A Modest Member of Parliament [Bert Kelly],
The Australian Financial Review, February 7, 1975, p. 3.

Between the lot of us we have made a proper mess of the car industry.

I mustn’t blame it all on the present Government because the trouble started way back in the early 1960s when the Government of that day encouraged, by too lavish and too careless protection, the proliferation of too many car and component manufacturers.

We used to have five car manufacturers but VW and Leyland have had to bow out of manufacturing here, but the three that are left are still too many to get economic production.

We would have more people engaged in the car industry and cheaper cars if we only had one manufacturer, with the lower duty imports to keep that company honest. With one producer we would get economies of scale: we won’t with three.

And the unions that are now criticising the multinational companies for the heartless cruelty in sacking their long-serving, faithful servants should have a large share of the blame.

It isn’t long since the employees of Chrysler were trying to force Chryslers to continually change models in order to create employment in the design and tool sections when one of the fundamental problems of the whole industry has been the unnecessary and extravagant number of model changes.

The average turnover of employees in the industry has been particularly heavy. In 1973 30 per cent of production and 43 per cent of component employees had less than a year’s service.

The unions, and indeed the Minister for Labour, have been very critical of the soullessness of the production line they are now so angry to see slowing down.

Its poor performance has been affected by the strikes and bans. Remember the absolute anarchy at Fords and the continual round of strikes and bans imposed on GM-H, if not by union leaders, by irresponsible union shop stewards.

The unions have pretty well killed the goose that laid the eggs.

In 1973 it was impossible to get enough Australian cars. They weren’t being made quickly enough to meet the demand. How could they be when production was gummed up so seriously?

This strengthened the demand for imported cars. People weren’t prepared to wait many months for Australian cars, so they bough Japanese cars instead. And they liked them, liked the fittings, liked the extras and chiefly, they liked their size.

Then came the oil scare and we all began to question why we needed six cylinder cars when four cylinders would get us there as fast as it was safe to go and would use less fuel.

The Australian manufacturers had been brought up in the conventional wisdom that Australians liked six cylinder cars and were far too slow to see the writing on the wall.

Then the Government hasn’t been helpful either. They have been dancing around like a cat on hot bricks, first appreciating the currency which encouraged imports, then cutting tariffs by 25 per cent which encouraged imports yet again, then depreciating the currency to discourage imports and in November increasing the tariff on cars to 45 per cent discouraging imports even more.

Not it has changed its methods yet again and has imposed import restrictions on car imports in addition to the 45 per cent tariff.

So the Japanese buy our iron ore and coal, ship it to Japan, make it up into cars, pay wages very close to Australia’s, ship the cars back to Australia, hump them over a 45 per cent tariff wall and still undersell us. So we have to impose import quotas. We can’t really be good at making cars!

And while this is going on, Mr Whitlam is trotting around the world, lecturing the Japanese and the Europeans and anyone else who will listen, about how wicked they are to impose barriers against the imports of our beef.

I am told that his eloquence and anger on this subject were terrible to behold, yet we are doing just what he has been complaining about by imposing quotas.

The environmentalists have been telling us we have too many cars on the road and now the Government has reduced the tax to encourage us to have more cars.

And the economists are grizzling because we are printing too much money and now we have reduced the sales tax on cars, so to make up for the revenue foregone, we will have either to raise more taxes or print more money.

There are two reasons why the Japanese beat us at making cars. One is that they do not bleed their companies white by taxation. And they’ve got a fire in their guts while we’ve got wind.