Opinion: Grain growers are left to pay a hefty levy bill

Close watchers of federal politics may have noticed the Albanese Government’s proposal to preference companies with union-backed enterprise agreements when awarding Commonwealth contracts.

It has been reported as another industrial relations measure. It is much more than that.

It is simply the latest instalment in one of Labor’s oldest political habits: using compulsory economic systems to build permanent institutional power.

To understand today’s proposal, you have to go back to the Hawke-Keating years. That was the age of grand bargains.

Governments, unions, business and bureaucrats sat around the same table and redesigned Australia from above.

Much of it was overdue. Tariffs came down. The dollar floated. Financial markets were deregulated. Australia became a more competitive economy.

But not every reform made Australia more liberal. Some simply replaced one form of protection with another.

Take compulsory superannuation. It was sold, quite rightly, as retirement policy. Australians now enjoy one of the largest pools of retirement savings in the world.

But compulsory superannuation also achieved something else. It permanently embedded organised labour into Australia’s financial architecture.

Compulsory contributions created compulsory institutions. Industry funds emerged from union-employer structures.

Around them grew boards, investment managers, consultants, campaigners, economists and advisers.

The river of compulsory contributions became an ocean of capital, influence and political power. Labor did not simply create a retirement savings scheme. It created institutions.

That distinction matters because governments come and go. Institutions endure.

Three decades later, those institutions have become among the most powerful financial organisations in the country.

They are now part of Australia’s political and economic landscape.

Now the Albanese Government wants to apply the same thinking elsewhere.

Businesses seeking Commonwealth contracts may increasingly find themselves judged not simply on price, quality or value for taxpayers, but on whether their workplace arrangements resemble Labor’s preferred industrial model.

The message is subtle but unmistakable: align yourself with Labor’s industrial architecture and life becomes easier.

That is not procurement reform. It is political preference dressed up as workplace fairness. Farmers should pay attention because agriculture has lived through its own version of this story.

At almost the same time Canberra was constructing compulsory superannuation, it was also redesigning agricultural research.

The Primary Industries Research and Development Act 1989 created the modern RDC framework. Grains Research and Development Corporation followed in 1990.

Grain growers would pay compulsory levies. Government would match eligible expenditure. Research would improve productivity.

It was, and remains, a sensible idea.

Few would argue Australian agriculture has not benefited enormously from improved varieties, better agronomy, disease management and farming systems research.

The issue is not research. The issue is what happens whenever governments create a compulsory stream of money.

Governments rarely abolish a compulsory scheme. They feed it.

First comes the levy, then the statutory authority, then the board, then the consultants, then the strategic plan, then the five-year review explaining why the system needs even more money.

Before long, researchers, bureaucrats, and service providers all have a seat at the table while the grain growers paying the bill are left filling out another stakeholder survey.

Like every institution built around compulsory funding, the RDC system has gradually developed its own ecosystem.

Government likes it because it generates hundreds of millions of dollars of research investment without fully funding it itself.

The bureaucracy likes it because it creates a tidy policy machine.

Researchers like it because it provides a reliable pipeline of funding.

Universities like it. Consultants like it. Service providers like it. The grain grower, meanwhile, gets the invoice.

Here is where the comparison with superannuation becomes interesting.

A worker is compelled to contribute to superannuation but can choose an industry fund, a retail fund or a self-managed fund.

A grain grower enjoys no such freedom.

Every compulsory levy dollar goes into the approved system.

Growers are consulted. Growers are surveyed. Growers attend workshops. But consultation is not the same thing as control.

No shareholder would accept being told they could attend focus groups but have no meaningful say over how much they were required to contribute or how their money was spent.

Yet that is effectively how the GRDC levy operates.

This is not an argument against research.

Nor is it an argument for dismantling the RDC system.

It is an argument against assuming compulsory institutions should become immune from democratic accountability simply because they have existed for 30 years.

The RDCs became far more than research organisations. Both evolved into institutions supported by compulsory funding and surrounded by people whose professional lives depend on preserving the existing model.

The compulsory dollar attracts people who administer it, advise it, consult to it, review it, defend it and, eventually, convince themselves that questioning the system somehow threatens the national interest.

There is nothing sacred about a compulsory institution.

If compulsory contributions are justified because they serve the public good, then the people compelled to pay them deserve genuine choice, meaningful accountability and a stronger voice over how much they contribute and the priorities their money supports.

After 35 years, it is time for the minister to answer a simple question.

Should grain growers have a greater say over the compulsory levy they fund, or should they simply keep auguring more money into a billion-dollar institution that has gradually become more accountable to the system than to the people who pay for it?

Trevor Whittington is the chief executive of WAFarmers