A Modest Member of Parliament [Bert Kelly],
“If we were English we’d laugh at ourselves,”
The Australian Financial Review, August 19, 1977, p. 9.
Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 91-93, as “Textiles (2).”

There’s one quality above all that I envy the English and that is their ability to laugh at themselves.

A classic example of this can be seen in an article in Punch, April, 1975, when the fishermen of Britain acted to stop competition from imports from the European Economic Community.

It is entitled, “Quick, the Drawbridge,” and the second paragraph reads:

Faced with the threat of frozen fish imports which were not only foreign, but cheap, these brave descendants of Drake and Nelson did the proper British thing: they organised a blockade. We may be in the Common Market, but that is no reason why foreigners should be allowed to meddle with our sovereign right to maintain inflation at the level to which we have become accustomed.

The blockade succeeded in pushing fish prices up by 50 per cent — a remarkable demonstration, you will agree, of what we in this great country can still do when we are up against it and, without doubt, the most impressive stand against the European menace since the epic struggle against French eggs.

Our rate of inflation, Mr Healey noted the other day, may soon be double that of our biggest competitors. In short, Britain leads the world!

Our rate of inflation is not the highest in the world, not now, anyway, but it is noteworthy that it is the clothing item that rises faster than the others.

Yet it is clothing and textiles that impose such a crippling burden on the export industries and on consumers generally.

And it is because we protect these industries so lavishly that our customer countries, particularly our ASEAN neighbours, feel impelled to impose barriers in the way of our exports to them.

Eccles has been locked away in his ivory tower doing some quiet measurements of the cost of protecting the clothing and textile industries.

He says that the increased cost of locally produced and imported textiles, clothing and footwear caused by the tariff and quota restrictions comes to $800 million, made up of $600 million for clothing, $130 million for footwear and $70 million for textiles used for final consumption.

This protection costs each Australian family about $200 a year.

Eccles then started to pick other people’s brains.

He said that a State by State breakdown was done of the way the different States benefit from the tariff on clothing and textile industry plus the footwear industry, footwear being another industry in continual trouble.

The benefits to each State of protecting these industries are shown in the first column in the table.

***
__________ Benefit | Burden | Gain or Loss
NSW _______ $187m | $198m | -$ 11m
VIC ________ $312m | $151m |+$161m
QLD ________ $ 25m | $ 86m | -$ 61m
SA _________ $ 22m | $ 51m | -$ 29m
WA _________ $ 7m | $ 47m | -$ 40m
TAS _________ $ 8m | $ 16m | -$ 8m
NT & ACT _____ $ 0m | $ 12m | -$ 12m
***

The difference between the States is because some contain more factories making these goods than other States, eg Victoria, having more such factories, gains most while the NT and the ACT (the Territories), having no factories, gain nothing.

The second column, the burden, is worked out on the assumption that the people in all States use the same quantities of clothing, textiles and footwear.

It simply measures the burden.

The last column shows that Victoria gains while the other States lose, particularly Queensland.

When Eccles had exposed this rather odd picture I defended these industries on the ground that they played an important part in decentralisation, but Eccles brushed this aside.

He says that 74.5 per cent of the employees in these industries are located in Melbourne and Sydney, 84.5 per cent are located in the six State capitals and 92.5 per cent are in the six State capitals plus Newcastle, Wollongong, Geelong and Launceston.

So it is hard to justify protecting these industries on the grounds of decentralisation.