Other entries featuring Bert Kelly»

Bert Kelly, December 31, 1970. Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 100-02, as “Iron and Steel (1)”.

While all my parliamentary colleagues (and most of you other sods) have been lying around on the beach, what has the poor old modest Member been doing? Yes, you are right. He has been swotting away at tariffs under Eccles’ stern and eagle eye. I wish Eccles had never been born.

The advocates of protection are always using the infant industry argument, namely, that though high tariffs may not be economically sensible when industries are fully developed, they are often necessary to get an industry started, to encourage people to build the factories and buy the machines and get going. The inference is that after this period, tariff protection would not be necessary. As an illustration of the success of this argument, they always cite the iron and steel industry as the shining example.

When this industry started in Australia, it was protected by tariffs. It does not use its protection in a considerable proportion of its production because it doesn’t need to — because it is good at producing its main lines. But the tariff protection still stays on. Why? Some people say that this doesn’t matter if the protection isn’t used. But it does. For example, the Australian industry doesn’t make the kind of fencing wire that suits the new methods of electric fencing. You can’t blame them for this because there is not yet a great demand for it in Australia. But because there is a duty of $10 a ton on imported wire and because it is not available here, it has to pay the duty and costs the farmer more.

There are a great many similar examples of this. Many particular sizes of structural steel are not made here just because there is not enough demand for that particular size and shape. But duty free admission of these sizes is not allowed, so the duty has to be paid.

If we are as good at producing steel as everyone says we are, then I would think that the duties could well come off altogether. There would still be the very considerable natural protection of freight costs and the Australian industry has the great advantage of being close to its market. To lower the duty would at least let in some badly needed competition.

But there are some tariffs on iron and steel products that are well and truly used and the classic case is stainless steel. Here the duty is 35 per cent. It is here that the “infant industry” argument starts to look a bit loose. To picture the Broken Hill Proprietary Company Limited as an infant is really straining credulity a bit far.

When city people go to the Show they may see the beef classes being judged, if they are lucky. They are rightly impressed by the sleek appearance of the young bulls and they may think what wonderful converters of grass to flesh they are.

It is only when they visit the studs and see the way that these young bulls are foster-mothered that they realise they have been had. At “feeding” time the young bull gets all excited as he sees his cow approaching. You think it is love calling. She is put in the bail, and what does the bull do then? No, you are wrong, he doesn’t. Down on his knees he goes to get at the udder of the poor skinny cow that is half his size, and he sucks away greedily.

Well, it’s all right (perhaps) to foster-mother young calves, but it is silly (and the beef industry knows this) to foster-mother big bulls. It tends to breed the milking quality out of the real mothers. And it seems a bit silly to me to use the infant industry argument with stainless steel.

It is true that the manufacture of stainless steel is an expensive process and the company would expect to lose money during its developmental stages. Well, Fred loses money each time he clears a new piece of scrub — he doesn’t expect to be helped for that. No farmer expects all his paddocks to be equally fertile — equally profitable. You would think that if you were as big and as profitable as the Australian iron and steel industry that you would take the rough with the smooth, particularly if you had an oil well in the back paddock.

There is an annual requirement of about 27,000 tons of stainless steel in Australia. This now costs us about $7m extra because of the duty. The main competition comes from the Japanese who buy our iron ore, nickel and coal, ship them to Japan, make them into stainless steel and then ship them back here again and have to climb over a 35 per cent tariff wall.

It is about time that this big bull was weaned.

