More featuring Bert Kelly» , Peter Farrell»

Here are six Bert Kelly columns, followed by three Peter Farrell letters to the editor, on a tiny sampling of exasperating delays in reducing tariffs:
1. We’ve a duty to knock down the tariff wall (June 2, 1972)
2. The tariff ‘shuttle’ is self-defeating (June 9, 1972)
3. Tariff cuts are OK so long as they don’t happen (December 1, 1978)
4. The tide has caught up with Eccles — or has it? (March 23, 1979) “It is not enough for people to advocate lowering the tariff wall in theory, but what Fred and I want to see is someone starting to remove some bloody bricks.”
5. Tariff cuts are all right if they don’t really happen (March 30, 1979)
6. Should we take Japan as a model for control? (April 6, 1979)
7. Peter Farrell, Overt hypocrisy towards protection (August 21, 1980)
8. Peter Farrell, Time for reduced tariffs (August 17, 1981) “Continued procrastination on this matter, through the request of a further study, … would only serve to corroborate 16 years of unambiguous documentation on the need for tariff reductions.”
9. Peter Farrell, ‘Economic charade’ of tariff review (February 4, 1982) “Once again we see exposed the Government’s complete lack of political fortitude on issues of real economic import … We have been close before but I now feel we have finally arrived at cloud cuckoo-land economics in this country.”

[[Also, here are links to 13 other Bert Kelly columns on textiles tariffs: (a.) The emperor has no textiles, clothing and footwear sense (3 items, August-September 1977); (b.) Tariffs are hilariously counterproductive (1 item, August 1977); (c.) Bert Kelly on the Political Process (1 item, June 1978); (d.) Should it be compulsory to buy footwear and clothing? (1 item, October 1979); (e.) Bert Kelly shows how to attack (4 items, January-February 1980); and (f.) Chicken-hearted feathered friends strange bedfellows on a feather bed? (3 items, November 1986).]]

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1.
A Modest Member of Parliament [Bert Kelly], “We’ve a duty to knock down the tariff wall,” The Australian Financial Review, June 2, 1972, p. 3.

Although the tariff bandwagon now carries many trumpet blowers and although it is now generally admitted that our past policy of protecting everything that moved was wrong, yet the tariff wall does not come tumbling down as some people hoped.

Fred, in particular, is not pleased with me.

“Yes, I know you’ve made some quite nice speeches,” he growled, “but my fellow-farmers and I are still bearing the $2,000 million burden that Eccles tells me about. What about a bit more action and a bit less eloquence?”

I can see what he means. It is not hard for Eccles to demonstrate that we have made many mistakes in our past protective policies.

Even I can see that now. But setting things right is not as easy as you may think.

If a factory is closed because of lowered tariffs and if some direct unemployment results, it is easy for the local MP to make poignant and powerful speeches on the subject.

But it is not easy to demonstrate that there may be an increase in employment in other factories because of the tariff reduction.

Eccles often uses the illustration of the plastics industry. There are about 10 times as many people employed in making plastic products than in making plastic powders.

But the employment prospects in the plastic products industry are very severely limited because of the high cost of the raw material, plastic powder, which is heavily protected and so made excessively dear.

It is not easy to demonstrate this kind of reaction. Economists can tell us that it will happen, but we may not be able to see it happening as we can see a factory with closed doors.

The difficulty is compounded by the attitude of TV stations.

Most commentators wouldn’t know what a tariff was, but they would eagerly grasp the opportunity to show a closed factory gate with disconsolate workmen outside.

This would perhaps be followed by a TV interview, with a glycerine tear or two squeezed out, and children without boots.

What hope would Eccles have of talking economic sense about the employment gained in other industries? You can’t show pictures of employment yet to be gained, as you can of people out of work.

So while our sentimental addiction to irresponsible and ignorant TV programs persists, we will have grave difficulties in lowering tariffs, even though the economy in general, and employment in particular, would greatly benefit thereby.

