1. Country Party policies may not help farmers but do save seats (The Australian Financial Review, September 7, 1979)
2. Is Anthony ignorant or indifferent on tariffs? (The Australian Financial Review, May 9, 1980)
3. Running with hares can be exhausting (The Bulletin, July 28, 1981) [Republished in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 193-96, as “Mr Anthony”.]
4. Tariff winds now blowing favourably (The Bulletin, August 11, 1981)
5. Anthony to the rescue (The Bulletin, June 7, 1983)
6. Salvation in a sea of scales (The Bulletin, August 2, 1983)
7. Let’s have a quota of principles (The Bulletin, April 3, 1984)
8. A posse goes after Anthony (The Australian, October 7, 1985)
9. Panting in vain for tariff sanity (The Australian, October 14, 1985) — that version of the article has a jumbled and truncated ending, so I instead used the text from the article’s publication in a Victorian rural newspaper where it appeared under the title, “Sorry Doug, subsidies are not the answer,” (Stock and Land, October 17, 1985)
10. Spectre of the bad old days has Eccles in a flap (The Australian, October 21, 1985)
Bert Kelly, “Country Party policies may not help farmers but do save seats,” The Australian Financial Review, September 7, 1979, p. 11.
There has been some nasty scenes in the Modest Farmer’s family lately.
They began when Mr Anthony, the leader of the National Country Party (NCP), made some testy remarks about the “bone-headed behaviour” of some Liberal Party leaders who had the temerity to suggest opposing NCP candidates at forthcoming elections.
Both Eccles and Fred were up in arms about what Mr Anthony said.
They do not often agree about things, because Fred lives with his nose pretty close to the economic grindstone while Eccles spends most of his time in his ivory tower in Canberra, so their paths do not often cross.
I was startled then to find them in agreement on this issue.
I know from bitter experience that Fred feels no particular loyalty to the Liberal Party.
The burden of Fred and Eccles’ complaints about the Country Party was that, though its members were people of the highest personal morality, they were lacking in political principles.
Eccles said bitterly:
They will do anything for votes, even when they know what they are doing is wrong.
Look at their stand on tariffs.
Your mob (I do wish he would be more respectful) are not anything to write home about as far as tariffs are concerned, though I admit your precious Mr Fraser seems to be talking more sense now that he has had his nose rubbed in the economic facts of life since he went overseas and realised the international implications of the nonsense he used to talk about tariffs.
But at least some of his Liberal backbenchers speak out quite loudly and bravely against our present tariff policies.
I suppose Eccles is right about this.
But you never hear a Country Party member say one word in opposition to policies which they must have known were very damaging to their farmers they were pledged to help.
So I suppose I can understand why Eccles is so savage with the backbenchers in the Country Party.
Eccles said sourly:
I don’t think they even care about their farmers.
It’s either that or they haven’t the guts.
I said severely:
It’s all very well for you to spout your economic theories, Eccles, but poor Mr Anthony lives in the rough, cruel political world and not on your ivory tower.
He knows that the Country Party is running out of wind and, if they are to continue to exist, they just have to cling to their seats.
And to do this they just have to have money, Eccles. So Mr Anthony has to keep in with the manufacturers to get the sinews of war to fight the next election.
After all, it was they who provided most of the money to build the Country Party headquarters, McEwen House.
You should give Mr Anthony your sympathy, not your criticism.
I am still regarded as the authority on politics in this neck of the woods so I expected that my opinion would carry the day.
And when Mavis came in to support me I thought we had it in the bag.
“Listen to him for once,” she said severely.
“He mightn’t have many brains but he knows the importance of political footwork. At least he knows what makes political animals tick.”
I couldn’t help thinking that Mavis might have expressed herself in a nicer manner but I was glad to have her help. It is all very well for Fred and Eccles to go round criticising Mr Anthony because he feels that he has to do things that he knows are bad for the farmers he was elected to support, to continue to clobber them with a tariff burden weighing at least $5,000 million a year.
But they are only poor simple farmers without any political experience.
How can they be expected to understand the finer points of political footwork?
It may be true that Country Party policies are harming farmers, but they are being pursued for the best of all political reasons, that is, holding Country Party seats.
That is what politics is all about, as Mavis so rightly says.
But it is pretty hard on us farmers.
Bert Kelly, “Is Anthony ignorant or indifferent on tariffs?,”
The Australian Financial Review, May 9, 1980, p. 11.
Last September I wrote a bitchy article complaining how the National Country Party always left me like a shag on a rock when I was fighting in Parliament to get tariffs reduced.
