Bert Kelly, “Don’t ask the Govt. to drive industry,”
Stock and Land, May 2, 1985, p. 18.

About once a year Eccles makes me attend a seminar on the car industry so that I never lose sight of the monumental mess that government intervention has made of it.

I suppose he is right. Most industries that governments help never recover, but the car mess is bigger than any of the others, even dairying.

This year’s seminar was arranged by the Centre of Policy Studies of Monash University.

This group is acquiring a formidable reputation for spelling out the economic facts of life (nice and nasty) so he who runs can read.

The Centre speaker was Dr Gary Sampson and the main spokesman for the Australian industry was Ford’s Mr W. Dix.

The quickest way to measure the magnitude of our car mess is to point out that, until 1962, Australians were making more cars than were the Japanese.

Dr Sampson says:

Between the removal of general import quotas at the end of the 1950s and the first motor vehicle plan in 1965, the only assistance for fully-assembled motor vehicles was a tariff of 35 per cent.

The British preferential tariff was then just 25 per cent. There were no domestic content provisions and no quantitative restrictions.

Locally produced vehicles held more than 90 per cent of the local market in 1962-63 and the local content of some Australian vehicles was extremely high. The Holden, for example, is estimated to have had almost 100 per cent local content at the time of the introduction of the plan.

Then the Government started to help the industry!

At about this time Sir Charles McGrath, the head of Repco, was both the treasurer of the Liberal Party and the leader of the group who were collecting funds to build McEwen House for the Country Party in Canberra.

As a result of the Government’s intervention, we now have a car industry that we have to subsidise by tariffs and quotas at a rate of over $1000 million a year, with an annual subsidy of about $13,000 for every person employed in making cars or car components.

And all the while the number of people employed in the industry has been falling. That is not a bad record to stack up against government intervention!

Now I see that the metal workers are pressing the Government to intervene yet again so I suppose it will not be long before we have a repeat performance of what happened in 1981, when GMH got into bed with the unions and claimed that, if the IAC recommendations were accepted by the Government, 250,000 people would be thrown out of work.

As there were then less than 70,000 people then employed making cars and components, this statement was clearly nonsense, or worse.

However, we have come to expect behaviour of this kind ever since the clothing and textile employers and their unions successfully twisted the pathetic Fraser Government’s arm when a tariff reduction loomed for them just before the 1980 election.

It is not fair to blame Senator Button for the industry mess.

He inherited it from a long sad succession of ministers who no doubt meant well, but who ran to water if the unions or their employers huffed at them.

The Government unveiled its first car plans in 1965 and since then it has altered them significantly 24 times, so it is not surprising that the industry is confused.

A recent paper by an industry spokesman was titled “Quo Vadis” and subtitled, “I don’t know where I’m going but I know where I’ve been.”

Yet foolish people ask for government guidance.

The biggest industry problem is that foolish governments have encouraged five manufacturers to set up here where there is room for only two at the most.

The second problem is that the unions usually clobber the industry to its knees if ever it starts to get groggily to its feet.

The third is this awful tendency of the Government to alter its plans all the time.

We now have a mish-mash of plans that the industry itself admits that only a few of its experts can understand.

I have taken a mournful interest in the plans since 1966 and I say sourly that I cannot understand them and I am prepared to bet that no one in Parliament can either, even perhaps the Minister.

Eccles, being a nasty-minded man, thinks that the complexity of the plans is a deliberate plot by the bureaucrats to make sure that they are never out of a job.

At the seminar they distributed a paper trying to describe the plans. It ends with this pathetic statement:

If the Government’s objectives for the industry are not being achieved, the Authority can act through moral persuasion!

I have offered them the services of Eccles who, with his newly-found Ecclesiastical morality, will be perfectly fitted to the task. And probably they will issue him with a surplice. He would love that.