It is all very well for Eccles in his ivory tower to sling off at me because I cannot quickly lower at least the higher tariff barriers.

Most of us know, in theory, that we should, but in practice it isn’t as easy as Eccles thinks.

It would help if the practice of a gradual reduction of tariff duties was more commonly followed. The Tariff Board has made some such recommendations, eg for malleable cast iron fittings and shirts.

This gives industry time to readjust, time to plan other uses for its investment. And it gives the men a chance to look for other employment that may be offered in other factories.

And there are some industries that have been directly or indirectly encouraged to start up by the State and Federal Governments.

Some State Governments have been particular sods in this respect, quite cheerfully lumbering the Australian economy with the burden of carrying uneconomic industry, as long as they got the kudos for opening a new factory.

If such an industry can demonstrate a good case, it might be better to ease it out of the economy now, rather than have to carry it on our backs for ever.

We could start with the artificial fibre industry which looks as if it will be an everlasting burden to the textile industry in particular and to the economy in general.

I guess we will never repeat the silly mistakes of the past, and encourage new industries with unduly lavish protection.

A more gradual approach to lowering tariffs may not satisfy Eccles in his ivory tower, or Fred on the farm.

But it might well turn out to be faster in the end than by rushing around knocking big holes in the tariff wall, and creating a lot of dust and noise and resistance.

But get the duties down in the end we must.

***
2.
A Modest Member of Parliament [Bert Kelly], “The tariff ‘shuttle’ is self-defeating,” The Australian Financial Review, June 9, 1972, p. 3. Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 90-91, as “Textiles (1).”

Eccles is always nagging me about the “shuttle service.”

All too frequently, when the Government accepts a Tariff Board recommendation for a reduction in duty, industry gets a hearing before what is called the Special Advisory Authority (SAA) who almost always puts a higher temporary duty back on again.

When this happens, the law requires that the matter be referred back to the Tariff Board again.

A full Tariff Board hearing takes about a year, so the temporary duty stays on until the board’s report is acted on by the Government.

If it then reduces the duty, the process may start again. Eccles calls it the “shuttle service” and he hates it.

Eccles says that the worst example of the shuttle service in operation is to be seen in the generous treatment given to the synthetic fibre industry.

This industry received its first temporary protection in 1963.

Between then and now, temporary protection has been in force for 333 weeks and permanent protection for 134 weeks.

And now the matter must go back to the Tariff Board yet again, so it will be a year at least before duties are reduced again.

So the industry will have had temporary protection for 385 weeks and 134 weeks of permanent protection. I wonder what “temporary” really means!

The process of hearing cases before the SSA is evidently very informal, with manufacturers being heard in one session and importers in another, with all the hearings in private.

Eccles says I should ask if I can go, either as a member of the press or of Parliament, so that I could understand the basis on which these generous hand-outs are made.

Generous indeed they are, at least for the industry that gets them.

For an industry further along the production line, the protection may very well be devastating as its raw material costs may be increased by the increased duties.

What does the synthetic fibre industry stand to gain by this “temporary” handout?

It tells me it will be $1.2 million. I have seen other estimates of $10 million. Eccles and I have worked it out at $2 million.

But whatever figure you use, it must be pleasant to get it handed out in this nice informal and friendly way, without any public exposure of the cost to the economy in general or the user industries in particular.

This would be serious enough if it were really on temporary.

But the figures show that the industry has received, or will receive, “temporary” protection for 74 per cent of the time since its first helping in June, 1963.

The money value that this section of the industry receives from permanent protection (20 per cent) works out at about $5 million.

If you take my figure of $2 million for the temporary duty you get an annual subsidy of about $7 million.

Eccles is always moaning about the size of the consumer subsidy which secondary industry receives through the tariff. He says it is about $2,000 million a year. I can see now how it is made up.

