City folk are living off their country cousins’ backs
Do you live in regional Australia or do you know someone who does? If you do, then you will know the many challenges faced by those who live there.
For those of us who live in the major cities we should spare a thought for our country cousins. We should spare a thought for those who generate a considerable part of Australia’s wealth but typically see very little back.
Governments like living off the mining and farming wealth generated in the regions but they generally don’t like giving back as much as they should to the regions. It’s easy to live in a capital city and enjoy the ready access to schools, hospitals and government services.
For those living in regional areas access to a school may mean plugging into the internet and not being able to have the physical interaction that goes with a school playground. Access to a hospital may require a lengthy plane trip with the Flying Doctor service. And access to government services may require a lengthy road trip to a major regional centre or capital city.
Of course, our country cousins gladly accept these challenges because they love the country lifestyle. But we need to remember that regional areas generate lots of money and we need to invest a sizeable portion of that back in the regions.
Investing in the regions is not just some patriotic appeal in support of our country cousins. Rather, financially supporting the regions and cutting bureaucratic red tape makes good business sense for the nation as a whole. Failure to adequately invest in the regions leaves us dangerously exposed and will make it increasingly harder to harvest our country’s mineral and farming resources.
Take the pressing issue of skills shortages in regional areas. Skills shortages mean that the costs of mining and farming rise and, in turn, reduce the viability or profitability of mining and farming ventures. Paying increasing salaries and wages to the increasingly scarce skilled tradespeople is simply not sustainable.
New apprentices need to be urgently trained in all the trades needed to sustain mining and farming projects. New workers need to be attracted to the regions to service those mining and farming projects. New and improved infrastructure and services are needed to attract new workers and apprentices to the regions. These would all work to keep mining and farming project costs down.
Attracting new workers and apprentices requires that the regions are an attractive place to live and do business. It certainly doesn’t help when the cost of living in the regions is so outrageously high.
Take the old, but re-occurring issue of regional petrol prices. Here the rip off is ongoing and made considerably worse when sharp falls in world oil prices and local wholesale prices are not passed onto regional motorists in a timely manner.
In recent weeks there have again been dramatic falls in wholesale petrol prices across Australia, but these falls have not been seen at the retail level in many regional centres. That means that motorists in those regional centres are paying inflated petrol prices. Is it any wonder that it’s hard to attract people to regional areas?
It’s not good enough for the ACCC to simply say that it takes longer for retail prices to come down in regional centres following falls in wholesale prices. That excuse fails to explain how some regional centres see dramatic falls relatively quickly, while in other regional centres retail prices take forever to fall if they do at all.
Unless falls in wholesale prices are passed on in a timely basis in regional areas the sad reality is that motorists are being ripped off and the sooner the ACCC shines a light on the rip off the sooner you would expect the rip off to end. The danger with the ACCC trying to explain away the inflated regional petrol prices is that it may simply give major retailers the green light to continue the rip off.
On top of inflated petrol prices just add inflated electricity prices and you soon find that the cost of living is out of control in regional areas.
Then add inflated retail rents as absentee landlords want to make record profits from their investment in retail premises in regional areas and you can see how bricks and mortar retailers are closing down across regional Australia.
To add insult to injury you have governments pulling services out of regional areas. Getting a drivers’ or other licence can become a real challenge in itself. Take, for example, the State Government Department that requires a person to drive 12 hours each way to the capital city in order to be interviewed for a contractor’s licence.
Obviously, we need government departments to deliver services more efficiently to the regions so as to avoid adding to the already very high cost of doing business in regional areas.
A failure to deal with inflated petrol and electricity prices discourages people from moving to regional areas and inflated retail rents discourage small businesses from setting up in regional areas.
Having an oversized Coles or Woolworths in a regional centre is not the answer as these two can use pricing tactics or gimmicks to help knock small businesses out of the market.
Do Coles and Woolworths expand the number of jobs in regional centres? That depends. What if for every so-called new job in a Coles or Woolworths supermarket two or more jobs are lost if small businesses are forced to close by any pricing tactics or gimmicks by Coles and Woolworths?
More importantly, small businesses are more likely to give back to the local regional community in a variety of meaningful ways while big businesses will generally draw money from regional communities and send profits back to head offices in Melbourne, Sydney or overseas.
And before the free market theorists get too excited and say that Coles and Woolworths can help `bring down’ retail prices to consumers let’s not forget that those regional centres with inflated petrol prices may already have a Coles or Woolworths petrol outlet. Obviously, in those regional centres with inflated petrol prices the presence of a Coles or Woolworths hasn’t brought down retail petrol prices.
The point is simple. Having a Coles or Woolworths in a regional area will only bring down prices where there are strong independent retailers in the area. Absent those strong independent retailers you generally find inflated retail prices. Whether it is petrol or groceries, retail prices are only generally cheaper at a Coles or Woolworths where there is a strong price competitive independent in the particular market.
That’s why it’s important for the ACCC to clamp down on the stranglehold that Coles and Woolworths are increasingly gaining in regional areas. Creeping acquisitions by Coles and Woolworths where they make ongoing small scale acquisitions of land or existing businesses which over time substantially reduce competition need to be effectively dealt with by the ACCC.
Escalating electricity prices need to be tackled as these are even more unsustainable in regional areas. Large mining businesses need to invest more and more in training apprentices and if they don’t then the Federal Government should make sure they do.
Any failure by the Federal Government in this regard is detrimental to regional areas as it simply encourages mining companies to cut corners by not adequately investing in a much needed local skilled workforce.
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