Bert Kelly, The Australian Financial Review, December 24, 1971, p. 3.

I hope that Fred doesn’t get to hear of the mess that our State and Federal Governments have made of the car industry. If he did, he would take my liver out, Christmas though it be.

The car industry can roughly be divided into three parts.

One part consists of four large manufacturers, GM-H, Ford, Chrysler and BLMC. These four make most of their cars from Australian components.

The Government’s recent action is aimed at increasing this percentage still further.

The third group import cars fully assembled. These cars have to pay a high duty of 45 per cent.

You would think that a tariff wall of this height, with the natural protection of high ocean freights, and the effect of the sales tax on the customs duty component of the cost, would be high enough to protect any industry that was good at making cars.

The reason why governments should be blamed is that they encouraged the hot-house growth of the industry without apparently worrying about the inevitable increase in the price of cars or the effect of blocking the channels of trade with countries who buy our products, such as wool.

State governments must take some of the blame.

Each year our Premier goes wandering the world, beating the State drum and inviting everyone to set up factories here. The reception that he gets if he can announce a car factory is deafening.

Fred is not asked to the reception — he’s usually home trying to make enough money to pay off the instalments on his last car. But if he did come, he probably wouldn’t realise the effect of having far too many car manufacturers in Australia.

But it is the Commonwealth that has done most of the damage by handing out overgenerous protection.

The effect of protecting everything that moves is that we have four manufacturers of cars to supply a total of about 400,000 cars.

In the USA they only have four manufacturers for a market of 8 million cars.

Now the Government has interfered to increase yet again, the Australian made component.

The inevitable effect of this will be that the second group, the assemblers, will have two choices.

The first is to cease assembling and to go back to importing built-up cars and paying 45 per cent duty.

The second choice for them is to increase their Australian made component.

But this is only economic if enough cars of a model are made to enable the economies of scale to lower the cost of these components. And it is quite clear that an increase in the sales of a model can only take place at the expense of others already being made here.

There just isn’t room at the top for them all, particularly with GM-H taking up so much room.

Many assemblers will drop off the production ladder, either intentionally or by being pushed off.

No wonder the manager of GM-H received the news with gratification.

And it plays into the hands of the militant unionists who have been twisting the tail of the big manufacturers all the year.

Now, it will be easier for them to give in to the irresponsible union demands, secure in the knowledge that their competitive position against importers and assemblers will be protected.

But the worst thing about the whole business is that it is a decision made by the Government, without the advice of the Tariff Board.

If there had been a Tariff Board inquiry, there would have been public evidence and public report and the facts would have been exposed. But now no one knows what is going on — certainly I’m not told, but I’m only a Member of Parliament.

There are great opportunities for special favours to be done for special people if things are arranged this way. This is not a good way to either govern a country or control an economy.

I am not feeling in a cheerful Christmas mood at the moment, but I suppose I will live through it.

I hope Fred doesn’t learn what is going on. He is getting very tired of the Government preening itself about how much it loves him while at the same time clobbering him in this fashion.

(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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