Both Fred and Eccles were pleased with me; Fred because he knows that, as an exporter, he has to bear the tariff burden and Eccles knows that our tariff policy is an important reason why our economic progress is slow and why our ability to employ people is disappointing.
However, Mavis was cross.
She still fondles a phantasy that I might fight my way back into Parliament, and she knows the surest way to be loved by the electorate is to always have a bob each way if an issue raises its ugly head. She said with wifely wisdom:
You did yourself a lot of harm when you were in Parliament listening to that wretched Eccles.
He may well have been right, but look where fighting his battles has got you, out on your poor old ear!
If you are going to make a comeback you must learn not to take a definite stand, to sway with the wind and to make long wordy speeches saying almost nothing except how pleased you are to be present.
Then no one will be able to pin anything on you and you will be loved by all.
And you were foolish to be nasty to the Country Party.
Many of them are cross with you and that is fatal if you are going to make a political comeback.
Mavis is right, as usual.
That article certainly got me into trouble with the Country Party. I received many critical letters expressing disappointment with what I had said.
They usually began by saying the authors had read my column for years and agreed with me about tariffs.
But they would follow an explanation similar to Mavis’, saying the Country Party could not afford to stand on principle because this might get them into trouble with the manufacturers who paid for McEwen House.
Besides, some Country Party members had factories in their electorates so they had to run with the hares and hunts with the hounds.
But some Country Party disciples were more specific and said there were many Liberal Ministers and members representing rural electorates who also had a bob each way and they thought this was an excuse for Country Party members to do likewise.
That there are chicken-hearted Liberal Ministers and backbenchers I admit with shame, but at least they do not pose as specialists who fight for farmers as do Country Party members.
My point of view was put more poignantly in a letter to a complaining Country Party disciple who thought I had been too tough with the Country Party. To quote:
All the time I was battling for a more sensible tariff policy I used to look first hopefully, then hopelessly, towards the Country Party benches for help, but never once did I get any. But I got help from many Liberals, such as Street, Hyde, Connolly and others. I still stand by what I wrote in the article. It seems to me it must be ignorance, indifference or cowardice that makes Country Party backbenchers sit meekly in their corner while others go down fighting farmers’ battles. And if you do not think these are the reasons, can you tell me what they are?
I have not had an answer nor do I expect one.
So that you can see it is not petty vindictiveness on my part I quote from a speech given by Mr Anthony, the leader of the Country Party, in Parliament.
The debate was provoked by Lionel Bowen in a pathetic attempt to criticise the Government for not telling the country the outcome of recent trade organisations.
In his reply, Mr Anthony, after disposing of Mr Bowen (which was not hard) then went on to express his quiet pride that he had been successful in extracting some trade advantages for us without being forced to reduce any industrial tariffs in return. To quote from Hansard:
Not one single tariff will be reduced … There has been no reduction at all in industrial tariffs … Honourable members must acclaim we have done a magnificent job on our negotiations when we have come out of them without have to pay anything more than making a binding on industrial tariffs.
So there speaks the leader of the Country Party, preening himself he has been able to conclude some trade negotiations with other country without having to reduce tariffs.
Perhaps he does not know that tariff reductions are what farmers want. Or, if he think we are wrong, why does he not tell us so?
As I said in my letter, behaviour of this kind can only be explained by ignorance, indifference or cowardice. I rule out the last with Mr Anthony, but what about the other two?
Bert Kelly, “Running with hares can be exhausting,”
The Bulletin, July 28, 1981, p. 115.
All the time I was in parliament, Mavis used to compare me unfavourably with Doug Anthony. “You most mould yourself on him, dear,” she used to say. “He’s got such a nice, manly grin and a fine, rugged appearance and the engaging way his hair flops over one eye. You must try to be like him.”
She was right, of course, as she almost always is. Besides these attributes that caught Mavis’s feminine eye, Doug has many other attributes, not the least is that, like Brutus, he is an honourable man.
And it is because he is so honourable that I am busily engaged just now in searching for an overseas post for him to retire to.
Doug is not only honourable, he is also competent. His ability to run with the farmers’ hare and at the same time to hunt with the protectionist hounds has made his fast footwork greatly admired.
This has not been easy. It is true that he had a first-class teacher in Sir John McEwen but, since he took over from Sir John, he has performed splendidly in the job.
Of course, there is an element of urgency and compulsion about his behaviour; after all, as leader of the Country Party he is supposed to be on the farmers’ side when tariffs are being discussed because, as exporters, we have to carry most of the tariff burden. On the other hand, the Country Party headquarters in Canberra was built with generous help from secondary industry, so the link with these people is very close.
