Drought and structural adjustment

Abstract

Australian history is rich with stories of the adverse effects of attempting to shore up existing businesses experiencing financial difficulties rather than allowing new businesses the opportunity to enter and other existing businesses to adjust and expand. For drought policy, this observation presents a dilemma – does one help those in need or does one bite the bullet and let change occur? Nearly all recent reviews have made the observation that communities and also long-term productivity will be best served in terms of equity and efficiency if drought policy restricts itself to the delivery of programs that expedite change and, where necessary, provide welfare assistance to families using a separate policy processes. This approach makes it possible to allow the best businesses to prosper whilst simultaneously providing welfare assistance to families in need.