Kenneth Graham [Ken Baxter], “The Modest Member must not give up,” The Bulletin, December 17, 1977, p. 112.

Bert Kelly is almost a legend. He is one of those rare politicians who actually manages to see the importance of consistent, long-term policies over immediate party advantage.

Unfortunately, Bert Kelly has been the casualty of electoral redistribution. In a contest for pre-selection with the chairman of the Liberal-Country Party Rural Committee, Geoff O’Halloran Giles, he lost.

Hopefully, Kelly’s “Modest Member” column will continue in the Australian Financial Review and the various weekly farm newspapers which carried it on a syndicated basis.

Apart from being a farmer, Bert has the rare distinction of combining his job with a sense of economic rationality.

His views were not always shared by senior Liberal Party ministers, and in particular he was critical of the Prime Minister’s Luddite approach to industrial development.

Contrary to the many views expressed, Bert Kelly saw that planning for manufacturing industry could not take place on the assumption that continually adding more tariff protection would solve industry’s problems.

The closer-to-free trade view which Kelly adopted (and which was supported by a number of Liberal-Country Party backbenchers and a large proportion of the parliamentary Australian Labor Party) found considerable sympathy among the farm organisations.

The major rural export industries still rely heavily on open, industrial markers for the disposal of their products. There is no realistic possibility of working on a cost-plus basis as does much of Australian manufacturing industry.

Rural exports are still earning more of Australia’s foreign exchange than either the mineral or manufacturing export sectors. The proportions are roughly rural industry 45 per cent, mining industry 23 per cent and manufacturing 26 per cent, with other groups making up the balance.

It is not surprising that the major rural industry organisations were greatly concerned when the Australian Confederation of Apparel Manufacturers launched into an attack on Bert Kelly and the policies he espoused during the last week of the Federal election campaign.

The ACAM director, Ray Aitchison, has the distinction of being the only guest speaker at the National Rural Press Club in Canberra who received strong criticism as a vote of thanks, and who saw the rural Press and a number of its national daily associates appalled at the economic nonsense spewed out in the guise of industry policy.

Primary industry is particularly sore about the ACAM because it represents the best example of Australia’s very high levels of tariff protection. In many cases textile factories were established in country towns. They attracted male and female labour away from farms by offering to pay over-award wages. When they were subjected to the pressures of imports and cheaper goods, the textile factories wilted or went cap-in-hand to the Australian Government for yet more protection.

The pressures from the textile industry had direct impact on inflation. Because of the high proportion of female labour and the necessity to pay high wages to attract people into what are often appalling working conditions, the industry added to the wages push of the 1974-75 period.

At the same time the high level of tariff protection applying to the industry also meant that a broad range of goods was being sold at higher-than-necessary prices, and this in turn added to the inflationary process.

On the international trade side, primary producers are now concerned that the insular attitude of the ACAM will jeopardise the trade of $600 million to ASEAN countries. Agricultural trade to this area is as valuable to Australia’s primary industries as is the trade to the EEC.

If a government is prepared to sacrifice that value of exports and the countless jobs which are dependent on it for the spurious argument that the textile industry demands priority, the long-term effect could demand incredible sums of money for further rural adjustment.

There is substantial evidence to suggest that in spite of the increasing protection given to the textile industry in Australia:

  • The number of people employed is continuing to decline because the demand is flagging for Australia’s textile production.
  • The rate of technological change has not been accelerated, and the industry, with some 930 firms, is still organised largely on the basis of a 19th century workhouse.
  • It is not only the imports from ASEAN and other low labour-cost countries which the Australian textile industry is unable to compete against, but also those from highly industrialised countries such as the United States. The classic example is the effective protection of 100 per cent of bedsheeting imported from the U.S. which cannot be satisfactorily produced in Australia.
  • Larger companies operating in the field have used the combination of tariffs and import quotas to set up a lucrative market for import quotas and the firms crying out for protection are often the ones which hold the import quotas.

Rural industry is all the more jaundiced about the Australian textile industry because it has been receiving high, in fact excessive, levels of protection since 1929 when it was granted infant industry status.

There has been no serious attempt on the part of the industry to countenance structural adjustment. The increasing tariff and quota protection has isolated the industry more and more from the market forces upon which it is so allegedly dependent.

The situation would quickly be brought to a head if the Australian Government agreed to the recommendation offered in the Industries Assistance Commission report on the Australian Ball Bearing industry that instead of increasing tariff protection, the industry be paid a subsidy equivalent to the protection requested. If this is accepted, it would show the taxpayer the actual cost of tariff protection and would bring the whole issue under public scrutiny at budget time.

From a recent poll taken among a broad cross-section of leaders of industry, trade unions and other organisations, it is clear that over 80 per cent of people want tariff reform and the arguments which are put forward by ACAM and the like are those of a small but very vocal minority.

While Bert Kelly may have retired from parliament, primary producers are hoping like hell that he will not give up the cause. He is needed desperately at the moment.