It has not been easy for Doug to keep in with both camps. And the farmers, particularly since the National Farmers’ Federation (NFF) has been doing its homework so well, have been becoming increasingly querulous about their tariff treatment.
The high protectionists, on the other hand, must be very attached to Anthony, particularly since the clothing and footwear decision.
So Anthony’s performance up till now has filled us all with admiration. But now he is Minister for Trade and Resources and has a particular responsibility to the mining industry; the mining boom is making things uncomfortable for him.
Eighteen months ago, John Stone, the head of Treasury, told us that as the mining industry expanded the consequential capital inflow would inevitably lead to an appreciation of our exchange rate, and the following increase in mineral exports would appreciate the rate still further. This would make it harder for farmers to export unless imports were encouraged to come in by lowering our trade barriers.
Some people used to think that this was only economic theory, but this is not so. The NFF estimates that the exchange rate appreciation that occurred in 1980 cost farmers at least $400 million in lost revenue and the exchange rate has moved a lot higher since then as the capital inflow from overseas accelerates.
So the government has three choices. First, it can sit on the mining industry’s head by stopping its capital inflow, and later its mineral exports. There may be some silly enough to do this, but certainly Anthony would not agree to such a tragic solution. Or the government could do what Stone and others have suggested and encourage more imports to come in by lowering our trade barriers.
Action of this kind would help hold down the exchange rate. This is clearly the proper solution, but it would be hard for Anthony to bite on that bullet with such deep obligations to secondary industry.
The third choice is to do nothing and so let the exchange rate go even higher. This may not have mattered politically a few years ago when farmers were ignorant about the effect of exchange rate movements, but now they know what is happening to them and they do not like it, and are becoming strident in their criticism.
This is why I think that Anthony will soon be seeking an overseas post. As I said before, he is an honourable man. He knows that although he has demonstrated his ability to hunt with the protections hounds and to run with the one hare, the farmers, the task of chasing two hares at once is beyond him.
He can run with the high protectionist hare or the mining hare or the farmers, but not altogether. Those people who have seen a greyhound chasing a hare will realise that not even a Country Party hound could chase two hares together. Anthony knows this and so, being the honourable gentleman he is, I think he will shortly move to an overseas post.
But the problem will still be with us, even if Anthony isn’t.
Bert Kelly, “Tariff winds now blowing favourably,”
The Bulletin, August 11, 1981, p. 100.
Eccles is getting nervous; he is so used to kicking against the wind about tariffs that he gets worried when he finds that the lower tariff cause is becoming popular. After years of warning me about the sin of seeking popularity he now finds that most thinking people, indeed all except the economic troglodytes, now know that tariffs must inevitably gradually come down.
I have no need for Eccles to tell me that the tariff wind has gone round; there are too many straws being carried in the wind to doubt this. One of these straws is the number of speaking invitations I get. This makes Mavis mad. “Why didn’t they ask you when you were in parliament, when you could have won yourself some votes?” she asked querulously.
But Fred explained that most people dislike politicians giving tongue because they persist in talking what Fred calls “party political tripe.” He says that the further behind I leave my political career, the more sought after I will be as a lecturer. Thus is not a very nice thing to say but I fear he is right. The surprising thing is that most of my audiences now ask me to talk specifically about tariffs. There was a time when I had great difficulty in getting mounted on my tariff hobby-horse but now people have it saddled up for me when I arrive at a hall. It is a pleasant change.
Recently I spoke at a Cattlemen’s Union conference at Toowoomba, in Queensland, to a National Country Party meeting at Rankin Springs, in New South Wales, and to a pastoralist and graziers’ group at Carnarvon, in Western Australia; and they all wanted me to talk about tariffs. Evidently, they were all stirred up by the row at the recent Country Party conference at Armidale when many of them got stuck into their leader, Doug Anthony, because of his support of the government’s high protection policy.
It was gratifying to find that all the groups seemed to understand the damage that the rising exchange rate is doing to farmers who sell on the export market. This would have passed over theirs heads once but not now. The excellent work done by the National Farmers’ Federation has borne fruit. Anthony may try to dismiss the NFF effort as “hog wash” but this does not seem to be the opinion of farmers.
As an ex-politician myself I was quick to defend Anthony against the farmers who were angry with him. I know how hard it is to try to run with the farmers’ hare and to hunt with the protectionist hounds. I tried it once myself and I might still be doing it if it wasn’t for Eccles. It is true that Anthony is much more expert at it, having done it for years. But, all the same, it is not easy, particularly when trying to catch the mining hare also. I kept telling the farmers this but it did not seem to comfort them much.