But let us continue the sorry saga. The users of the yarn pay the subsidy in the first place.

Within two days of the increased duties they were already warning the world that they, in their turn, would need extra protection.

And this is not surprising. Overseas garment manufacturers can buy their yarn for 55c a lb; the same yarn will cost an Australian 90c lb.

So the effects will spread down through the production line, through the textile trade with devastating results, and eventually the burden will have to be shouldered by Fred and his fellow exporters, as always.

Why is the industry such a burden to the economy? It claims it is an efficient producer.

It may well be, but Eccles says it makes too many qualities of yarn and there is not enough demand for even the most popular qualities to give the economies of scale that bigger overseas plants obtain.

This last excuse would be more acceptable if it were not for the fact that another producer is just about to start up.

So there will be even less throughput, even less economies of scale so more expensive support will be needed from the economy in general and the exporter in particular. Poor Fred!

The text for next week’s sermon will be, “You have to come from overseas and be really big to get really big helpings.” Eccles says we will deal with propylene as well as synthetic fibre yarn.

***
3.
A Modest Farmer [Bert Kelly], “Tariff cuts are OK so long as they don’t happen,” The Australian Financial Review, December 1, 1978, p. 3. Reprinted in Economics Made Easy (Adelaide: Brolga Books, 1982), pp. 110-12, as “Engines.”

When Eccles pushed me unwillingly into the tariff battle many years ago, most people, including my parliamentary colleagues, thought that I had some kind of disease.

They used to go around muttering darkly that I “was a little Australian who did not believe in the development of this great country of ours” and that kind of abuse.

Now, however, most people, or most thinking people, know that the old policy of protecting everything that moves imposes impossible burdens on other parts of the economy, so tariffs must come down in the long run.

The Vernon Committee said this first, then the Jackson Committee and finally the White Paper on manufacturing industry agreed.

So nearly all thinking people now agree with Eccles’ general thesis that we would be better off with a lower tariff structure.

There are a few economic troglodytes who cling pathetically to the shibboleths of the past, but you usually find that they adopt that attitude because they hope to gain something for their particular group at the expense of the rest of us.

But fortunately there are not many of these people left now. It becomes increasingly difficult to proclaim these primitive areas as the higher level of education exposes their pitiful logic.

But there is considerable difference between admitting that tariffs must eventually come down and actually lowering them.

David Trebeck, of the Australian Woolgrowers and Graziers’ Council, summed up the situation when he said, somewhat sourly when the Jackson Committee report was published, that everyone seemed in favour of tariff reductions as long as they did not actually happen.

I had this feeling of frustration when Eccles told me that the Government was considering delaying the reduction in the high level of protection for small industrial engines of the kind that farmers use, and which make engines very dear, indeed.

The ancient mariner had an albatross hung around his neck until it went rotten, but the Australian farmer has had a stationary engine instead of an albatross hung around his neck for so long that it stinks.

In May last year the Industries Assistance Commission (IAC) recommended that the then high level of duty be gradually reduced over the years.

The rate was to come down from 49 per cent to 45 per cent in November, 1978, to 40 per cent in 1979 and 35 per cent in 1980.

But now, acting on the principle that tariff reductions are a good thing as long as they do not actually happen, the Government has referred these engines to the IAC again.

The high duties on engines clobber farmers, but no one worries much about us. It also clobbers the companies who use these dear engines in equipment they make.

For instance, Howard Rotovator Ltd make and used to export their well known rotary cultivators, but now they find that the high prices they have to pay for their engines and other components are making their rotovators too dear.

The following is a list of the Customs duties imposed on their inputs:
Fasteners 30 per cent
Engines 49 per cent
Bearings 28 per cent
Transmission parts 22.5 per cent
Springs 44 per cent
Chain 26 per cent

The components having been made so dear by these rates of duty, the company says it will have to cease production of some of its lines and expects the demand for others to continue to shrink. It knows, all too well, that the demand for this kind of machinery is very elastic, and quickly falls if prices of machinery rise.

