ENTREPRENEUR Dick Smith says Australian country towns will be "boarded up" unless governments offer some form of protection to the food processing industry.
Just what form that protection might take would be up to government, although Mr Smith put forward some suggestions when he fronted a Senate inquiry into Australia's food processing sector in Canberra on Friday.
"If we want to have a viable farming community ... we'll either have to give some protection or decide, at least for the next couple of decades, that we're not going to have that industry at all," Mr Smith, who owns Dick Smith Foods, told the committee.
"Every country has some type of protection, and if we could say ... all retailers in Australia, both the German-owned Aldi and Aussie-owned Coles and Woolworths, have to have a certain percentage of Australian products, and we said to other countries we don't mind if you bring in the same rules, maybe that could be a good compromise.
"Consumers ... want the cheapest price. I think we should be told by our politicians we are going to give some protection ... so there will be a slight increase."
Mr Smith said while there were benefits to Australia signing up to free trade agreements, farming communities were often disadvantaged.
"I think we should be really looking and saying do we value our country towns, which I do; do we want to go to these country towns and find them boarded up, because our farmers paying $20-an-hour for labour will never be able to compete with Swaziland where they pay $5 a day. There has to be a balance there," he said.
"But don't blame Coles and Woolworths for it."
Mr Smith instead praised Australia's big two supermarket chains for remaining Australian-owned, and said any attempts by government to diminish their market dominance would render them uncompetitive against foreign-owned companies.
He said the German-owned supermarket chain Aldi "redefined the retail landscape" when it was given the green light to operate in Australia more than a decade ago."
In many ways I admire them (Coles and Woolworths)," Mr Smith said.
"We don't have that many Australian-owned businesses that you can really admire.
"They are as good as anything in the world, and they are ours. I am very proud ... that we own those companies."
He argued the Federal Government needed to look seriously at how penalty rates were paid in Australia.
"I think we should look at that because the alternative is everything will get processed overseas," he said.
"If Woolworths and Coles didn't have to pay such huge penalty rates maybe they can pay a little bit more to our farmers and stay in business."
But he said Australia needed to resist adopting an American-style wages system.
He used the example of American department store Walmart, which pays some workers just $8-an-hour.
"If Australians want low globalised prices, if we're not careful we'll have low globalised wages and I wouldn't want that," he said.
"I really think that it's fantastic that if you work for Woolworths you get paid twice what you do in America because we spread the wealth better.
"But if you go too far you won't have any business here.
"There must be a compromise between the two."
In his 12-page submission to the inquiry, Mr Smith rails against what he describes as "extreme capitalism" and the pursuit of "perpetual growth".
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