Another straw that shows how the tariff wind has changed is the way my book One More Nail is selling. When we printed 6000 in 1978, all the wise ones grimly warned me that we would never sell half of them. But now there are fewer than 1000 left and they are disappearing so fast that Fred, a cunning sod, says we ought to put the price up. But being a person of principle, I have refused and they are still $9.95.
Another straw in the tariff wind is the publication of my second book Economics Made Easy, which was launched on July 27 by Sir Roderick Carnegie. This sells at $6.95 and Macmillans the publishers tell me that the demand is very brisk. It contains about 90 modest articles that concentrate on economics. I would like to publish its successor Politics Made Plain one day but we will see how Economics Made Easy goes first.
But the most exciting straw in the wind is the proposed launching of The Modest Members’ Society which will take place on August 14. Five years ago it would have been impossible to get such a group together but with the wind coming round from another direction, and the grim examples of the failure of most government interventions so obvious, even the “Nervous Nellies” are trying to screw their courage up to be brave and are hoping to discover minds of their own.
And then there is the Commonwealth Heads of Government Meeting to be held in Melbourne in October. At such gatherings, when held overseas, Malcolm Fraser appears as a statesman of world stature as he eloquently condemns the dreadful damage done by protection policies. Then he rushes home and pushes our trade barriers even higher.
By the way, if people in other States besides Queensland, New South Wales and Western Australia feel neglected because I have not spoken there lately let me know and I will do what I can. I like to distribute my favours equally.
Kind people often tell me how sorry they are for me because I keep trying to knock a few bricks off the tariff wall. “We know you are right, Bert, but surely you must know that the ignorance and the naked self-interest of those who gain from protection in the short term will always outweigh your superior economic logic. You should resign yourself to never getting anywhere.”
Sometimes I do feel like tossing in the towel. One of my worst spots was when ministers in the Fraser Government, after making splendid speeches about the evils of protectionism while overseas, ran to water as soon as anyone huffed at them when they returned home. The decisions on the textile, clothing and footwear industries come quickly to mind, with the car industry close behind. Indeed, there has been plenty to make me miserable as well as modest.
However, Samuel Johnson once said that, though he had plenty to be miserable about, cheerfulness would break through. For instance, I have been gratified recently by the tariff stances of John Kerin, the new Minister for Primary Industry and of Senator John Button, the new Minister for Industry and Commerce. Both seem to be an improvement on their predecessors as far as tariffs are concerned.
But my most recent cause for cheerfulness is a speech given by Doug Anthony, the leader of the National Party, at the Australian British Trade Association Conference in Canberra on April 20. In his speech, Anthony seemed to see the tariff picture in clearer light than he has before. Indeed, the speech could have been written by Eccles himself though he, when posting it to me, added — with customary meanness — a cautionary note telling me not to get too excited.
But both Fred and I refuse to adopt Eccles’ cynical attitude. Fred thinks that Anthony’s improvement is due to the grass roots pressure from the farmers. But I take a different attitude. I think Anthony essentially is an honest man and he really means what he says this time. So I will stick up for him as long as he behaves as he did at this conference.
Well, what did he say that makes Fred and I so excited? Just listen.
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 they cannot produce, or to give their people greater choice, or to take advantage of the greater efficiency 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.
Eccles usually puts it another way. He says: “Every barrier to imports is a barrier to exports.” I think Anthony’s way is better because he makes clear that import barriers lower living standards of the countries that erect them.
Later, Anthony quoted with approval comments made by Lydia Dunn, a member of the Hong Kong Legislative Council, at a recent conference in Hobart. She was discussing the alarming tendency of countries to rush towards protectionism and inflation because of world recession. She said:
The justification for so doing is that governments will thereby bring about a breathing space for economic recovery. This is like giving heroin to a junkie in the hope that with it he will independently achieve a spontaneous cure, so obviating the need for further doses. The result is, quite plainly, agony postponed but death brought nearer.
Now that is a better way of putting it than Eccles uses when he talks about the damage done to industries by keeping them sucking away at the tariff teat when they would be more healthy if they were weaned. I think Eccles is a bit jealous of the way that Anthony expresses himself.
Then Anthony went on to say that we were sitting on the edge of an area that was expanding faster than any other part of the world and this offered us a great opportunity if we would only grasp it. He said:
Australia, for one, if it wants to take its place in this region and gain the benefits that can be achieved, must be prepared to continue the steady lowering of its import barriers that has been begun by the previous government. The process must be steady and the reasons for it must be widely understood. Attempts to bring about a sudden and drastic liberalisation of our trade barriers stand every chance of doing more harm than good. But the barriers must keep coming down. If they don’t, the people being hurt will not be those in other countries; they will be ourselves.