I now quote from sworn evidence given by Howards at the IAC inquiry: “It is not unnatural that the farming community should direct their criticism of protection of manufacturing industry at the Australian farm machinery manufacturer, who is easily identified with their own experience.

“In reality, the problem lies one step further back in the input-output chain.

“It is the high protection of many of our inputs which increases our input costs and which is ultimately reflected in the higher prices for our products and higher costs to farmers.”

As I said at the beginning, most thinking people know that tariffs must come down in the long term. Even our high protectionist Government now agrees. But it seems determined to see that these reductions do not actually happen.

***
4.
A Modest Farmer [Bert Kelly], “The tide has caught up with Eccles — or has it?,” The Australian Financial Review, March 23, 1979, p. 3.

The study group on structural adjustment, under the chairmanship of Sir John Crawford, was formed on September 6, 1977, and its report came out on March 6 this year — a gestation period of 18 months.

The preparation of reports of this kind resembles the mating of elephants: there is a lot of trumpeting and activity conducted at a very high level, then a long wait while the pregnancy proceeds and the progeny eventually appears.

One of the effects of doing things this way is that there are aroused too many rosy expectations about the superior qualities of the child before it arrives.

The committee recognised this danger, and I quote from the report: “The study group has become concerned that expectations about its report have been raised too high in many quarters. Members of the study group have detected an assumption that ready and easy solutions to some of the country’s major economic problems emerge from this report.”

It is proper that this warning should be sounded. People in general, and governments in particular, seem to have pathetic expectations that if a committee is appointed the problem is pretty well disposed of and they have only to wait around for the answer.

This easy optimism is not usually justified. People do not automatically become wiser just because they have been put on a committee.

I was on a committee once, and I was very disappointed to find that I did not wake up next morning a wiser man. And we should remember the cynical comment that a camel is a horse designed by a committee.

When the Crawford committee report came out, Eccles grabbed it greedily.

He has been haunting the corridors of power for years, spelling out his message that we would all be better off if tariffs were lower. No one took much notice of him until 1965 when the Vernon committee report was published.

Then his arguments became respectable and from that time onwards he has been kicking with the wind. The Vernon report backed him up manfully, then the Jackson committee report said that, although secondary industry was suffering from a serious malaise, the cure was not to increase tariffs, but rather they should be lowered.

Then the Government white paper said the same thing. And now the Crawford report preaches the same message.

I warned Eccles not to take too much comfort from these reports.

“The important thing is to get tariffs down,” I keep telling him. He tries to listen to me, but I know he finds it hard not to treasure quotations such as these:

“Generally, resort to greater protection will not provide more than short-term assistance. In the current recession, employment losses have tended to be most severe in some of the more highly protected industries.”

Or, a little later — “Australia can attempt to continue to preserve past patterns and attitudes. Manufacturing can ignore export opportunities and continue to be largely inward-looking.

“In that event Australia is likely to continue to slip down the table of world living standards. In these circumstances, unemployment at quite high levels might be a long-term problem.”

I can understand how Eccles tends to cling to statements such as these. For years he has been kicked around by the best people in the land for being “a little Australian who does not believe in the development of this great country of ours,” and has had to suffer similar low levels of abuse.

Now the conventional wisdom is gathering on his side, and it is only the economic troglodytes who still propound the old outdated philosophy that the road to economic salvation lies in protecting everything that moves.

The really primitive groups such as the Australian Confederation of Apparel Manufacturers can sometimes still be heard muttering in the background, although even they seem to have gone back into the woodwork.

So Fred and I can understand Eccles gratification about the Crawford committee’s statement that tariffs should be lowered in the long term. That may satisfy Eccles, but not us.

We remember David Trebeck’s poignant comment when the Jackson report was published, namely, that everyone seems in favour of tariff reductions so long as they do not actually happen.

