These Bert Kelly columns are collected here and arrayed in non-chronological order because: article #1 deserves pride of place; #2 follows up on it; #1, #3 and #4 were republished in the Kelly column compilation book, Economics Made Easy (1981 & 1982), showing he never forgets a favour; and #5 indicates he appreciates the importance of unions in the Australian industrial landscape.
1. “Pointing a Gunn at shipping conferences,” 9/3/79
2. “Colonialism still lingers in shipping circles,” 2/8/80
3. “Sweat bands needed — it’s a killing pace,” 15/7/77
4. “Charlie and the floating feather beds,” 3/10/75
5. “Why one can’t be a union basher,” 10/9/76

1.
A Modest Farmer [Bert Kelly], “Pointing a Gunn at shipping conferences,” The Australian Financial Review, March 9, 1979, p. 3.
Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 168-70, as “Outlook Conference.”

When I was a member of Parliament, Eccles used to make me go to the Agricultural Outlook Conference which is put on by the Bureau of Agricultural Economics in Canberra at the end of January each year.

He hoped that, by so doing, I might perhaps fill in the greats gaps in my economic understanding, as he called them, so that I could serve my electorate better.

Now that I am no longer an MP, I still go.

One reason is that I meet many knowledgeable and influential people there which helps me write this column.

But another less worthy reason is that, in my retirement, I have become an inveterate conference attender.

Constant practice enables me to sleep soundly through the first session after lunch while looking wise at the same time.

I admit my parliamentary experience helped me in this so I have an unfair advantage over most people. But nevertheless, I am proud of my pre-eminence in this field.

Often, if I am roused from my stately slumbers by some careless clapping or rude mirth, I find many envious eyes watching me closely, hoping to see how a real expert does it.

I do not tell them. I just go on looking wise.

This year, one notable event was a buffet dinner and drinks put on by the European Shipping Conference.

I guess these people wanted to take the opportunity to explain to influential farm leaders the advantages that come from the shipping conference system.

It was not a good evening.

First, many of us had to eat while standing up which is an uncivilised way to behave.

Second, it was hard to hear what the speakers were saying. This may have been a good thing but it would have been nice to have been certain about this.

But the evening was spoilt for me because I kept recalling Eccles’ warning that there was no such thing as a free feed, so I had an uneasy feeling that I had already paid for my meal, or, if I hadn’t, I was about to.

There were some excellent graphs displayed on the walls, all done in striking colours, designed to show that the shipping conference system had served Australia well.

But one of these happened to show how the conference freight on wool had been held down when Sir William Gunn was twisting the arm of the European Shipping Conference in 1972.

The Wool Corporation has recently been doing some more screwing and have been able to negotiate a special reduced freight rate for 80,000 bales from a shipping line outside the conference system and which showed a reduction of over 60 per cent on the conference rates.

Many of us were suspicious that it was the startling success of this trial shipment that activated the function we were at.

And I noticed that, when one of the farmers was speaking later and asked, “Was Sir William Gunn in the room?” many of the shipping people looked around nervously and some edged towards the door.

The break-up of conference shipping is interesting.
Loading costs in Australia: 31%
Crew costs, insurance, etc: 23%
Bankers costs ………………..: 11%
Port costs ………………………: 4%
Discharge in Europe ………: 17%
Depreciation and return on capital: 14%

It costs 31 per cent to load in Australia compared with 17 per cent at the other end, which is a grim indictment of the mess we have made on the waterfront.

But the shipping conference system has encouraged these costs to rise.

If there is strife on the waterfront and a shipowner has to choose between having his ship held up — which costs the earth — and giving in, he usually gives in.

He does so because he can recover any resulting cost increases by raising his rates, knowing that the other conference lines will stick together.

Eccles has another saying, “You can always tell a man who is dining out on an expense account by the enthusiasm with which he summons the waiter.

Conference ship owners know that someone else will pick up the tab in the end.

The Government has given the shipping conference system a privileged position under the restrictive trade practices legislation.

There are many reasons for so doing and perhaps the speakers told us about them at the dinner.

That I couldn’t hear them if they did was not the fault of the shipping people.

But they were wrong to insert a function of this kind into an outlook conference program.

Farmers may be a bit simple but we usually know when we are being duchessed, even if we have to eat standing up.

***
2.
A Modest Farmer [Bert Kelly], “Colonialism still lingers in shipping circles,”
The Australian Financial Review, February 8, 1980, p. 11.

At the 1979 Outlook Conference, the Australia to Europe Shipping Conference put on a buffet dinner for the delegates.

The increased irritability that comes with old age, and the frequent warnings from Eccles that there is no such thing as a free feed, made me nastier and more suspicious than usual.