You can surely see now why cheerfulness keeps breaking through.
Bert Kelly, “Salvation in a sea of scales,”
The Bulletin, August 2, 1983, p. 88.
Eccles says that there must be a lot of people on the road to Damascus these days. Also, he has been told that that road is as thick with scales that have fallen from travellers’ eyes as the Stuart Highway, south of Darwin, is thick with beer cans. When I asked him what on Earth he was talking about, he said that a great many people seemed to be seeing much more clearly the damage trade barriers were doing to us. “The scales seem to be falling from their eyes all over the place, Bert,” he gloated. “We used to expect stirring speeches about the evils of protectionism from Fraser when he was in Lusaka or at other overseas places but now people are being quite brave and sensible when they are at home. There must be something queer going on.”
Then Eccles gave me two examples. The first was Doug Anthony, the Leader of the National Party. I recently commended Anthony (B, June 7) for two sensible speeches he has made about tariffs, one in Canberra on April 20 and the second in New Zealand. On June 28, he again gave tongue in Sydney.
He told us that Korea’s resentment of our barriers to their trade, particularly their steel, was leading to reprisals.
In May, the Korea tender for beef imports dropped us from supplying about 95 percent of their market to about 70 percent. The same thing had happened in the tender that closed on June 23.
To quote Anthony directly:
A clear picture is emerging and it is not a pretty one for our beef producers. Despite official protestations, there is sufficient evidence now to suggest that the Korean Government is developing alternative sources of supply for beef. It is preparing the ground to act quickly and strongly if its concerns over increasing import restrictions are not answered. In particular, I believe, it is getting ready to register the strongest possible protest should Australia give greater assistance to the steel industry. There will be no official announcement. That is not the way these things are done. But the threat is there it is very real. If Australia cuts off Korea’s steel exports to Australia, Korea will retaliate with beef and a trade worth $100 million could be in danger.
Certainly Anthony seems to be seeing things clearer than he used to. I am not sure if the scales fell from his eyes on the way to Damascus or Tweed Heads, where the National Party held its conference and where I understood there were some harsh criticisms of the National Party’s tariff performance. There has never been anything wrong with its tariff policy but it never does anything about putting it into practice. Perhaps they are about to spring into action after all these years.
However, the most exciting example of scales dropping from peoples’ eyes was seen in a speech delivered in Melbourne on June 17 by Bill Hayden, our Minister for Foreign Affairs. I was a backbench colleague in parliament of Hayden for some years and I have heard him make some very interesting and commendable speeches about tariffs. Bill slogged his way through an economics degree while he was on the backbench. That was far from easy and he became what the troglodytes would call a member of the dreaded “new class.” As he climbed the political ladder, his tariff voice became muted but now that he is Minister for Foreign Affairs, a great heap of scales seem to have fallen from his eyes all at once, here is part of his speech:
We will have to confront the high cost of the very high level of protection in Australia as soon as economic conditions permit. The cost of protection burdens the less well off and their families. Protection removed about 20 percent of the purchasing power of the poorest 4 percent of Australian households; about 7 percent of the incomes of the next lowest 18 percent but only about 4 percent of the incomes of the richest 18 percent. You can imagine the justifiable outrage in the Labor movement if such a regressive tax, so biased against the poor, was to be explicitly introduced in the budget.
Moreover, the protection tactic isn’t working. The most highly protected industries are the ones tending to contract. Industries Assistance Commission analysis demonstrates convincingly that the most highly protected industries have been able to generate higher profits and concurrently to reduce their work forces; the very opposite to what the unions want. It also tends to restrain technological advances, cuts back economic growth and injects inflationary pressures.
Well, what do you think of that? Eccles could not have put it better. Perhaps Hayden has not been treading the road to Damascus so much as the road to the real world. But I hope he is not going to Lusaka.
Doug Anthony was interviewed by the Melbourne Age when he retired. Among the many interesting issues raised was Anthony’s interest in administration. The Age says:
Doug Anthony liked handling problems. He loved it, he says. The biggest one he had was trying to sell the wheat industry the wheat quota scheme but he battled on. “Without it, there would have been absolute chaos. We lost one wheat seat — Riverina — because of that but, without it, we would have lost all of them!”
I represented a wheat seat and I supported the wheat quota legislation and have blamed myself ever since. Why should I be so embarrassed when Anthony is so proud?