It is not enough for people to advocate lowering the tariff wall in theory, but what Fred and I want to see is someone starting to remove some bloody bricks.

***
5.
A Modest Farmer [Bert Kelly], “Tariff cuts are all right if they don’t really happen,” The Australian Financial Review, March 30, 1979, p. 3.

Last week Eccles praised the Crawford Report because its general drift agreed with his message, that we would all be better off if tariffs were gradually reduced.

Fred and I, on the other hand, are indifferent to the condition of Eccles’ halo. We are chiefly concerned that someone sometime starts actually removing a few bricks from the tariff wall.

We are only too well aware that the present tariff is harming farmers in particular as well as the economy in general.

The Crawford report admits this but seems torn between the desire to see reductions take place so that our industries can better meet their export opportunities and so cease to be a burden on the rest of us, or making changes that will create social problems.

The situation was summed up perfectly by the leader writer in The Age on March 8:

“The Crawford study group recognises the need to rationalise Australia’s industry structure in line with international realities. But it argues that the painful process of winding down protection for high-cost industries which undermine the competitiveness of export industries and other import-competing industries, should be postponed until unemployment is reduced to the new ‘full employment’ rate of 4 to 5 per cent of the workforce.

“The approach might be likened to a person with a debilitating illness postponing a painful operation until he feels healthy.”

But if we are not courageous, the tariff reductions that almost everyone now sees as essential if the economy is to forge ahead, may never actually happen because the perfect time for them might never come round.

It is a bit like increases in parliamentary salaries, they are often seen as desirable but never just now.

The Crawford committee does not clarify its position when it says “the study group believes that any reductions of a general character should be made over time and become effective only when unemployment is easing and when positive industrial development incentives are in place and are working.

“In the view of the study group it would be inappropriate to implement any general program of tariff reductions while unemployment remained above say, 5 per cent.”

Some commentators have assumed that this means that, if the IAC recommended a reduction in duties for a particular product, then the Government should not accept this advice until unemployment had dropped.

However, heard Sir John Crawford say at press conferences that the study group meant that there should not be an across-the-board tariff cut, such as the 25 per cent cut in 1973, while unemployment is at its present level.

If the Government accepts this interpretation, then tariffs can creep steadily down so the damage at present being done to the industries being clobbered by the tariff, will gradually shrink.

But I fear it may adopt the alternate interpretation and so not do anything until the perfect time for tariff reductions has arrived and then it would probably do too little too late.

There is too much fuss made about the social upheaval that is likely to follow tariff reductions.

It is true that some people would have to change jobs but then people are always changing jobs.

For instance, at the end of 1975, 25 per cent of employees had been in their present jobs for less than a year.

And no one seems in the least concerned about the damage done to industry by workers who suddenly and capriciously do not turn up for work or go on flagrant sicking which conveniently mesh with country race meetings, etc.

Yet we are expected to delay making necessary changes to our economic structure till everyone can change over effortlessly to some other occupations which a large number of people will almost certainly leave during the first year anyway.

Unless the Government shows more courage and wisdom than it usually does in reducing tariffs, David Trebeck will be right when he warns that everyone agrees that tariff reductions are desirable as long as they do not actually happen.

* * *
Now for a personal aside. My five-year-old grand-daughter was helping me get Mavis her breakfast in bed one morning and she was sternly telling me how to do it properly.

When she carried the tray in to Mavis, I heard he say: “I’m licking him into shape for you, nana,”

What kind of life will her husband have?

***
6.
A Modest Farmer [Bert Kelly], “Should we take Japan as a model for control?,” The Australian Financial Review, April 6, 1979, p. 3.

In my first essay on the Crawford report I said how much Eccles appreciated the committee’s endorsement of his frequently expressed opinion that we would all be better off if tariffs were gradually reduced.

Last week I expressed the concern of both Fred and I that, though the recognition was very nice, we were anxious to see some action in this matter and would not be content with more motherhood statements.

