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City folk are living off their country cousins’ backs

Frank Zumbo

by Frank Zumbo

04 Jul 05:30am

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Filed under: Australia, City, Country, Government, Petrol, Petrol Prices, Regional, Rural

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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.

Some of us are still riding on the sheep's back. Or not. Pic: Joe Sabljak

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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28 comments

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    • youdy beaudy says:

      06:11am | 04/07/12

      Hello Frank, It is true what you wrote that it is necessary to have more infrastructure in country towns and why not. Farmers contribute a lot to the economy. But having lived in the country during my life i think a lot of it is to do with the cost of transport to those regions. Cost of transport puts prices up. But in fairness to the city folk, well, it seems like a two edged sword in the sense that if not for city folk where most choose to live for jobs etc then they supply a market for the farmers produce whatever it is so the farmers can make a living from their land. It’s a big market place out there as we all have to eat and live.

      So, everyone contributes to each others welfare. They do need to create incentives for people to move to the country towns so apprenticeships would be good for the regions and of course Coles and Woolies do have the monopolies on petrol and groceries and i wondered why myself how this can happen. They have put the small businesses out of the market. The ACCC to my mind is a toothless tiger. It seems to protect those large companies. They used to have corner stores but not now. For instance Bunnings have sent small hardware stores down the tube and taken all the business and Coles and Woolies have done the same. Aren’t Bunnings, Coles owned by Westfarmers.

      The farmer farms and produces then gets nothing for his goods and the middle man and retailers make all the profits and the people pay more. Maybe cutting out the middle man is a good idea to bring prices down.

      There is also the tyranny of distance. For instance long distances have to be traveled by country people to get anything done and this costs them more for petrol etc and of course there is the State Government rip off on Car Rego and the Insurance companies clean up as well with their huge charges for third party on vehicles. Did we notice that the 3rd party went up hugely after the trade Centre in New York was brought down by the planes. Any opportunity to clean up. The Government stood on their hands with that one and allowed it to happen.

      On top of all that there are the Natural Disasters and Floods that probably don’t excite people to move out and considering our population is much older then many farmers are selling up and moving to regional cities where hospitals and doctors are more readily available. Most people and in particular young people want to live near the ocean so they can go surfing and have access to Universities and other Schooling. But i agree that much more should be done about it. Maybe a subsidy on petrol, more incentives for the young families to move out of the cities etc. etc.

      Governments should be doing more in this regard but Governments are basically useless. They run and tax everybody as if the Government is a Corporation when in reality they are only there to manage the money not store it for themselves. It’s all crooked really. It is about time Governments in Australia went back to the principal that we quote so well, ” Government of the people by the people for the people “, not what we have today which is seen as, ” Government of the people by the Government for the Government.” Yes, it’s a sad country Australia when the Government has made it so expensive to live day to day wherever we live that it has come to the point that it is now becoming unaffordable to live in the place.

      Many people are moving overseas where it is cheaper. The Question is, how much can they ultimately drain out of your bank account before we go down to the bottom of the economic zone. We are really just cash cows for them. They need to start running it for the citizens not just their own selfish interests.!

      Reply

    • Dave C says:

      07:09am | 04/07/12

      The author of this it totally correct. Also its in the best interest of people in the cities and on the coast for Governments to invest in regions. The more people we can get to live and work in regions means the less pressure on city and coastal infrastructure. Otherwise all those unemployed country people will move to the city meaning schools hospitals and transport will be further stretched.

      The other problem is the unlevel playing field in terms of agricultural prices. The EU subsidises their farmers to the point where they are paid to lose money (mind you the current crisis is Europe could change that) hence the world prices for agricultural products are artificially low.  Our poor farmers cant compete so the small farm is dying while large agribusinesses have grown as a result.

      Reply

    • acotrel says:

      07:10am | 04/07/12

      The system of calculating council rates should be governed by commonwealth legislation.  The rates charged for an ordinary suburban house in our town are approximately double those charged on an equivalent house in a capital city. You don’t get decentralisation that way.

      Reply

    • Beth says:

      05:03pm | 04/07/12

      If the rates were goverened by commonwelth legislation you would find yourself paying alot more. Rather than have your loval council members look at the amount needed to maintain infrastructure and local circumstances you would have city based people that don’t get it deciding for you.