The scheme was brought in at the end of the 60s to limit the amount grown because we were growing more wheat than we could sell. The State governments, with the help of the Australian Wheatgrowers Federation (AWF) members, told farmers how much wheat they could grow. A quota was based on the performance of the farmer: he got a bigger quota if he was a bigger grower but a battler developing a new block got a small one or none at all.
I was a wheat farmer in a tired kind of way and mine was a traditional wheat-growing electorate and these were the farmers who were getting the biggest quotas. And the AWF was very powerful in my electorate and wanted quotas, though now it seems that Anthony was pushing them from behind or from above or somewhere else.
Why should I still be embarrassed about my support for the scheme?
First, I was worried because it seemed wrong to be limiting the production of food when much of the world was hungry. I know that is no real solution to supply a hungry country with food aid; it is far better to help them grow more food for themselves. Still, it worried me a little.
I was embarrassed secondly because I had not warned wheat growers that almost inevitably, sooner or later, we would produce more wheat than the market wanted if the continued to support a stabilisation system that blanketed the market signals. I know that wisdom comes easily with hindsight and it is easy to see now that the encouragement to grow more and more wheat was inherent in the marketing scheme of those years. I could see this way back in 1964 but lacked the guts and wisdom to shout it aloud from the rooftops. So we drifted into growing more wheat and we were at panic stations by the end of the 60s and that was why Anthony had to take action. But we should not have got into that situation.
My third concern was that quotas presented an irresistible temptation to grow out-of-quota wheat and then sell it on the black market. This happened all over eastern Australia.
My fourth concern was that I knew so many battlers who had obeyed the only market signals they could see and, so, had gone out and developed new land only to be told that they could not grow wheat on it while farmers who had made a lot of money growing wheat were allowed quite big acreages.
I always regard with deep suspicion any government action which gives particular advantages to particular people while denying them to others, even if this is done in the sacred name of orderly marketing. I know that quota holders are very much in favour of the idea but I hate it and for good reasons.
However, there is another part of Anthony’s reported statement that worries me: That is when he speaks of losing Riverina and saving the other wheat seats. When I read that, I realised that I was not cut out to be a politician. I had a pathetic kind of feeling that, surely, other principles should guide us besides grubbing for votes.
There has been some talk lately about a possible marriage between the Liberal and the National parties. It is true that sometimes it is hard to know what really divides us. If Mavis and I have a tiff, after a few days I forget what I am cross about though I am certain I am in the right. I think our two parties are at about that stage — we cannot remember what we are cross about. And, if Anthony’s way of judging the correctness of political action is typical of National Party thinking, the Nationals and the “wets” in the Liberal Party should get on splendidly together.
As I have said many times before, when Ginger was asked whether he preferred the infantry or the cavalry, he thought for a while and then voted for the infantry.
Asked why, he replied, “One day, the retreat will be sounded and then I don’t want to be hindered by no plurry horse!”
Well, the Liberal “wets” and the Nationals wouldn’t be hindered by any silly principles either.
Bert Kelly, “A posse goes after Anthony,”
The Australian, October 7, 1985, p. 7.
I recently read a paper by Doug Anthony titled, “The Hand That Feeds Needs To Be Fed,” which interested Fred and me. Eccles tried to make a weak joke about how hard it must be to feed a hand but I brushed this frivolity aside. What I found particularly interesting was that Anthony’s solution to our farming problems was even more government intervention. The paper began:
The pussy-footing attitude I hear from some farm leaders about not wanting government supports or subsidies is a form of ignorant pride. Such misguided behaviour verges on the edge of betraying those very people they represent.
When Eccles and I read about our ignorant pride we knew we had a fight with Anthony on our hands. As we were limbering up Fred wandered past and wanted to know what all the excitement was about. When we told him he asked if he could come too?
We were surprised to hear this because usually Fred does not take much interest in fights between ex-politicians who have been washed up on the political beach. He thinks we have become so used to fighting when we were in Parliament that we don’t know how to stop when we retire.
However, Anthony’s comment about the ignorant pride of our farm leaders seems to have got under Fred’s skin. Fred asked querulously:
Wasn’t Anthony the leader of the National Party which used to be the Country Party which was led by Mr McEwen who was responsible for our high tariff policies?
And wasn’t he the Deputy Prime Minister in the governments that pushed the tariffs on cars and textiles even higher? Doesn’t he know that the average farmer pays about $9000 extra a year for the cost of tariffs, most of which were imposed while he and his party were in power? So if you chaps are going to have a good stoush with Anthony I would like to come along too.
Funny fellow, Fred.