(in order of appearance on Economics.org.au)
  1. Bert Kelly on Journalism
  2. Move for a body of Modest Members
  3. Modest Members Association
  4. Bert Kelly's Maiden Parliamentary Speech
  5. Government Intervention
  6. 1976 Monday Conference transcript featuring Bert Kelly
  7. Petrol for Farmers
  8. Some Sacred Cows
  9. Experiences in Parliament
  10. Spending your Money
  11. Who needs literary licence?
  12. A touch of Fred's anarchy
  13. Supply and Demand
  14. Bert Kelly on Disaster Relief
  15. Bert Kelly Wants to Secede
  16. Under Labor, is working hard foolish?
  17. An Idiot's Guide to Interventionism
  18. Bert Kelly Destroys the Side Benefits Argument for Government
  19. Bert Kelly gets his head around big-headed bird-brained politics
  20. First Modest Member (Bert Kelly) AFR Column
  21. Second Modest Member (Bert Kelly) AFR Column
  22. Third Modest Member (Bert Kelly) AFR Column
  23. Fourth Modest Member (Bert Kelly) AFR Column
  24. Fifth Modest Member (Bert Kelly) AFR Column
  25. Sixth Modest Member (Bert Kelly) AFR Column
  26. Bert Kelly on the 2011 Budget and Australia's Pathetic Journalists and Politicians
  27. Bert Kelly, Bastard or Simple Sod?
  28. Liberal Backbencher Hits Govt. Over Import Restrictions
  29. Bert Kelly feels a dam coming on at each election
  30. Bert Kelly Enters Parliament
  31. Why take in one another's washing?
  32. Bert Kelly breaks the law, disrespects government and enjoys it
  33. Gillard's galley-powered waterskiing
  34. Can price control really work?
  35. Should we put up with socialism?
  36. We're quick to get sick of socialism
  37. Time the protection racket ended
  38. Can't pull the wool over Farmer Fred
  39. People not Politics
  40. Bert Kelly admits he should have had less faith in politicians
  41. Labor: a girl who couldn't say no
  42. Why leading businessmen carry black briefcases
  43. Ludwig von Mises on page 3 of AFR
  44. Mavis wants the Modest Member to dedicate his book to her
  45. Time to Butcher "Aussie Beef"
  46. Bert Kelly reviews The War Diaries of Weary Dunlop
  47. Bert Kelly reviews We Were There
  48. Tariffs get the fork-tongue treatment
  49. Bert Kelly reduces government to its absurdities
  50. Politician sacrifices his ... honesty
  51. It's all a matter of principle
  52. Bert Kelly Destroys the Infant Industry Argument
  53. Bert Kelly Untangles Tariff Torment
  54. Bert Kelly resorts to prayer
  55. Eccles keeps our nose hard down on the tariff grindstone
  56. "Don't you believe in protecting us against imports from cheap labour countries?"
  57. Even if lucky, we needn't be stupid
  58. Great "freedom of choice" mystery
  59. Small government's growth problem
  60. Tariffs Introduced
  61. More About Tariffs
  62. Sacred cow kicker into print
  63. Modest Member must not give up
  64. Traditional Wheat Farming is Our Birthright and Heritage and Must be Protected!
  65. Bert Kelly brilliantly defends "theoretical academics"
  66. The Society of Modest Members
  67. John Hyde's illogical, soft, complicated, unfocussed and unsuccessful attempt to communicate why he defends markets
  68. Modesty ablaze
  69. Case for ministers staying home
  70. The unusual self-evident simplicity of the Modest Members Society
  71. Animal lib the new scourge of the bush
  72. The Association for the Prevention of Cruelty to Krill
  73. Repeal economic laws, force people to buy new cars and enforce tariffs against overseas tennis players
  74. Thoughts on how to kill dinosaurs
  75. Let's try the chill winds
  76. Taking the Right's road
  77. Bert Kelly: "I did not try often or hard enough"
  78. Bert Kelly "lacked ... guts and wisdom"
  79. A look at life without tariffs
  80. The Gospel according to Bert
  81. Tiny note on Bert Kelly's column in The Bulletin in 1985
  82. Why costs can't be guaranteed
  83. Hitting out with a halo
  84. Paying farmers not to grow crops will save on subsidies, revenge tariffs, etc
  85. "The Modest Farmer joins us" | "How The Modest Farmer came to be"
  86. Bert Kelly Destroys the Freeloading Justifies Government Argument
  87. Government Intervention
    vs
    Government Interference
  88. Bigger Cake = Bigger Slices
  89. Bert Kelly on the Political Process
  90. Charabanc: Part 1
  91. Charabanc: Part 2
  92. Charabanc: Part 3
  93. Relationships with the Liberal Party
  94. Tariffs = High Prices + World War
  95. Bert Kelly's Family History
  96. Bert Kelly's Pre-Parliament Life
  97. Why Bert Kelly was not even more publicly outspoken
  98. WEATHER IS USUALLY UNUSUAL
  99. How to stand aside when it's time to be counted
  100. How the Modest Member went back to being a Modest Farmer
  101. My pearls of wisdom were dull beyond belief
  102. Bert Kelly on Political Football
  103. Ross Gittins Wins Bert Kelly Award
  104. Interesting 1964 Bert Kelly speech: he says he is not a free trader and that he supports protection!
  105. This is the wall the Right built
  106. Has Santa socked it to car makers?
  107. Is the Budget a cargo cult?
  108. Will we end up subsidising one another?
  109. Do we want our money to fly?
  110. Can a bear be sure of a feed?
  111. How to impress your MP -
    ambush him
  112. The time for being nice to our MPs has gone ...
  113. Don't feel sorry for him -
    hang on to his ear
  114. Trade wars can easily end up on a battlefield
  115. Tariffs Create Unemployment
  116. Bert Kelly recommends Ayn Rand
  117. Bert Kelly's Satirical Prophecy: Minister for Meteorology (tick) and High Protectionist Policies to Result in War Yet Again (?)
  118. Bert Kelly in 1972 on Foreign Ownership of Australian Farmland and Warren Truss, Barnaby Joyce and Bill Heffernan in 2012
  119. Parliament a place for pragmatists
  120. Of Sugar Wells and Think-Tanks
  121. Bert Kelly: "I must take some of the blame"
  122. A Modest Farmer looks at the Problems of Structural Change
  123. Government Fails Spectacularly
  124. Know your proper place if you want the quiet life
  125. Bert Kelly on political speech writers
  126. Perish the thawed!
  127. Modest Farmer sees his ideas take hold
  128. Max Newton: Maverick in Exile
  129. Why no-one nails the Big Green Lie
  130. A case for ministerial inertia
  131. Why politicians don't like the truth
  132. Ominous dark clouds are gathering
  133. Better to be popular than right
  134. Crying in the wilderness
  135. Ivory tower needs thumping
  136. Bert Kelly asks, "How can you believe in free enterprise and government intervention at the same time?"
  137. Rural Problems
  138. Unholy state of taxation
  139. Boring economics worth a smile
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