So I made some trenchant criticisms of the conference system after the function which I should not have done with their food heavy in my stomach.

First I said that it would be wiser of them not to try to duchess us again next year but if they were not ashamed of the conference shipping system, they should prepare a proper reply to the weighty and frequent criticism made of the conference shipping system.

This they have now done and have been courteous enough to send me a copy.

It is certainly a frank document.

There are no pretensions to pose as defenders of competition and the free enterprise system, as do the textile industry leaders.

They admit that the Government gives them particular advantages under the restrictive trade practices legislation but they maintain that these are necessary if the conference is to continue to give certainty of freight rates and regularity of services.

They may well be right in this but at least they admit that they get a special place in heaven.

I wish that more of those who protest so loudly about their belief in free enterprise would be equally frank.

So that the question can be disposed of, let me quote from their document.

“A major reason behind conference formation was the regulation of competition between carriers, through the setting of mutually agreed freight rates and conditions of service, so that the trade may benefit from the rationalisation that co-ordination allows, but competition prevents.”

Unfortunately, the same frankness is not so evident all through the document.

One of the most weighty criticisms made about the conference system is that it has enabled sweetheart deals to be made with the waterside workers and other groups because the shipowners knew that they could recover any increased costs by raising their freight rates, secure in the knowledge that everyone else on the coast would do likewise because of the conference agreements.

When I said this last year, a friend in the shipping industry took me to task, saying that these practices had now ceased.

There is no doubt that they used to go on and have cost us dear in the past.

I am glad to hear that they have now stopped and would be even gladder to hear that they were gone for good.

I know that it is easy to criticise the conferences for giving in to union blackmail when ships are so dear and containers also, making the cost of having a ship held up devastating.

So I know there are no easy answers to this problem but to ignore it in the conference document was dodging the issue.

However, there was one paragraph that I found infuriating.

They claim that the conference system is not really monopolistic because outside shipowners can always slip in and skim the cream of the really profitable cargoes, such as wool.

However, they regard this as a lamentable way to behave and they go on to “regret that individual shippers are wooed by the opportunity of short-term financial gain and completely ignore their responsibility to the economic well-being of the country they live in.”

It really is nonsense to talk like that.

Everyone knows that the conferences resent wool shippers looking for cheaper freights.

It was this twist that Sir William Gunn gave to the shipowners’ tails that made them realise, for the first time, that we had ceased to be a colony and were willing and able to look for cheaper ways of shipping our wool.

This hurt must still rankle; evidently if the Wool Corporation is nasty enough to go looking for cheaper wool freights, it is ignoring its responsibility to the country it lives in!

If indeed it is necessary for wool freights to be held artificially high to enable apples and other marginal cargoes to be carried at conference rates, then certainly the woolgrower should not be expected to pay the price.

If it has to be done for the well-being of the country, the Government and not the woolgrower should pick up the tab.

And I hope these superior moral judgments by the conference will not deter the Wool Corporation from doing their proper duty of trying to cart wool as cheaply as possible.

It seems that an almost unctuous colonialism still lingers on in shipping circles.

***
3.
A Modest Member of Parliament [Bert Kelly], “Sweat bands needed — it’s a killing pace,” The Australian Financial Review, July 15, 1977, p. 3.
Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 165-68, as “Shipping and the Jackson Diagram.”

Eccles is always nagging me about the damage done to Australia’s development by our Navigation Act, particularly that section which forces us to use Australian ships to carry out interstate shipping cargo.

The utter awfulness of the situation that this has brought about is shown in a diagram which Eccles culled from the Jackson Committee Report.[Jackson, R. G. (chairman). ‘Policies for Development of Manufacturing Industry’, Green Paper Report, October 1975.]

The diagram shows that in 1975 the cost to carry cargo from Sydney to Perth (2,100 nautical miles) was more than from Sydney to London (11,400 miles).

Or, going north, it costs more to carry cargo from Sydney to Townsville (1,200 miles) than to Singapore (4,300 miles).

And I notice that the Industries Assistance Commission commented that because we are forced to carry phosphate rock from Christmas Island to Australian ports using some Australian ships, this increases the cost of phosphate rock to the Australian farmer by $10 million a year.

There are many reasons for the high cost of Australian shipping.

The cost of per ton mile carriage is always less on a long haul than on a short haul. One reason is that the very heavy loading and unloading costs have to be paid for in both cases and if the costs are spread over a short haul they always look larger than spread over a long haul.

And bigger ships can be used on the longer hauls to Europe and other popular ports because there is more cargo to be carried.

