inconsistent policy making).

        That said, I agree with you about attacking 3d1k. He has a right to comment as much as anyone else.

      • AB says:

        @Flawse, I think you’ll find the majority of people here come down on both sides at various times.

        3d1k is notable because he’s one of the very few (particularly now GSM seems to have gone missing) who never has a bad word for his side.

        Myself, I hate nearly all of them but my focus is mainly on Abbott and his team at the moment because they’re the ones running the country.

      • migtronix says:

        @flawse its not “conservative” view its the blatantly patronising “oh you little folk, Papa Abbott will shepherd you to a better mine, er place” attitude that burns in my ears! If that makes me a hypocrite I’ll wear the label.

      • flawse says:

        AB Everyone thinks their own thinking is ‘independent’ This place is NOT balanced.

        @Mig Our perceptions of 3d1k’s contributions here differ a bit. Everyone ‘thinks’ they KNOW 3d1k…They don’t.
        That said, I find the whole Govt run for lobbyists quite nauseating. However, is that a whole lot different to the Unions having control of government?
        I think not. 3D1K’s observations hree are just facts although as I indicated I think it does damage the intersts of Australia itself both socially and economically.
        I guess as long as you have government that’s the way it is. My observations of the human condition, both now and through history, mean that it will always be so. I guess that’s why I once had some anarchist tendencies!

      • migtronix says:

        @flawse well I won’t defend myself here, I do not, have never claimed to, or in any other respect presumed myself equitable to speak for 3d1k. However our battles are longer range than the present conversation and I had enough of sticking up for 3d on principle only to see it spit back in my face with corporate babble.

        You may be inspired by propaganda but I choose to call it out.

      • migtronix says:

        @UE WOah woah woah I completely and utterly both resent and repudiate the imputation!

        I have never, never , never stopped or even suggested to stop 3d1k commenting but with the same freedom that I defend his speech I’ll jump in to offer some rational examination of 3d’s constantly and painfully belittling bile!

        EDIT: So it seems you were absolutely correct 3d the opinions of the lobby crowd are much more cherished and defended than … well … others…

      • drsmithy says:

        That said, I agree with you about attacking 3d1k. He has a right to comment as much as anyone else.

        The only people who can infringe on his “right” to post are the moderators of the forum.

        No amount of “attacking” from other posters can make his posts disappear, or change their content.

      • migtronix says:

        @drsmithy perhaps The Oz has been making overtures to buy MacroBusiness? Either way I thought it was disgraceful, people get “attacked” all day long over multiple threads across multiple days and nary peep but oh 3d1k well he sounds like 3d has connections better keep 3d on side. Not to mention that flawse is completely wrong there DMc/Squirrel/PeterFraser lots of lib-party neophytes chiming in.

        Over this.

  4. bewildered says:

    I will be watching very closely how Abbott and Hockey deal with the biofuel subsidy scam in the May budget.
    BREE has exposed the biofuel producers’ grant as a massive waste of taxpayers’ money, yet the biggest recipient – Manildra Group – is also one of the largest single donors to the LP and NP.

    United has just mothballed its Dalby ethanol plant due to shrinking sales, yet NSW maintains is mandate. Therefore, we have a federal government propping up a business that is set to fail and a NSW state government that is restricting consumer choice. Two wrongs don’t make a right.

  5. migtronix says:

    As to Sloans alternative how on Earth is a bank taking a haircut not exactly the same as propping up a failing farm enterprise? Further it will discourage bank farm lending in general which puts pressure on well performing farms.

    I couldn’t follow that all, why not have the RBA create a discount window?

    • flawse says:

      Why not get the A$ down to a level which makes the Aus enterprise competitive and profitable and then let business sort itself out. Mind you those, especially farmers, who have been beld dry for 50 years propping an over-consumoing Aus enterprise might need a bit of short term extra help to get back to square one!

      Frankly Slaon write with total ignorance. Like most she knows NOTHING about the farming enterprise nor its people and, like most, she doesn’t care

      • migtronix says:

        I hear you there flawse ahmen! I don’t know much about farm equity and capital requirements but I do know that a discount window at the reserve bank is an appropriate use the banks prerogative, can’t figure out why only banking institutions get the privilege?

      • flawse says:

        Mig I guess we all have a bit of anti-bank bias and would like, justifiably, to see the smug so and sos bleed a bit!

  6. wycx says:

    …agriculture is different to other industries in that its output and survival depend primarily on the weather, pests and disease – which is not something that most other industries face

    Why not set interest rates (and repayment schedule) for loans to farmers according to some regional rainfall index or crop yield index rather than the RBA cash rate.

    • Mining Bogan says:

      I’ll try again a question I asked yesterday. Isn’t there some sort of income/tax equaliasation program in place already that assists farmers through the good and the bad?