Eccles thinks that Mr Sinclair, the present leader of the National Party, had made such an exhibition of himself at the recent farmers’ rally in Canberra when he got so thoroughly clobbered by the NFF president, Ian McLachlan, that probably Mr Anthony felt that he should try to draw some of the NFF’s fire away from Sinclair.
“There must be some reason for Doug talking all that nonsense about subsidies,” Eccles said generously.
Eccles then said that it was not generally recognised, even by farmers, that two-priced marketing schemes that held domestic prices higher than export parity, imposed burdens on exporters in exactly the same way as tariffs do. A high home consumption price for eggs, like a tariff on nappies, gets built into the cost of living, then into wages, then into the general cost structure and then back along the production line until they come to the exporter at the end of the line who can pass them no further. Eccles says that perhaps Anthony does not understand this, which did not surprise me: he did not seem to understand about tariff subsidies either.
Eccles then gave us a general warning about farm subsidies. He says that most of the subsidy money ends up in the pockets of the big farmers who need it least when it is supposed to help the small farmers. I have recounted before how my big and competent English farmer friend used to visit me every few years and we used to compare our farming figures. His were always far better than mine because he was a better farmer.
I was always startled at the size of the subsidies he received and I once asked if he was confident that the generosity of the British Treasury would continue. I have never forgotten his answer: “Bert, as long as there are enough poor struggling farmers around me I’ll be all right!” Most of the subsidy money Doug is going to ladle out will end up in the pockets of the big farmers.
However, perhaps Doug realises this and he is only going to subsidise the poor farmers, particularly the poor little farmers. By so doing he would encourage them to stay small because, by growing big, they would miss out on their subsidy money. Is this to be his way of handing out subsidies? Someone once told us to get big or get out, now perhaps it is going to be, “Stay small and get rewarded”. To a modest farmer like I am this seems a queer way of tackling the problem, but then I have never been a deputy prime minister.
Fred says that I must return to this subject next week; he thinks I have been too gentle so far.
Bert Kelly, “Panting in vain for tariff sanity,” The Australian, October 14, 1985, p. 9 — that version of the article has a jumbled and truncated ending, so I instead used the text from the article’s publication in a Victorian rural newspaper where it appeared under the title, “Sorry Doug, subsidies are not the answer,” Stock and Land, October 17, 1985, p. 19.
I once had a very big, slow and unintelligent old sheep dog called Sandy who chased foxes with great enthusiasm and little success.
Usually the fox disappeared down his burrow long before Sandy arrived panting on the scene.
A sensible dog would have then gone home but not Sandy; he just sat down and waited patiently with his ears pricked for the fox to reappear.
Sometimes we had to drag him home the next day. Well, Fred’s behaviour reminds me of Sandy; ever since he read Doug Anthony’s condemnation of the pride and ignorance of our farm leaders he has been following me around asking when I am going to give Anthony another serve. He begged:
And don’t be so gentle this time, Bert. You are going soft in your old age.
Don’t forget about the $9000 tariff burden I am carrying on my bent back and which Doug helped make so big. It is making me saddle sore.
You will remember that Anthony’s solution was to subsidise farmers back into prosperity. Well, we have tried doing that many times in the past and really it does not seem to work very well.
Indeed, I can think of no industry that has been subsidised for any length of time that has not been hurt in the process.
This is because subsidies hide the market signals that tell farmers when to produce more or less of a product.
Subsidies can only be justified if an industry is in trouble, and it is usually in trouble because the demand for that product is falling. The immediate effect of a subsidy is to encourage more of a product to be produced when less is required.
If you want to see an example of how subsidies hurt industries just look at the dairy industry which well-meaning politicians like Anthony have subsidised so generously with its two-priced marketing system, so encouraging the production of more dairy products than the market wanted.
So we hurt the dairy farmers we tried to help. If Doug has any example of an industry being subsidised for more than two years without hurting it, would he please spell it out? Cotton is the only one I know and that was because the Government dropped the cotton subsidy before it had time to do real damage, at the urging of that agro-statesman, Paul Kahl.
Of course, Doug may have up his sleeve some method of preventing subsidies encouraging increased production when the demand is falling.
Perhaps he wants the Government to say who is to grow the subsidised crops, thus preventing increased production. He might want quota schemes in which the Government, advised by farm leaders (who, with their friends, always get quotas), will give some farmers the right to produce the subsidised crop while denying that right to others.
We tried this method once with wheat and a proper mess we made of it. Many grave injustices were done to young battlers who were starting to develop new land and so were not traditional growers and so could not get quotas.
Is this going to be Doug’s way of controlling farming in the future, with the Government firmly in control of what is grown and where?
We have tried this with sugar and it doesn’t seem to have worked too well, keeping the industry sheltered from the cold winds of change.
