1. The $2,000 song of the shirt worker, 24/9/71
2. How best to aid the have-nots, 13/10/72

1.
A Modest Member of Parliament [Bert Kelly], “The $2,000 song of the shirt worker,” The Australian Financial Review, September 24, 1971, p. 3.

Eccles’ particular misery of the moment revolves around two recent Tariff Board reports, one on woven shirts and the other on knitted outer garments. He made me read both and I was pleasantly surprised to find that I could understand quite a lot of what they contained.

I was delighted to find that the cost of the tariff protection that the industry enjoyed had been measured. Eccles calls this cost “the subsidy equivalent.”

Until now he has always done great masses of figures in estimating this cost, but I never quite trust Eccles when he talks about tariffs. So I was delighted to see that the Tariff Board has done the homework themselves and has spelt it out for me to understand.

And the figures are interesting.

Putting both reports together, you get a total subsidy of $45 million.

Now all my city colleagues are always moaning because they say primary industry is always getting what they call “generous hand-outs.”

Last year there was $30 million set aside in a queer kind of scheme to subsidise wool growers. This year there is another scheme for wool with a nicer name and $60 million is allowed for it in this Budget.

When me city colleagues see the magnitude of their generosity to farmers, they are very patronising and critical.

But here we have a comparatively small industry getting subsidised at the rate of $45 million a year and no one worries about it at all and it has been going on for years and years. Funny business!

The justification for this high rate of subsidy is that it creates employment. Well, I have often questioned the logic of pushing ahead with our expensive immigration scheme because we want more people to do our work — and in the next paragraph, claiming that we must subsidise industry to employ them.

But if we are justifying the big subsidy on this ground, at least we know now the cost of the employment so gained. There are about 22,500 people employed in the industry and the subsidy comes to $45 million. Divide one into the other and you get an annual subsidy of $2,000 for each person employed.

The Budget estimate for this year’s subsidy for wool is $60 million and this is divided between 100,000 woolgrowers, or $600 each.

I dread to think what Fred will say when he finds that we have been dobbing in so generously for years for those who make shirts while being so mean to those who make wool.

When I read the Tariff Board reports I couldn’t understand why Eccles should be sad when the reports were so good. But I find now that the Government did not implement the Board’s reports, and this is what made him miserable.

It made nice noises expressing agreement with the principles in the reports and then immediately re-applied the generous protection the industry had been receiving before the reports were presented.

It is true that the Government said that it hoped to do something about implementing the board’s report in the future.

But that’s the trouble about tariffs — there is never any difficulty in finding people who will make powerful speeches about how grievous the tariff burden is to export industries.

Indeed, all but a few old diehards now recognise that our tariff policy of recent years has been unwise and a hindrance to our economic development.

So it is not recognition of the wisdom of reducing tariffs that we lack. What we lack is action in actually reducing them.

I have tried to explain all this to old Fred. I pointed out that I had lately made some splendid speeches expressing my concern about the weight of the burden that tariffs place on exporters. I even offered to send him some autographed copies of what I said on the subject.

But this evidently wasn’t what he wanted.

“Now listen, my man,” he snarled, “next year is election year and I think you ought to know that I, and a lot of my fellow farmers, are sick and tired of hearing fine flowing phrases about what you think you know about tariffs.

“Eccles probably told you all of it, anyway. What we want is less eloquence and more action. What we are really looking for is some real reduction in tariffs!”

That’s the trouble with Fred. He’s not a chap with a lot of vision and imagination.

What he has is a big overdraft and a sour and cynical outlook on politicians in general and on me in particular.

And next year is election year. Cripes!

***
2.
A Modest Member of Parliament [Bert Kelly], “How best to aid the have-nots,” The Australian Financial Review, October 13, 1972, p. 3.

In my electorate, and I understand all through Australia, there has been a ferment of interest in overseas aid.

The organisation leading the campaign is called Action for World Development.

One of the groups in my area asked me to talk to them. I agreed, thinking that I would be able to blind them with science and skate smoothly around the thin ice.

But this didn’t work out that way at all. Many of them knew more about the subject than I and, what was worse, they soon made this obvious. They had done their homework.

I came prepared with all the right answers — how we gave away 0.52 per cent of our GNP and how we were high in the honour roll of aid giving and so on.

Then I gave them a burst about how our aid did not have strings tied to it as did the aid from some other less worthy countries. I thought that this would placate them.

But it didn’t really. They admitted that we, and the rest of the world, are doing something, but not enough.

They said that the cap between the standard of living of the poor and the rich countries continues to widen and into this gap civilisation as we knew it will disappear one day unless we could do something to close it.

I thought that this was pretty loose talk — it sounded like an MP speaking. I told them so, in a roundabout, polite way.

But there was a big bloke with whiskers at the back of the hall who pointed out that all the lessons of history pointed to the inevitability of affluence being destroyed by poverty in the end.

“You ought to read Gibbon’s Decline and Fall of the Roman Empire,” he said mournfully. “Cripes, not that again,” I thought!

But I admit all the lessons of the past, and our knowledge of what is happening to us now, point to the inevitability of our fate if we cannot close the gap.

So it is not only Christian charity or our uneasy consciences that should activate us in this matter. It is, even more, enlightened self-interest.

But though it is not hard to demonstrate the reason for doing something, it is far harder to know what we ought to do.

All countries have learnt from bitter experience that giving aid is almost always disappointing in its results in spite of the best endeavours of governments and people.

Almost everyone now accepts that trading with poor countries is the best way to help them.

In 1966 I was in Bombay, and one morning inspected a skim milk factory where they were mixing Australian skim milk powder with buffalo milk, using machinery which had been given to them under the Colombo Plan.

I asked the management if they had any problems.

“Only one,” they said, “and that is to get the foreign exchange to enable us to buy your skim milk powder.”

In the afternoon I inspected a cotton textile factory. I asked them if they had any problems.

“Only one,” they replied, “and that is we can’t get our sheets into Australia over your 55 per cent tariff wall.”

So we wouldn’t buy their sheets which they were good at making, so they couldn’t buy our skim milk powder which we were desperately keen to sell. It doesn’t seem a very sensible way to behave.

And then this brings me back again to shirts.

A year ago I told how the Australian shirt industry was costing us about $45 million a year in consumer subsidy which worked out at about $2000 subsidy for every person employed.

I pointed out that the countries from which we could buy these shirts bought from us far more than we bought from them.

If we really wanted to help these countries we could buy their shirts. This would be far more effective than making speeches or giving aid.

Strangely enough, it would help us too. We would be able to save $45 million a year when buying shirts. With this money we could do all kinds of useful things.

And if we were worried about the people who lose their jobs because we stopped making shirts, think of all the employment that would be created by spending $45 million a year wisely, say, on schools or hospitals or something!

So if these dedicated and competent activists in Action for World Development want to get something useful done about closing the gap between the rich and the poor countries, I suggest they ask their members of Parliament when the government is going to reduce the tariff on shirts.

This would be a useful start!