Bert Kelly, The Bulletin, October 23, 1984, p. 144.

Last week I described the importance of the tariff wall to the citizens of the Living In the Past (LIP) city because, sheltered behind this wall, their protected industries are encouraged to give in to extravagant wage demands from their powerful unions and then these are passed on to us who live in the rough cruel world (RCW). Then I wondered why the current federal government seems less willing to give its milk down to his kind of blackmail than was the preceding Fraser government, which usually ran to water in spite of splendid speeches.

That the tariff wind has gone round there is no doubt. For instance, on September 17, Prime Minister Bob Hawke addressed the Heavy Engineering Manufacturers Association in Canberra. They meet there every year to beg for yet more protection from the RCW. This time, they were even more vociferous in their demands for increased protection but the PM would have none of it.

After talking about the need for industry to be competitive he said:

This sharpened focus on competitiveness raises doubts about some suggestions that the problems of your industry can be addressed effectively by increased protection from imports and higher public sector expenditure on the output of your industry. Such palliatives could have quite the opposite impact to what is intended. They would raise costs faced by other industries and the community at large. In this way, the national strategy for general economic recovery would be put at risk … We should also consider the increased costs to exporters of increased tariff or non-tariff protection from imports. There is also the possibility of adverse reaction to such measures from our trading partners.

So, clearly, the government realises that higher tariffs are no solution to higher wage demands. Why did not the Fraser government see this also? There are three main reasons.

The Country Party that was and the National Party that is were reared in the McEwen stable where the motto was “Protection All Round.” Second, the Liberals — though eloquent in their determination to reduce trade barriers — were mainly Melbourne-based and most Melbournites have been reared on the tariff bottle.

However, the main reason for the Fraser government’s impotence in this matter was that most of its ministers had been away from their farms for too long and so did not realise how little fat there was on the export industry animal. I know it was a shock to me, when I cam back to the farm in 1977, to discover how farming costs had rocketed while I was busy governing the country.

Being Depression-reared, I was bemused by the high prices that I heard my family was receiving. I remembered that I sold my wool for 12 pence a point the year I got married. So, when I heard that farmers were getting about 250 cents a kilo for wool, I thought they must have money running out of their ears. And a price of $150 a tone for wheat seemed outrageous. But I have found out the heard way that the real price for wool — that is, the price adjusted for inflation — is lower today than it was in 1906 and far lower than in 1947.

I remember selling my wheat in 1932, in the depths of the Depression, for two shillings and two pence a bushel and being sure that I was being ruined. Now, John Hyde (and he is almost always right) tells me that the real price that the farmer today receives for his wheat at the farm gate (expressed in 1932 money) is two shillings and two pence a bushel. So I can understand the difficulty of the Fraser ministers realising what was going on in the RCW. It is hard to get a clear picture of this in Canberra.

You can understand then why the voice of the farmers is so strident when we complain about the way in which increased wage costs are loaded on our backs. And even the miners, who are in the same mess as we are, are trying to screw their courage up to join us in our campaign for a different wage-fixing system. There are a few of them at the RCW headquarters but they are careful not to be noticed. And manufacturing exporters, of whom there are a surprising number, are hit as hard as we are by a wage-fixing system that exposes them to the winds of the RCW. A few of them are with us, too.

The campaigners at the RCW headquarters are well aware that we have a long and bitter battle ahead. Most of us are confident that our cause is so strong that we must win in the end. I am not so sure about this, having seen democracy at work from the inside. We will have a closer look at this next week.

(A copy of John Stone’s lecture can still be obtained by sending $2 to GPO Box 1424, Adelaide, 5001.)