Bert Kelly, The Bulletin, June 19, 1984, p. 136.

I have taken a morbid and brooding interest in the car industry for many years. Since this column was born, in 1969, I have written 33 articles concentrating on cars and there have been many passing references in other articles. I also made 18 speeches in federal parliament about cars. So, I naturally pricked up my years on May 29 when (Industry and Commerce minister) Senator Button announced the birth of yet another car plan. I hope this will be more successful than the others.

The car industry is a tottering monument to intervention by state and federal governments. I warned in 1966 that the government plan of that time would not work, that the market was too small for five manufacturers and that two would have to go and they would be Leyland and Volkswagen. They did go and were replaced immediately by Nissan and Toyota. Then Chrysler went and was replaced by Mitsubishi. So we still have five manufacturers too small for economic production.

Much of this foolishness is due to the behaviour of government who have been eager to promise the Earth to induce any car company to come to their state. And the more cunning and competent their premiers, the more likely they were to succeed. Sir Thomas Playford was the most cunning of all and that is how we South Australians got landed with Chrysler.

Everyone has known for years that the car industry has to be restructured and our leaders made some stirring speeches when my side of politics was in power. We, too, had our plans but they never came to anything; as soon as a manufacturer began to take necessary unpleasant action, such as closing a plant and dismissing people, the government usually would rush in dripping the milk of human kindness all over the place and put a stop to the process. So nothing got done and the industry continued to drift to its economic doom, with employment falling all the time, the demand for cars falling and profits, too, most of the time and the only thing rising was the price of cars.

The industry is costing us about $1 billion a year to subsidise and many thousands of dollars for every person employed.

So, the next time you hear some wise guy advising a company to seek government guidance, remind him about the mess that well-meaning governments have made of cars.

Now to yet another plan. This is not the time or place to dissect it in detail but there are two comments which I particularly want to make.

The first is that Button says that one important object of his plan is to reduce the number of manufacturers to two or, at the most, three and the number of models made here from 13 to six. This seems sensible but, while agreeing with what the government hopes will happen, I am concerned that it may accept too much responsibility to make it happen. In other words, I fear that the government may end up doing too much back seat driving.

Bitter experience has taught me that governments are not good at driving, as the mess the car industry is in again demonstrates. One reason for this is any government servant with the ability to correctly foretell the supply and demand for particular models of cars for five years ahead would not long be working for the government — he would either be employed by a car company or be sitting in the south of France with his feet in a bucket of champagne.

And, even if the government were to get all its answers right, as soon as a car factory gets in a mess of its own making it will blame everything on the government.

It would be far better if the government were to say that it was going to reduce its protection with slow but certain steps and then leave it to the industry to sort things out for itself.

They say that nothing concentrates the mind like the knowledge that you are going to be hanged in the morning. The car industry would quickly take the necessary restructuring steps if it were certain about what its protection would be and would do it better than the government because the industry’s own money would be at risk in the restructuring.

Second, we should realise that, even if everything works out as well as the government hopes, in 1992 the industry still will be sheltering behind a 57.5 percent tariff. This is high protection indeed.

I do not expect to last long enough to see that protection lowered yet again, as it should be if the car industry is to be really efficient enough to do without the iron lung of protection.

When I started plodding down this painful path, the industry was protected by a tariff of 35 percent. Now, its protection is estimated to be about 95 percent — allowing for quotas.

By 1992, they hope it will be 57.5 percent. What a mess we have made of it!

Still, I must be thankful that another attempt is being made to rescue the industry. I shall be lucky to last till 1992 but at least I have something to look forward to besides my state funeral.