Doesn’t it nark you when you read that the government has paid someone a huge grant to develop a project or rescue a business, when their competitors have to save up for this or go cap in hand to the bank manager?

A case can be made for fully-secured loans or HECs type loans to support new business ventures or expansions. However, there is little justification in this day and age for grants. This is especially the case now we are being told that ‘the age of entitlement is over’.

I have reported in this space before that Australian farmers are among the least subsidised in the world. According to the OECD, just 3.2 per cent of farm income is attributable to government assistance, the second lowest proportion in the world behind New Zealand’s one per cent.

The OECD average is 20 per cent, with Norway’s faremrs heading the table at 60 per cent. So if the Bergen farmer gets $100,000 revenue every year, taxpayers are footing the bill for $60,000 of it. That is a false economy.

We have a different form of false economy in Tasmania, but again it is attributable to an overdependence on the public purse. Professor Jonathan West of the Australian Innovation Research Centre has drawn attention to this on several occasions.

His one-line conclusion is extremely disturbing: 70 per cent of Tasmanian households are dependent on government payments or government-generated work.

These are the bald facts:
38 per cent of Tasmanian households rely on a Commonwealth Government welfare payment as their sole or primary source of income – 22 per cent have a disability allowance, then there are supporting parent allowances, unemployment benefits, pensions, etc;
75 per cent of all Tasmanian households receive some form of Commonwealth government welfare payment;
26 per cent of the household workforce is in the public sector, including government business enterprises like Hydro and TasWater;
Therefore, 60 per cent of households are primarily directly dependent on government jobs or payments.
10 per cent of households derive their income from private companies whose sole client is the government;
Therefore, 70 per cent of households are dependent on government payments or government-generated work.
Professor West reported that the bottom decile of Tasmanians, 24 per cent, is unemployable and very poor. There are four times as many people in this category here as in any other state. The education level in this group is lower than that even in the Northern Territory, by far.

And this is horrific: 15 per cent of Tasmanian children grow up in a household where no member of that family has ever had a job.

There are serious consequences arising from our false economy.

Firstly, the other states don’t like it, because they are paying for the lifestyle of that 70 per cent. Fortunately, we are an original state of the federation and, so far, the federal government has stood by us. Only time will tell how long that lasts for.

Secondly, when you don’t have to worry where you next dollar is coming from, you are in the luxurious position of naysaying development proposals that may create economic wealth for other sectors of the population. Ring a bell, does it?

On behalf of the farming lobby, let me say we are doing our part to forge an economic future.

Commonwealth Bank research, just released, found most Tasmanian farmers intend to increase investment across their farming operations in the coming year, focusing on infrastructure, technology and education.

Tasmanian farmers are upbeat, declaring their strong intentions to invest in the physical aspects of their farm businesses, including fixed infrastructure (26 per cent), plant and equipment (17 per cent) and land acquisition (seven per cent).

They intend to scale up existing operations in the next 12 months, particularly in sectors like wool (26 per cent) and prime lamb (25 per cent).

In terms of financial intentions, 41 per cent of Tasmanian farmers say they will spend more on farm inputs. On the people front, the research shows farmers in Tasmania are more likely to increase the number of farm employees (13 per cent) in the next 12 months than farmers in any other state.

So, there is no false economy out there in the paddock; no flood of government money propping up the people who provide the backbone of the Tasmanian economy. Farmers are putting their own money where their mouths are. Importantly, they understand that, in order to have a sustainable future, it is important to invest in productivity gains as well as control costs.

By the time you read this over your breakfast cereal today, we’ll know the outcome of the long-awaited federal budget. Let’s hope that our political leaders are as savvy about growing the economy as our farmers are about growing their businesses.
TFGA chief executive Jan Davis