This week I want to write about the too ready acceptance by the committee of the place that government intervention is expected to play in industry restructuring.

When you look at the membership of the committee, it is not surprising to find a bias towards government intervention.

One of the committee members was Bob Hawke and intervention fits perfectly with his political philosophy because the Labor Party has always had government intervention as a prominent plank in its platform.

Mr Hawke expanded on this aspect of the report later at a Press Club luncheon in Canberra.

I understand that he claimed that he would adopt an even more interventionist attitude and suggested that we should follow Japan’s example and control business decisions quite ruthlessly.

I have never been to Japan but I have been told that the Japanese Government and big business do indeed run their economy quite effectively and strictly.

But they also control their labour unions with an iron hand, though the hand may well be a velvet glove.

We too could make government intervention work if the unions would do what they were told and also were not dedicated to changing the system so as to bring about the socialisation of the means of production.

Mr Hawke then may well be right when he suggests that we should take the Japanese as our model and have the Government intervene massively in the economy.

But if this is to be successful, the control of management and men must be really tough, even ruthless.

How would this be accepted in Australia?

And while the unions openly advocate socialism, we cannot hope to get the working partnership between management, men and the government that makes the Japanese economy so efficient.

I wish we could.

Another member of the Crawford committee who could be expected to be in favour of government intervention is Sir Brian Inglis.

Some people may think that Sir Brian, who is head of the Ford Motor Company in Australia, would carry the banner for free enterprise on the committee.

And I guess, if you cornered him after a Chamber of Commerce meeting he would indeed give you that impression.

But the plain fact is that the Ford Motor Company depends on tariff and quota handouts from the Government.

It is hard to estimate accurately the subsidy equivalent of the protection given to Ford but it must be in the range of $100 million a year, paid in the main by exporters.

So it would be surprising indeed not to find Sir Brian dedicated to the cause of government intervention, unless of course, knights are above temptation.

No economy which depends on the Government for tariffs or other handouts can properly preen itself in its belief in free enterprise.

Earlier this year I said that CEDA — that very prestigious group which proudly proclaims its belief in free enterprise — contained too many dependents on government bounty to be able to hold the free enterprise banner high enough for it to be seen above the dust of battle.

I admit that, being of a nervous Nellie nature, I was afraid that I would get clobbered by the good and great.

But instead I got congratulations.

My classical education is scanty, but I understand that, when Horatius defended his bridge to Rome, with his two gallant friends on either hand, they fought so fiercely their enemies from Tuscany were moved to admiration. Following the CEDA criticism, I got this little note of thanks, ending with:

“Even the ranks of Tuscany
Could scarce forbear to cheer.”

Then followed the writer’s signature with “CEDA trustee” in brackets.

The time is approaching when all of us, even knights, will have to demonstrate our belief in free enterprise.

We can’t run with the hares and hunts with the hounds forever.

***
7.
Peter Farrell, “Overt hypocrisy towards protection,” The Australian Financial Review, August 21, 1980, p. 11, as a letter to the editor.

SIR, In an editorial three years ago (FR, August 8, 1977) you berated the Government for ignoring the Industries Assistance Commission’s draft report recommendations on textile, clothing and footwear (TCF) industries, allowing them to receive levels of protection two to four times those of manufacturing as a whole.

Nothing substantial regarding TCF protection levels has changed in this time.

However, during this three-year period various Cabinet ministers, primarily Messrs Anthony, Lynch and Garland, have talked about the necessity for free trade, often criticising, among others, the EEC for their unduly high levels of protection. In fact, Mr Anthony has threatened to hold up TAA’s purchase of the Airbus 300B to get a better deal for our primary industry.

Furthermore, the Prime Minister has, on numerous occasions, talked about how unfortunate it is that underdeveloped countries have to battle against the unfair trade barriers erected by the developed nations.