      Working for a local council in the assets department where a 1% rate rise is equal to only $72k yet we have over 3000km of roads to maintain, and all the towns want there new hall etc and bitch how the shire won’t do this or that yet bitch when they are asked to pay for it.

      Farmers are the worst, they complain that they don’t get the services that people get in the towns so therefore say they shouldn’t pay as much, yet they forget that they live 10km off the main road and we have to maintain the roads to their residence for all weather conditions. They also forget that they can claim their rates as a tax write off, whereas their workers living in towns do not have the same benefit.

    • M says:

      08:27am | 04/07/12

      Decentralisation need to be seriously considered by all levels of government, otherwise we’re going to have empty country towns and packed to the rafters capital cities with stupidly high proper….

      Never mind me, move along.

      Reply

    • acotrel says:

      09:50am | 04/07/12

      There needs to be more incentive for businesses to decentralise. When I first moved to Benalla 12 years ago it was full of teenagers. Most of them have moved to the big smoke to get an education and jobs. No business owner in his right mind would move here and cop the freight charges,transport and communications bills, even though they can exploit the remaining idiots because we don’t have strong unions here.

    • M says:

      10:46am | 04/07/12

      But how to do it Acotrel, and what businesses do you encourage? The way I see it, you need to give a generous tax break to any company willing to relocate to a nominated regional location. Manufacturing is no longer competitive in this country due to high wages, so you’d have to encourage some white collar industry to set up shop in town, but the nature of white collar work often requires meeting with clients in the cities. Maybe when the NBN comes along proper decentralisation can occour, but till then I don’t see it happening.

    • Jay says:

      08:31am | 04/07/12

      Bravo Frank, as an ex ‘bushie’, I give you the royal thumbs up for your column.
      That’s it, Frank Zumbo (not to be confused with a Frank Zumbo, green grocer in a small nsw town!) for PM. Go Frank!!!

      Reply

    • steve says:

      08:35am | 04/07/12

      Got to hand it to you Frank, I thought by now you’d have run out of stories that, at their heart, come down to a whinge about fuel prices and Coles/Woolies, but you just keep churning them out!

      Reply

    • Brian says:

      09:15am | 04/07/12

      I get annoyed by State Governments which make laws for the whole state but are quite unfair to rural areas.
      Laws seem to be made to suit city lifestyle without regard to the affect they have on people in the country.

      Reply

    • The Free says:

      09:23am | 04/07/12

      Basically Cities are the consumers and every where else are the producers. 

      What would we do without the service sector and the administrators?

      I can’t bear to think.

      Reply

    • Zaf says:

      10:18am | 04/07/12

      If country towns want migrants to move there they need to be more welcoming.  People go where there are jobs, and where they feel welcome.

      And all regional areas in Australia aren’t viable - by which I mean while some can come good, there are some that will never be able to support themselves in today’s economy.  Bundling them all together is a dishonest slight of hand.

      Reply

    • M says:

      10:48am | 04/07/12

      Oh jesus, don’t start me on this. In one town I worked in when I was over in WA, you weren’t considered a local unless you’d been there for at least 30 years, and even then you were still an outsider.

    • kitteh says:

      01:49pm | 04/07/12

      There has to be some give and take on both sides. I agree that there can be a lot of silly hometown loyalty, but growing up in a small town, I noticed a lot of complaining from many recent transplants about things that really didn’t matter, and a sense of superiority that naturally sends a local’s hackles up. I rarely saw a newcomer marginalised unless they made it clear that the place was beneath them or that they simply couldn’t wait to get back to the city.

      A lot of the social activities available in the city simply are not viable in the country, so when moving to a regional area, you may have to swap clubbing for hanging at the RSL, shopping and brunch for trading recipes, Cirque de Soleil for the agricultural fair. And you might not find a large contingent of young people/‘beautiful’ people/people with high-powered cars/whatever you may be seeking, so it’s worth trying to get to know everyone. My parents still live in my hometown, and they have friends in every age demographic. It can actually expand your horizon far more than living in the city, where like-minded individuals are easier to find.

    • M says:

      04:26pm | 04/07/12

      There’s a difference between having to adjust to the social scene in a town and not fitting in because the locals consider you an outsider. Small towns can be their own worst enemies sometimes.

    • Leigh says:

      10:46am | 04/07/12

      Perhaps there really is case to scrap state governments and replace them with regional governments. State governments are city-centric.

