Bert Kelly’s review was spread over three articles:
1. “Adam Smith’s soothing words,” The Australian, August 11, 1986, p. 11.
2. “Turning tariff somersaults,” The Australian, August 18, 1986, p. 11.
3. “How Rattigan took on the protectionists,” The Australian, August 25, 1986, p. 11.
Bert Kelly, “Adam Smith’s soothing words,”
The Australian, August 11, 1986, p. 11.
It is a fortunate coincidence that I wrote the three recent pressure group articles [online at 1, 2, and 3] before Alf Rattigan’s book, Industry Assistance: The Inside Story, was published by Melbourne University Press. His book is a revealing description of the means which special pressure groups use to protect their special interests which are frequently opposed to those of the community as a whole.
Rattigan was appointed chairman of the Tariff Board in 1963 and was later chairman of the board’s successor, the Industries Assistance Commission, in 1973. He really went through the pressure group mangle, the handle of which was enthusiastically turned by manufacturers, secondary industry lobbies, politicians and bureaucrats.
When Rattigan was appointed to the Tariff Board in 1963, I was engaged, alone in Parliament, in a one-sided bitter battle with John McEwen, the Country Party Minister for Trade, trying to get tariffs lowered. So when I was told of Rattigan’s appointment and that he came from McEwen’s stable, the Department of Trade and Customs, my heart was heavy indeed.
I now quote from my book, One More Nail, published in 1978:
When I heard that the Government had appointed Rattigan from the Customs Department, which is notoriously high protectionist, I was full of foreboding. I rang my father to give him the sad news. “Who is it?” he asked. “Rattigan,” I replied. “He will be all right,” he said comfortingly, “he takes a long while to catch on but when he does he does not easily let go.”
My father knew this because Rattigan had worked in the Tariff Board when my father was a member. Time was to show how spot-on was my father’s assessment.
Rattigan did indeed take some time to catch on but when he did, he hung on in spite of all the skulduggery ranged against him. It must have been a shock to him to find how rough and cruel was the pressure group world into which he had wandered.
It was to me also when I blundered in Parliament and then into the tariff battle, pushing from behind by my father and the ghost of a previous member for Wakefield, Charles Hawker. I arrived there thinking that, because McEwen was the leader of the Country Party, he would certainly be a low protectionist. I learnt quickly and painfully that this was not so. Indeed I used to rather immodestly claim and indeed still do, that I have been belted by the best people in the land.
I was really hammered out on the McEwen anvil. It wasn’t much fun and it helped make a man of me. But I doubt if Rattigan knew what would happen to him.
Well, he soon learnt. If he had been a student of philosopher Adam Smith, he would have recalled how Smith put it. Tariffs were unknown then but “mercantilism” was the word used to describe the way governments gave particular advantages to particular people at the expense of ordinary people. Adam Smith said:
The member of Parliament who supports every proposal for strengthening mercantilism is sure to acquire not only the reputation for understanding trade, but great popularity and influence with an order of men whose number and wealth render them of great importance. If he opposes them, on the contrary, and still more, if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction arising from the insolent outrage of furious and disappointed monopolists.
I wish I could write like that.
That quotation used to be sometimes sent to me as comfort when I was being sorely set about by the insolent outrage of furious and disappointed secondary industry leaders and organisations, but Rattigan needed comfort far more than I did.
I could lose myself in battles about wheat or wool or in mean and menial party politics, but Rattigan had no let-up at all. He lived all the time in an administrative swamp in Canberra, up to his armpits in alligators.
Bert Kelly, “Turning tariff somersaults,”
The Australian, August 18, 1986, p. 11.
When you read Alf Rattigan’s book, Industry Assistance: The Inside Story, you realise what a tough trot he had with the ministers under whom he operated as chairman of the Tariff Board and later of the Industries Assistance Commission (IAC).
They claimed to be low protectionists — indeed two were members of the Country Party which had a prominent plank advocating tariff reduction — yet they quickly threw this handicap overboard when it seemed to be preventing them from pandering to the high protectionist pressure groups. In 1914, when Ginger was given the choice of enlisting in the infantry or cavalry, he joined the infantry. When asked why, he replied that one day the retreat would be sounded and then he did not want to be hindered “by no plurry horse!” Rattigan’s ministers did not want to be hindered by awkward principles either.
I wrote last week about my mortification on finding that John McEwen, the leader of the Country Party, was the chief architect of our tariff policy between 1950 and 1970. However, Rattigan admits, and I acknowledge, that although McEwen knew that he was acting contrary to his party’s principles, he really believed that he was right. Rattigan says:
In my opinion McEwen’s support for the manufacturers came not only from a desire to get their political support but also from a conviction that the policy he wanted to implement — “all round assistance” — would develop the Australian economy. The manufacturers would receive the tariff protection and the farmers and miners the tax concessions and subsidies required to keep all three types operating profitably — and the manufacturers, in particular, would increase production.
That is what made McEwen so powerful and dangerous. He really believed he was right. He had a kind of religious zeal.
His successor, Doug Anthony, did not have that advantage, though he had others. But he was uncertain if he really believed in protection or not. However, he knew that his mentor McEwen did, so it must be a good thing. Even so, it was hard to follow his mental processes. For instance, he said in 1973:
The most important reason for trading is not to export, it is to import. Countries in fact engage in trade so that they can import. They sell their goods and services to the world to gain the means of exchange they need to import goods and services and they cannot produce, or give their people greater choice or take advantage of the greater efficiencies of other exporting nations in certain fields … If a country restricts its imports it is limiting its potential for increasing the standard of living of its people.