There is overt hypocrisy within this Government on the issue of protection.

In your editorial on August 18, 1980, you indicated that, although the uneconomic TCF industries receive the benefits of grossly wasteful quota and tariff protection, you did not feel it would be continued for the proposed seven years. However, TCF protection levels should have almost reached zero by now, after nearly five years of the Fraser Government’s stated commitment to free trade.

Consequently, I think you are probably wrong in your suggestion that after the election things will be cleaned up.

In fact, the decision to maintain TCF levels is more depressing than it initially appears. Various government inquiries, such as the Jackson committee and, more recently, the Myer’s committee, as well as the IAC, have been recommending for years that the Government put words into action on this issue.

There has to be restructuring of our manufacturing industry if we are to survive as a so-called developed nation in a technologically based world. It is not just wrong but completely absurd to expect that successful, efficient export and import-competing industries should have to shore up uneconomic and inefficient industries as exemplified by the TCF.

If the Government cannot bring itself to act in a responsible way in an area as obvious as this one then the really hard economic decisions regarding our manufacturing industry will never even be addressed, let alone made.

In summary, the Government has once again made itself look farcical. And if it is looking around in the near future for the right people, either to fill important bureaucratic posts or assist in Government inquiries relating to technology, trade, the economy or related areas, then they will find few takers of real merit.

It is really disconcerting to live in a country which has such a wealth of natural resources and is so lacking in guts, competitive drive and dynamism.

One can only wonder what the Swedes or the Dutch could do if they had, in addition to their drive, our resource advantages.

All I can say is that the lucky country is going to need all the luck it can muster after non-renewable resources are sufficiently squandered without any real investment in the future.

Dr PETER C. FARRELL,
Director,
Centre for Biomedical Engineering,
University of NSW.

***
8.
Peter Farrell, “Time for reduced tariffs,” The Sydney Morning Herald, August 17, 1981, p. 6, as a letter to the editor.

SIR, The former Minister for Industrial Relations, Mr Peacock, has now publicly joined the long list of people calling for reductions in tariffs and subsidies to Australian manufacturers (Herald, August 3).

The collapse of wage indexation is a further reason for the Federal Government to act. Now that the country has no credible wages policy, one way of releasing inflationary pressure, due to a predicted wages explosion, is implementation of tariff reductions.

Even Mr Fraser is theoretically a proponent of reduced protection, if one is to take seriously his recent remarks abroad regarding the need for industrialised nations to provide better access by Third World nations to our markets.

During the Government’s five-year plus tenure, the most heavily protected and most inefficient manufacturing sectors of our economy have had their protection levels further increased rather than decreased. The figures are illuminating (Herald, July 23). In comparing the 1974-75 period with 1980-81, Government protection for transport equipment has risen by 24 per cent, textiles by 56 per cent and protection for clothing and footwear has been increased by an astounding 74 per cent. This is hardly an impressive achievement for a Government that is supposedly committed to free enterprise and the improved competitiveness of Australian industry.

There has been only one major alteration in Australian tariff policy since Menzies pilloried the Vernon report in 1965 and that was the 25 per cent across-the-board tariff cut by the previous Labor Government. Since 1974 we have had four major Government-inspired reports (Jackson (1975), White Paper on Manufacturing (1977), Crawford (1979), Myers (1980), each calling tor reductions in Australian protection, to both improve our competitiveness and aid in the restructuring of our economy.

Many economists and business leaders, who can be considered objective, have made it quite clear recently that, first, the current economic climate is an ideal one in which to “bite the bullet” on protection and, second, not to act now would be dereliction of economic responsibility.

For the rational long-term prosperity of this nation one can only hope that the Government will bring itself to act sensibly and soon on the issue of planned tariff reductions. Continued procrastination on this matter, through the request of a further study, cannot possibly be justified. It would only serve to corroborate 16 years of unambiguous documentation on the need for tariff reductions.