      Reply

    • Inky says:

      12:22pm | 04/07/12

      So, you mean like, having a more local… council… of some variety?

    • Leigh says:

      04:39pm | 04/07/12

      Inky,

      Something like that, but not with the part-timers we have in councils now; they can’t do the job as it is.

      More like county councils in the UK which are much more professional. People who do the job in their area, not like state governments which know very little about local issues.

    • Inky says:

      11:01am | 04/07/12

      I only read about half of this before I couldn’t really continue. Having spent a deecnt period of time being constantly told by people living out bush that the government wasn’t doing enough for them simply because the NBN wasn’t going to provide them fibre and they wouldn’t have internet as fast or cheap as the urban centres.

      The fact that so many of these people believed it was their right to have such things, regardless of things such as realistic expectations and the simple fact that infrastructure is going to be better in high population density areas, completly ignoring that the NBN was already not profitable in their areas for what they were getting…

      But then, it seems the most vocal Australians in any area seem to have a similar sense of entitlement about something or another. The rest of us just keep our heads down and deal with what we have.

      Reply

    • H B Bear says:

      12:03pm | 04/07/12

      The $600,000 you save by not buying a 2 bed semi in Sydney or Melbourne buys and awful lot of petrol.

      Reply

    • GWS says:

      01:10pm | 04/07/12

      I love mass generalisations about whole groups of people in pedestrian prose.

      Reply

    • TheRealDave says:

      02:06pm | 04/07/12

      Its funny that for the first time EVER the ‘bush’ is about to get the latest and greatest telecommunications infrastructure in the world aka the Australian NBN at the same price as its city cousins AND in some cases before their city cousins….and the one party that is supposed to represent them, the N in LNP aka The Nationals - are the ones fighting to NOT give it to them, the ones saying the rollout blows because they aren’t getting it fast enough, the ones fighting for an inadequate half arsed solution that will see their constituents get the worst solution for more dollars per month and not get it till last…. if ever.

      Yet do we see ANY negative MSM press about it?

      Don’t make me laugh. Not in this country were Ltd News have been championing the opposition at the expense of the Australian people.

      No, instead they demonize two guys who put their electorates and the actual people of ‘the bush’ first and gave them something they have never had nor probably ever will - being treated like everyone else, in a timely fashion and AT THE SAME PRICE - regardless of where they live.

      Reply

    • Mark says:

      03:10pm | 04/07/12

      The reason you think it is funny is because you seem to have no understanding of cost. You spew a bunch of garbage how a political party is not in favour of handing out money hand over fist (The horror) and then go on to talk about the MSM is behind all this?

      Instead of dreaming up all these grand conspiracy theories, how about you actually understand what your arguing against and then you won’t come off as some left-wing nutjob.

    • renold says:

      02:22pm | 04/07/12

      Wish these country folks understood that without the city folks they will have even less

      Reply

    • Gary from out west says:

      04:56pm | 04/07/12

      Thats cool Renold ill keep my crop for myself and i bet youll be whinging about not having your favourite cereal in the morning or the milk to put in it. In fact i guess youd starve and half the population would turn into zombies if the “country people” didnt exist.

      Time to get off your high horse, City and Country people have a symbiotic relationship and really one couldnt survive without the other.

      While the state goverments spend billions on highways to get you to work a few minutes earlier, we get the luxury to travel on some bloody ordinary roads for hours to ge anywhere but i guess thats our fault for not being city folks.

    • renold says:

      08:00pm | 04/07/12

      @Gary
      That was actually the point I was making, one cant survive without the other really

    • Dan says:

      03:41pm | 04/07/12

      We are an enormous country with a small population. We will never have the economy of scale that allows equal access, regardless of where you live. Fact of economic life. Anyway, there are some of us who prefer it that way.

      Reply

    • Mark/Fox says:

      06:03pm | 04/07/12

      The biggest problem our farmers face is overpopulation, so much land has now been turned into national parks or been subdivided into hobby or lifestyle blocks or been torn up into mining land that the price of farmig land has gotten out of reach for those who would like to go into the farming industry, until we control our growing population our economy will never be under control, some people seem to think that the less populated areas are valuable, there is a reason they are not populated that is because the are marginal farming and no one wants to live there, just like the deserts Afghanistan,!

      Reply
 
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