Doug may claim that all he wants is for farmers to get back their costs of production.
“We give secondary industries tariff subsidies so that they can recover their costs of production,” I can imagine him saying, “Why should not farmers be given the same right?” Why not indeed!
This is truly a field that has been frequently fallowed by Doug in his protectionist past but it presents two problems.
The first is, whose costs of production are to be set as the standard? Fred’s are different to mine and ours are different to everyone else in our district and even more different from people in other districts.
So clearly it is not going to be easy to set a proper figure on an industry’s cost of production.
If we set the figure too high we would encourage too many farmers to get into the act and if we set it too low we would hurt farmers in the high-cost areas.
This kind of government might suit Doug but I always thought that the Country Party that was, and the National Party that is, believed in free enterprise.
We used to be told by the Labor Party that the Country Party believed in socialising losses and capitalising profits. There may be some truth in this jibe.
Bert Kelly, “Spectre of the bad old days has Eccles in a flap,”
The Australian, October 21, 1985, p. 9.
Last week we left Doug Anthony subsidising farmers back to prosperity, with Fred the farmer waiting with his ears pricked for me to give Doug another serve. Doug’s criticism of our farm leaders for their pride and ignorance still rankles with Fred, so I will write this last article on the subject and let him go home.
It seems tragic that just now, when the Labor Government is showing gratifying signs of standing firm against pressures from secondary industry whose past solution to any of their problems was another serve of tariff protection, that Anthony should choose this time to suggest going back to the bad old days when we used to grease every wheel which squeaked.
Even Eccles has been impressed by the way the Minister for Industry, Technology and Commerce, Senator Button, firmly told the Rank organisation that their problems had to be solved by themselves, not by getting more tariff protection.
Eccles has been even more impressed by the way the metal industry employers have stopped asking for more protection whenever the unions bully another wage rise out of them. They now seem to realise that they have to stand on their own feet, not ours. It is sobering to realise that, if Doug has his way, we will end up as an economy that lives by taking in each other’s washing, with the Government standing on point duty directing each load to this laundry or that, with the favoured ones getting the most.
I have often heard the Country Party stigmatised as being agrarian socialists but I thought it had grown out of this when it became the National Party, but it seems that was just wishful thinking.
If the National Party is really reverting to its old ways, there will have to be some smart footwork by some of the new National Party members who appeared in Canberra after the last election. They seem to have very different ideas to Doug Anthony.
I quote from a speech by the new member for Farrer, Mr Fischer, who has recently been promoted to the Opposition’s front bench. On April 18, when replying to a Labor man who had sneered at the old Country Party’s agrarian socialism, he said:
He has not caught up with the new wave of Nationals who entered this Parliament in the class of 1984 and who stand for a far more rational approach in terms not only of macro-economic issues but also in dealing with questions of assistance and questions relating to tariffs and bounties … The business of supporting a subsidy for subsidy’s sake belongs fairly and squarely to the past.
Eccles has been standing at my elbow while I have been writing this, chewing his fingernails and trying to get his oar in. He at last burst out savagely:
I wish you would stop babbling on about politicians, Bert. The most important reason why subsidising farmers back to prosperity would be dangerous has not been mentioned. Surely even you can see that the money to pay the subsidies must come either from taxes or from borrowing, unless of course Anthony intends to print the stuff.
Eccles is right to make me inquire from where the subsidy money will come. Anthony must be well aware of the danger of increasing government spending and its effect on taxation, and he knows too that borrowing the subsidy money would inevitably lead to an increase in interest rates which are now so damaging to farmers. I also know he is too responsible to suggest printing it. Perhaps he has a secret spring of the stuff somewhere.
I recently read a piece by David Trebeck in the magazine Inside Australia which puts the matter better than I can. (You will remember that Trebeck adorned the National Farmers Federation for many years.) He wrote:
The key to improved economic performance lies in containing rising public-sector expenditure. Action on both sides of the political fence still falls well short of state intentions. The anguish over taxation reform, which has dominated policy debate this year, would almost disappear if public sector expenditure could be kept to more manageable levels.
The glimmer of hope in all this is that farmers and manufacturers are more likely in future to act together on public policy to improve competitiveness.
The recent, if belated, recognition by manufacturers that their long-term future depends on a competitive Australian economy, and not on their success in badgering governments for more protection against imports, is a welcome development in the maturing of economic policy debate.
Of course, Anthony may sweep all this aside as coming from one of our proud and ignorant farm leaders. What do you think? Is Anthony just raking over the ashes of our past or are there a few embers of truth there?
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