So the cost per ton mile is always bigger on short hauls than on long hauls.

But there are less worthy reasons for the awful cost of interstate shipping. One is the cost of providing accommodation to Australian scales.

BHP say that it costs about $16,000 per seaman to convert an overseas ship to Australian crew standards. And when you have done that you have to pay Australian wage rates.

For every dollar to sail a British ship, Australia has to pay $3.60. Even Scandinavian conditions, which are twice as expensive as the British, only come to 55 per cent of Australian crew costs.

Having altered the ship to our standards and paid the crew at our wage rates, we have to contend with Australian strikes. Of the 7670 ship days available to the BHP fleet in 1975, more than 12 per cent were lost by strikes.

But perhaps the biggest slug that our interstate freight rates suffer is stevedoring charges.

If we ship from Sydney to London there is only one Australian stevedoring charge, but if we ship from Sydney to Perth there are two.

These costs get built into the freight costs, so it is not surprising that our interstate freight rates are so high.

There are a lot of sheep and cattle being shipped from Australia to overseas countries and in some cases they need baled hay.

The cost of growing, cutting, baling and stacking good quality hay is about $1.50 a bale, or that’s what South Australian farmers have been getting for it. But it will cost $3,00 a bale just to lift it from a lorry to the ship about 15 feet away.

An examination of the costing sheets of a stevedoring company showed that hay was being handled at the startling speed of five bales per man hour.

It is also interesting to note that one of the items in the miscellaneous column was purchase of sweat bands. I wonder how much sweat you would lose loading bales at the rate of five an hour.

Our wharf costs are the highest in the world but there is a glimmer of hope that under the new arrangements, with the stevedoring companies being responsible for paying the idle time of their own wharfies, instead of this cost being spread over the whole industry, things may improve. They certainly couldn’t be worse.

The high cost of Australian shipping is why Utah are determined to resist using Australian manned ships.

***
4.
A Modest Member of Parliament [Bert Kelly], “Charlie and the floating feather beds,” The Australian Financial Review, October 3, 1975, p. 3.
Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 163-65, as “Shipping and Charlie Jones.”

I’m sure the Minister for Transport, Charlie Jones, means well, but he does badly.

When he was in Opposition he used to thunder away about how he would soon have most of the Australian trade carried in Australian ships built in Australia.

This has not happened and if it had, the increased costs would have been devastating.

Even now, shipping freights are at a rate that is ruining exporters and which will switch trade to land transport where possible.

Let us follow Charlie step by step along his tragic path.

After he became Minister for Transport he soon found that it was impossible to build ships economically in Australia, that the 45 per cent shipbuilding subsidy is equivalent to a protective tariff of about 120 per cent — that this is the protection needed to protect us against the Japanese, who buy our coal and our iron ore, ship them to Japan, turn them into steel and then into ships and then undersell us by that margin.

So Charlie soon found that he couldn’t afford to force all our ships to be built here. But even if we use ships built overseas we still have to stagger under the most grievous shipping freight burden.

A few weeks ago he announced a 40 per cent increase for interstate shipping freight rates.

There was an immediate howl of anguish from the poor pathetic Tasmanian Labor Party members, who came scurrying to Canberra to beg for mercy. But in vain.

Then they are reputed to have decided that desperate measures were needed and they ought to arrange another Tasmanian by-election.

They were last seen drawing lots to see which of them was to be sacrificed on the altar.

But I suppose it wasn’t poor Charlie’s fault. The problem is that we have now a system of feather bedding the maritime unions which makes it impossible to operate economically on the Australian coast.

For instance, the basic pay for a seaman is $9,900 a year with 24 weeks’ holiday. How Fred would like that kind of treatment.

The coastal freight increase will pretty well cause poor little Tasmania to wither on the Australian vine. In mainland ports shippers will be able to switch from sea to land transport and this they will do. But perhaps it will have other effects.

For instance, the cost to ship steel from Sydney to Darwin will be about $71 a ton, while it would cost about $30 to ship the same cargo from Singapore.

And as Darwin now needs large amounts of steel, it will probably be imported, with serious effects on the unemployment in Newcastle and Port Kembla.

But it’s not only the feather bedding of the maritime unions that is killing the Australian shipping trade.

Even if we could afford to pay the Australian wage rates it would be dangerous to place ourselves in the hands of the maritime unions to a greater extent than we are now.

And indeed, it is bad enough now. For instance, in July, 34 tugmen in Geelong went on strike for conditions even more generous than they were then receiving.

The port was held up for nearly two months with a slackening of employment and an adverse effect on development there, and the likelihood that shipowners will avoid using the port of Geelong in the future.

