From Whence it Came.
May I begin this presentation with a little explanation as to what this committee was instructed to do. The committee was borne at Conference last year as a result of resolution 90, which stated;
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“That this Conference of the National Party of Australia-Queensland, calls for the establishment of a sub-committee of the Primary Industry, Trade and Treasury policy Committees to investigate discrepancies in figures between the Australian Bureau of Agricultural Resource Economics (ABARE) and the Queensland University of Technology (QUT) research which identifies major statistical differences in Agricultural produce exported and that consumed domestically”.
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After being unanimously carried by Conference at Rockhampton, our previous State President generously proposed myself to chair the duly constituted NPA-Q Agricultural Production Destination Committee. Thus began the process.
Special thanks must go to Dr Mark McGovern who refused to be intimidated by powerful agencies and departments. Consecutive ministers who chose to challenge his credibility rather than question their bureaucrats, consistently ignored his research.
Along with Dr McGovern, other members from academia who so willingly and freely gave of their time are world renowned economists Emeritus Professor Rod Jensen, Emeritus Professor Ted Kolsen and Associate Professor Guy West, who like the Australian Bureau of Statistics were surprised to say the least, at the repeated claim that 80% of our agricultural production is exported.
It is most important to mention that not one of these esteemed gentlemen participated for any personal gain and that they are internationally regarded in this particular field of economics.
My committee also should be thanked. In particular the chairman of the Economics committee Rolf Mitsdorffer, a person whose integrity and objectivity is an example for us all.
Mark Mazzanti and Dick Jeremy for their valuable contribution, their persistence and their no ‘nonsense’ approach. I have come to admire these men for their intelligence and strength and they are not bad blokes as well.
During the year our State President repeatedly offered encouragement to me, though his personal contribution was limited by his relentless effort to be every where in our great State.
I must extend our gratitude to one Bob Katter MP. Bob was responsible for gaining departmental approval for the ABS to travel to Brisbane and meet with our committee at Customs House on that historic day in May. We might even call the resultant agreement the Bob Katter Customs House Agreement.
Finally I would like to point out that each and every delegate to these Queensland National Party Conferences, can feel justifiably proud for having encouraged democracy to function as it ought.
Without the power brought to bear at a forum such as this through an organisation like ours, this critical issue may never have been resolved. We are part of a truly wonderful structure in this great Queensland National Party.
Findings.
Who said What
When the committee began its work we discovered that numerous organisations claimed various levels of agricultural exports;
- The Parliamentary library came up with figures of up to 200%,
- The Department of Foreign Affairs and Trade after some time finally settled on a draft paper suggesting about 66%,
- The Australian Bureau of Agriculture and Resource Economics when pushed concurred with about 66%. However, in their Farm Stats 2000 publication and earlier, they have claimed 80%,
- The National Farmers Federation claimed 80%,
- The Queensland Farmers Federation repeatedly claimed publicly 75% or 80%,
- Most of our politicians from all parties publicly supported 80% and subsequently accepted 66% when DFAT finally came good with a set of draft numbers. (Politicians depend on advice from their minders and departmental bureaucrats, therefore the actual percentage value of exports becomes a critical issue for policy development),
- The Queensland University of Technology’s research project by Dr McGovern indicated 22 % direct exports.
Our committee felt that to confirm or refute McGovern’s findings some further knowledge and authority should be engaged. Specialist economists, after initial investigations, were very much in agreement with the lower figures as concluded by Dr. McGovern.
Our committee then sought to discover the source of the various ‘stated beliefs’ and these all led to The Australian Bureau of Statistics. (ABS)
ABARE’s response to our early approach for clarification prompted a statement to the effect that we do not have the specialist (input-output) skill to undertake such work. We source this kind of information from ABS.
DFAT, as well confirmed ABS as their source.
All paths led to ABS.
Now What.
Phone discussions with ABS showed that two departments existed inside ABS that deal with this information. The Agricultural Statistics section were themselves perplexed. In fact, one of the gentlemen from Ag stats rang me to say he had heard on radio somebody claim 90% exported. He could not believe his ears.
The second ABS department involved is National Accounts. This was to be an interesting chapter of our investigation.
National Accounts, we discovered, had been somehow involved in the draft DFAT position paper suggesting 66%. This was in direct conflict with the previous head of National Accounts who confirmed Dr McGoverns research.
When I spoke to her prior to last conference, she was ecstatic that at last something meaningful may be done about this 80% myth which has permeated the minds of politicians, bureaucrats and the Australian public.
As no one was prepared to move from their stated position, it was clear that a meeting was needed to reconcile the wide differences that had now emerged. When approached, ABS agreed to a face to face meeting, but in Canberra.
All who are sitting here today know of the costs involved with travel and accommodation associated with committees. However with Bob Katter’s considerable efforts ABS staff gained approval to meet with us in Brisbane. I should also thank minister Hockey’s office for their co-operation in allowing this meeting to take place.
At the end of the Customs House Meeting, the committee had established the facts, and the subsequent agreement of proceedings became known as the Customs House Agreement.
The Customs House Agreement
- It is unequivocally agreed that for the year 93/94 that only 22% of farm gate value is directly exported from Australia.
- It is agreed that direct exports, together with the first round total of indirect exports, roughly account for 25% or an additional three percentage points,
- All agreed that those who propose the higher figures like 80% are simply wrong,
- ABS agreed that 66% was questionable and problematic ,and
- ABS would not arrive at 66% figures using accepted methods,
- Only 7 of 53 sectors exported more than 50% of output,
- All agreed the real proportion of exports as shown by Dr McGovern was well known for some time,
- Figures such as 80% use FOB values to compare with farm gate values,
- Some calculations have led to double counting or have included inappropriate components which have distorted outcomes,
- Errors occur when comparing value added items like biscuits in a container on board ship with wheat at farm gate or perhaps a bottle of wine on board ship with the value of grapes at farm gate,
- In some cases inappropriate basis are used eg. the value of spraying or shearing being added to exports of wool, grain or cotton,
- Other examples of double counting occur when such things as sausages consumed by coal and steel miners in their respective industries are classified as exported agricultural production.
All these definitional and methodological anomalies distort real farm gate values. Some extreme methods of calculation have arrived at up to 200% of farm gate value exported.
Ramifications / Considerations.
Several important ramifications flow from the confirmation that we export significantly less than 80%.
There certainly is a need to circumvent misinformation.
We need to question how and why the 80% myth gained so much creditability, through consecutive governments, despite repeatedly being told of the error.
Does a sufficient level of skill exist within the bureauracy to provide governments with the information that they require?.
Is the public service truly independent?.
Does it offer government advice on policy framework reflecting fact, not actively building numbers to support particular partisan positions which leads to inappropriate policy development?.
Is there a need for an independent Department/Office capable of informing government of the needs of rural and regional Australia which can specify policy development that recognises the true role of agriculture in the Australian economy?.
The false logic in our current industry policies can be found in a quote by the National Farmers Federation in the February 2000 edition of the ‘Farm Journal’
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“With nearly 80% of gross value of production sold on export markets, Australian agriculture is trade dependent. No other single issue could potentially lift the profitability and investment in rural Australia than reform of world farm trade”
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Or from some of our politicians who claim “Australia doesn’t need four out of five of its farmers”,
Such comments are simply incorrect. Three out of four farmers produce for the domestic market.
Ladies and gentlemen, now that the facts have been established, and they are without doubt, that Australian agriculture sells its production mainly to Australians, the most important question is quite simple.
What are we going to do about it?.
Thank you.
Chairman: Rowell Walton
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Tags: ABARE, ABS, Rowell Walton
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