Jan Davis’ Tasmanian Country column today

The ‘Repeal Day’ program unveiled earlier this week by the federal government has seen legislation introduced to rid the statute books of more than 10,000 pieces of legislation and regulations that Prime Minister Tony Abbott describes as the “dead weight” on Australian businesses, community groups and households. The government estimates the cuts will save the national economy more than $700 million a year.

This is the first tranche of a planned bi-annual program. To date, the target has been mainly legislation and regulations introduced between Federation in 1901 and the 1960s. The next tranche will move through from the 1960s to the current day.

This week, the National Farmers’ Federation (NFF) also weighed into the debate, and revealed a study by consultant Holmes Sackett that demonstrates the real cost to farmers of red and green tape.

In a word, their profits are going down the drain.

In a column in the Mercury on Wednesday, I noted that where agriculture, fisheries and forestry account for 10 per cent of Tasmania’s gross state product, they carry more than 25 per cent of the total bill for legislative and regulatory compliance, and that was conservative.

With the NFF’s Holmes Sackett report, we can start to understand the real financial and time lost impact on each farm. Their report looked not only at the direct cash expense of meeting the administrative and compliance requirements of red tape; but also the cost of time between 2007 and 2013.

To do that, they analysed a range of farms in NSW, Victoria, Tasmania and South Australia. Most of them were family farms, and includied grazing farms and mixed farms.

They found that the average grazing farm had an average total expense of $24,625 pa relating to bureaucratic red tape. Of this $19,091 (78 per cent) was for overhead expenses and $5534 (22 per cent) was for the cost of time. That means it took the farmer an average three working weeks a year to comply. This was valued at $24,625, which equates to 14.7 per cent of net farm profit.

The findings for a mixed farm were just as bad: $43,935 pa on red tape, of which $30,304 was overhead expenses and $13,631 the time cost, but it cost the mixed farmer six working weeks a year to comply. The $43,935 per annum equates to 12.3 per cent of net farm profit of these mixed farms.

If you put the two together, the bottom line is that the average Australian farmer spends more than $31,000 year on bureaucratic red tape; and it takes them four working weeks a year to comply with all these rules and regulations. This is equal to almost 14 per cent of net farm profit.

The most frightening aspect of this analysis comes from reading between the lines. Many farmers would wish that the Holmes and Sackett assumption that all farms make a profit each year was true. However, no matter whether or not a farm does make a profit in any given year, the cost of regulation would change very little.

So, even in times when a farmer makes a loss, and is struggling to keep his head above water, the cost of compliance with unnecessary rules and regulations takes precedence over all other priorities – in some cases, even over paying the electricity bill or putting food on the table.

I don’t understand what it is that makes people think farmers are fair game. No other sector of the economy would put up with this level of impost. At every turn, we feel the heavy hand of bureaucracy, compliance, registration, regulation, audit, upon our shoulders, and we are spending weeks and weeks sitting at the desk, filling in forms and writing cheques to governments.

Governments cannot continue to oppress the most vital, vibrant and innovative sector of the economy with this yoke of having to comply with unnecessary pettifogging rules and regulations.

We’re encouraged by the federal government’s first round of reducing costly burdens. We’re now looking to the incoming state government to work with us to undertake the same process here in Tasmania.

Maybe then, farmers will be able to get on with the job of farming, rather than acting us unpaid paper-shufflers for the government.
TFGA CEO Jan Davis’ Tasmanian Country column today