Argentina has long interested me. Just how a country blessed with their natural assets and European colonial history has managed to turn itself from being one of the 10 wealthiest countries in the world prior to the first world war to 65th in the world is a case study of the failings of popularist socialist government policies.
Argentina is a textbook case of how left wing governments can destroy an economy with its “Don’t Cry for Me Argentina” model of Peronista (Evita Peron 1919-1952) economics, the mad socialist leaders who started the rot in the 1940s.
Their model of a big borrowing, big spending government that promised to redistribute the wealth of the wealth creators only to deliver ongoing economic misery to the middle class and the poor is something Australia should learn from.
Part of their economic model is, believe it or not, an annual tax on agricultural exports, which are as high as 33 per cent on the value of soy beans and 12 per cent on wheat, corn, and meat.
Imagine paying out $50 per tonne tax for the privilege of growing a tonne of wheat and then having to pay tax on any profits you manage to make. It may sound mad but it’s not that far from Albanese’s new biosecurity tax on farm gate production.
Their recent attempt to tax farmers on their grain, livestock, fruit, vegetables etc which was based on the Research and Development Corporation (RDC) levy is essentially is a tax on production.
At least the RDC taxes are matched by the federal government and the dollars directly support research and marketing, so we at least get some sort of a return on our compulsory taxed dollars even if we pay out in before we make a profit.
Not that we are on our own. The mining industry currently pays a tax of 10 per cent on their mine gate production, a rate which the previous Brendon Grylls led WA National Party and the Kevin Rudd Federal Labor government both thought was ripe for increasing, to pay for their grandiose schemes.
Both attempted money grabs failed as the punters got nervous this was not good economic management. In fact, both were clueless policies, unfortunately both were supported by many farmers who loved the idea of mining and petroleum shareholders apparently paying their fair share.
Fare shares come after tax not before.
Clueless because once that door is opened, it remains open. It’s only a matter of time before some other politicians have the brilliant idea to tax farmers for programs that the city benefits from, as they claim a fair share of your wheat crop before you cover costs.
This is exactly what the new biosecurity tax is, a pre profit tax. It might be small at 0.1 per cent of farm gate production or $1,000 per $1m turnover but the door is now well and truly open for taxing farmers as they do in Argentina and 40 other countries at the farm gate.
