Tackling Australia's welfare state

I spent last weekend in one of South Australia’s most productive agricultural areas – the Riverland. The breadth and diversity of horticultural and agricultural interests in this area are fantastic and there are many incredible business success stories.

Whether it’s grapes, melons, almonds, lettuces, wine making, roses or meat processing, these great South Australian businesses are working hard to grow and improve their businesses. But they all face similar headwinds that should concern many Australians.

During my visit, there were three common themes raised in respect to the challenges facing their businesses: water, labour and electricity.

Horticultural pursuits depend on reliable and reasonably priced access to water, which is principally sourced from the Murray River. Unfortunately access to that water is driven more by government decisions than by market forces. 

One grower told me of his willingness to invest millions of dollars in his plantings and the purchase of water licences, but he was worried about the arbitrary decision-making of the State Government as to what percentage of the water entitlement any owner will be allowed to use.

It makes a mockery of planning and market efficiencies when a minister can cut purchased water licenses by over 60 per cent without justification. Worse still the same government has spent billions of dollars on a desalination plant but refuses to get it operating until (to use the minister’s words) the river ‘runs dry’.

Little wonder those willing to expand are loath to make the investment. It was a powerful example of how government has become the problem rather than the solution.

Electricity prices were also a huge concern. South Australia has the highest level of renewable (and unreliable) electricity generation in the country. It is no coincidence that it also has the highest electricity prices. These prices are already crippling many businesses and are set to get worse.

As the fringes of the political world seek to shut down our coal-fired generators in favour of illogical non-solutions we lose the single most important competitive advantage our nation has – the ability to produce cheap electricity. Blessed with an abundance of coal, we should not only be exporting it, we should be using it for domestic benefit too.

The third challenge was perhaps the most alarming – labour.

Time and time again we were told how hard it was to access domestic workers in regional communities. One example highlights the problem at hand.

In a significant town with 12.6 per cent unemployment, almost every horticultural job was filled by internationals. When asked why this was the case, one employer told me the following anecdote.

After advertising for workers they might receive 40 applications. When told of the need for a drug test more than half of the applicants drop out. Of those that do submit to the testing, another half fail the test.  Of the eight or so remaining, perhaps four are suitable for the job requirements. After offering them a position, the employer considers themselves lucky if two turn up for the first day.

Another employer told me of a similar circumstance in their business and stated that it wasn’t unusual for those that did start to just leave half way through, deciding that work was not for them.

Hence these businesses are left with no choice but to source foreign workers willing and able to do the jobs that too many Australians see as too difficult or beneath them.

It begs the question as to what sort of society are we becoming?

The welfare state has left too many Australians with a sense of entitlement that they don’t have to work. Somehow society owes them a living and it’s okay for them to get stoned and sit around bludging off the taxpayer-funded benefits.

Of course we should support those who are vulnerable and genuinely in need, but already we have too many on the intergenerational non-workers list. We have a fast growing group of people who don’t want to work and don’t see anything wrong with that. If it continues, our support for their bludging will eventually break the budget.

Surely it’s time to hold these individuals to account and bring in tougher criteria for ongoing access to social security benefits. Two steps could make an immediate difference.

Firstly, we need to introduce welfare quarantining so that those accessing the taxpayer-funded safety net aren’t wasting their support on drugs, alcohol and cigarettes. A trial in Ceduna is already seeing positive results, particularly in remote indigenous communities.

Secondly, it’s time we introduced regular drug testing for long-term recipients of social security benefits. After all, if taking drugs disqualifies them from even applying for a job, why should the rest of us be left to pick up the bill?