And I understand that the disadvantaged workers in the Geelong area were levied to pay the strike pay of the people who were hurting them.

But a far starker picture of extortion and blackmail can be found in the recent report of Mr Justice Sweeney, acting as a Royal Commissioner into payments to maritime unions.

In case after case he spells out the way officials of maritime unions have held the coastal shipping industry to ransom, and frequently solely for their own personal gain.

I quote from page 15 of the report:

I am satisfied that the reason this payment was demanded and received was to place moneys at the disposal of Wells and Rawlings (union officials) which could be used for their own purposes and in Rawlings’ case, with Wells’ agreement, for Rawlings’ own personal benefit. The payments were not related to any union campaign at all.

So the maritime unions are quietly and efficiently killing coastal shipping, except in Tasmania, where they are killing Tasmanian instead.

The Navigation Act, which enforces the carriage of Australian cargo in Australian ships, is becoming the heaviest cross the economy carries. And certainly it is one of the most effective barriers to the development in outlying areas.

Ask the citizens of Darwin, Wyndham, King Island and Kangaroo Island what they think of the cost of the service they get from the floating feather beds that serve them.

***
5.
A Modest Member of Parliament [Bert Kelly], “Why one can’t be a union basher,” The Australian Financial Review, September 10, 1976, p. 6.

At this late stage of my political life, I now realise that the way to get on is not to say anything worthwhile — anything definite.

For instance, if I am frank and foolish enough to point out that the fundamental cause of our economic mess is the stupid and irresponsible behaviour of the union leaders, then some pasty faced commentator in the Canberra press gallery, who has never had a blister on his hands in his life and has never been out of his ivory tower, will brand me a union basher, and then I would be washed up on the political beach.

So I must learn not to be a union basher.

I must be silent when the soldier settler farmers on Kangaroo Island are set upon by a ruthless union organisation because they employed non-union shearers.

The union action of declaring them black would have broken them if they hadn’t had the guts to stand up for themselves.

But I guess the commentators were far too busy watching their footwork too anxious about their rating as up-and-coming people to get into that fight and dirty their hands in such a lowly cause!

I suppose the way to attract their favourable attention is not to point out that the shipbuilding mess is a self-inflicted wound by a recalcitrant and irresponsible union movement.

But can anyone blame BHP for not being willing to invest in more modern shipbuilding equipment when they must have known from bitter experience that if the industry did clamber to its feel, the union leadership would clobber it to its knees again?

But if a conservative politician dares to point out publicly what everyone admits in private, then he is called a union basher and that’s the end of him!

And I suppose I should stand quietly by while my poor little battlers in the bush are bled white by the unions.

I mustn’t talk about the poor blighter who has been mustering cattle for a week on a run without fences and then is told to let the cattle go again because some tired railway workers, who wouldn’t know real work if they saw it, feel a strike coming on.

I must learn to be silent when I see the vehicle unions crucifying the Australian car industry, doing to it what they succeeded in doing to the British car industry — using the same methods and perhaps the same people.

At least they speak the same accents.

And I mustn’t be critical of the position on the waterfront — I mustn’t say anything about the $15 million we are paying each year for waterside workers to sit on their tails doing nothing because the stevedores can’t dismiss them.

I mustn’t mention the golden handshakes of over $10,000 a man we try to give waterside workers we don’t need if only we could get them to hold their hands out.

But who can blame them for not wanting to leave so soft a feather bed as the Australian waterfront?

And certainly I must not say anything about the shipping unions.

I know that coastal shipping costs are wringing the necks of Tasmania and Darwin and similar places and inhibiting development all over Australia.

I must not mention that a sailor gets 20 weeks holiday a year and the most luxurious living conditions while at sea, but I must let them continue to be the greatest barrier to Australia’s economic development.

I must not blot my copy book by being branded as a union basher by the wise ones in Canberra.

But even in Britain they are allowed to whimper the facts of life.

Only a little while ago Mr Paul Johnson, the editor of the New Statesman and one of the foremost British socialists said:

But the tragic truth is that British socialism has had a devastating case to make out against the post-war union leadership. Men ought to be judged by their record and their record is contemptible.

Smug and self-assured, oblivious of any criticism, they have encouraged British industrial workers in habits and attitudes, in rules and procedures, in illusions and fantasies which have turned the British working class into the coolies of the Western world and Britain into a stinking, bankrupt, industrial slum.

That reads like union bashing well done.

But I mustn’t say anything like that — I must learn to sit twiddling my thumbs while the unions wring our economic necks.

The important thing in politics is not to get a reputation for saying anything that matters otherwise some smart sod will brand you as a union basher.