That sounds like Eccles at his best; imports are evidently good things.
Yet in Parliament in 1979, when reporting proudly on his successful bargaining in Tokyo in the GATT negotiations, Anthony said:
Australia has achieved a meaningful and advantageous settlement with the USA, the EEC and Japan without reducing the current level of protection on a single tariff item.
So now imports are bad things. I don’t think Doug tried to confuse us, he just did it naturally. You can imagine how easily influenced he was by his department, particularly when farmers were as confused as he was.
When Labor won government in 1973, Jim Cairns was put in charge of the IAC. When he was the Labor shadow minister for trade, he was a low protectionist. In 1967 there was a tariff debate in which I could take no part as I was then wearing my ministerial muzzle.
Rattigan tells on page 33 how Cairns led the Labor Party attack on the way McEwen was administering the Tariff Board and accused him of appointing Trojan horses to the board and asked that witnesses asking for protection should be obliged to reveal their contributions to political parties.
But when Cairns became minister for trade he quickly became as high protectionist as McEwen or Anthony.
When the coalition government took over in 1975, the IAC came under Fraser’s domination. He did not seem to believe in anything much besides being a world statesman and winning elections. Whenever he went overseas he made splendid speeches about lowering trade barriers but when he returned home he would immediately use all his influence to keep them in place.
While the ministers who controlled him were demonstrating their superior footwork in changing their ground, Alf Rattigan was quietly and courageously taking them all on, and their departments and pressure groups too.
We owe him an immense debt of gratitude that he stuck it out as he did.
Bert Kelly, “How Rattigan took on the protectionists,”
The Australian, August 25, 1986, p. 11.
As chairman of the Tariff Board and later the Industries Assistance Commission, Alf Rattigan had to stand firm against all kinds of pressures. And as his book, Industry Assistance: The Inside Story, shows, he had to work with ministers who were all protectionists at any price.
Then there were the pressure groups who tried to subvert him and his principles, and the bureaucrats who were willing to help them do this.
The pressure groups who opposed Rattigan were led by the Chamber of Manufacturers who were powerful people indeed. However, I have a suspicion that most of their members did not really understand the damage that tariffs did to exporting industries.
I have often attended meetings when manufacturers would display a frightening ignorance about economics. They would be genuinely surprised to be told that the cost of protection is borne, in the end, by exporters because a tariff, for instance, on nappies gets built into the CPI, then into wages and then along the production line until it reaches the exporter, who can pass it no further.
And as the cost of the tariff was known to be at least $6,000 million, so this was the size of the tariff burden that exporters were carrying. Perhaps manufacturers who were busy running their factories might not know this but surely the officials in the protectionist lobbies must have known.
The bureaucrats who opposed Rattigan I divide into two groups. The first were composed of genuine protectionists who were certain that tariffs were good things and the more of them there were, and the higher, the better. They were like McEwen; there was a missionary zeal about them which made them hard to handle, particularly when they knew their minister was on their side. However, they were basically honest.
That is more than I can say for the second group, who knew on which side their bread was buttered — how to get on in the service, or outside it too — so they kept close to their minister and were up to all the skulduggery known to bureaucrats.
Those who have watched Yes, Minister will have some understanding of the way they would go about things. They were competent indeed. I am amazed at the benign way that Rattigan wrote about their machinations. But that was typical of Rattigan — he behaved like a gentleman, which sometimes seemed to rattle his opponents. Never once did he offer to give me any inside information, which he must have known I would use effectively, if he thought he should not give it to me.
Rattigan had plenty of enemies but he also had friends. He had two in the Country Party, Don Maisey, the MHR from WA, and Senator Tom Bull from NSW. It took a lot of courage to challenge McEwen as they did; he was not known as Black Jack for nothing.
Rattigan was also courageously backed by some of the farmers’ organisations, particularly the Australian Graziers Association and, later, the NFF. This was not easy when McEwen was in charge, after all, he was the leader of the Country Party, which this group had fanatically supported for many years.
It was all too easy for a minister, backed up by all the resources of a department, and who is used to dealing with opponents in Parliament, to pour a bucket of scorn on a farmer who felt deeply about tariffs but who could not handle himself as the minister could. So many farmers were made to look foolish when helping Rattigan and his cause, but they stuck to it manfully. They do not look foolish now.
Rattigan was fortunate in the backing he received from the press. It took guts to tell the world that McEwen was wrong. Maxwell Newton (before Rattigan [not according to this 1984 interview with Maxwell Newton, where he says, “Alf Rattigan, when he was Chairman of the Tariff Board, was tremendously helpful to me.”]), Max Walsh, Paddy McGuinness, Alan Wood, Tony Thomas and Warwick Bracken did this, to their everlasting credit. There were no respected journalists who were prepared to carry the protectionist torch and there were no respected economists to do this either.
Rattigan’s greatest achievement was to bring the tariff debate out from the smoke-filled bureaucratic rooms into the revealing light of day so that, gradually and painfully, everyone could understand that there is indeed no such thing as a free feed, that some group always pays for protection for another group.
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