(Dr) PETER C. FARRELL,
Professor/Director,
University of NSW,
Kensington.

***
9.
Peter Farrell, “‘Economic charade’ of tariff review,” The Australian Financial Review, February 4, 1982, p. 11, as a letter to the editor.

SIR, A leading article in Friday’s Financial Review (January 29) carried news of the Government’s intention to ignore the Industries Assistance Commission’s report on any suggested changes to protection levels for the textile, clothing and footwear industries. Since the motor vehicle manufacturers have also managed to dodge the IAC tariff review, one wonders why this economic charade would continue. Once again we see exposed the Government’s complete lack of political fortitude on issues of real economic import.

Some time ago in an editorial (August 18, 1980) the Review suggested that the grossly wasteful quota and tariff protection offered to the TCF industries would be cleaned up following the 1980 election. Based on this Government’s abysmal record on protection, I wrote to you at that time (Letters, August 21, 1980) suggesting that you were probably wrong.

In fact, with the benefit of hindsight, you could not have been more wrong. Not only was there no cleaning up, the situation has further deteriorated. We now have the economically farcical export facilitation and duty-free access plan for the car industry, as well as the now complete emasculation of the IAC inquiry by the Government’s refusal to consider any IAC proposals on the TCF’s protection racket.

We have been close before but I now feel we have finally arrived at cloud cuckoo-land economics in this country. After 6 years of Fraserism we not only have absurdly increased levels of protection but also the worst unemployment since the depression, interest rates which have gone through the roof and an annual inflation rate of over 11 per cent, which is now within 2 per cent of the rate of inflation in the final year of the Whitlam Government. And we all remember well that the latter was thrown out ostensibly for lack of responsible economic management.

Over recent months this Government has shown us that they are pretty good at talking free trade and economic management but not quite as adept at delivering the goods. In fact, nothing is working on the economic front. Perhaps the ultimate insult has been that as citizens we have had to suffer such a surfeit of political rhetoric on both economic responsibility and free trade from the same Government Ministers who have given us our present levels of inflation, protection, unemployment and interest rates.

DR PETER C. FARRELL,
University of New South Wales

(in order of appearance on Economics.org.au)
  1. Bert Kelly on his journalism
  2. Move for a body of Modest Members
  3. Modest Members Association
  4. Bert Kelly's Maiden Parliamentary Speech
  5. Government Intervention
  6. 1976 Monday Conference transcript featuring Bert Kelly
  7. Bert Kelly, Hayek and Mencken on the virtues of farmers
  8. Sound economics calls for quiet from government
  9. Petrol for Farmers
  10. Some Sacred Cows
  11. Experiences in Parliament
  12. Spending your Money
  13. Is Taxmania a politician fetish?
  14. Too many car men in the feather bed
  15. The Kangaroo Population Bomb
  16. How Bert Kelly repays a free feed
  17. Reining in the human rights horse
  18. Modest column #898
  19. Chicken-hearted feathered friends strange bedfellows on a feather bed?
  20. Who needs literary licence?
  21. A touch of Fred's anarchy
  22. Helping the farmers help themselves
  23. Standing on the shoulders of the downtrodden
  24. Supply and Demand
  25. Bert Kelly responds to claims he is arrogant and uncredentialed
  26. Politics: it's a very confusing business
  27. The best featherbeds run on rails
  28. Bert Kelly on Disaster Relief
  29. Bert Kelly Wants to Secede
  30. Blinded by their tears
  31. Anti-freedom pro-tobacco industry lobby harmed Australia
  32. Under Labor, is working hard foolish?
  33. An Idiot's Guide to Interventionism
  34. Is free priceless healthcare worthless?
  35. Can government kiss it better?
  36. Bert Kelly Destroys the Side Benefits Argument for Government
  37. Bert Kelly gets his head around big-headed bird-brained politics
  38. First Modest Member (Bert Kelly) AFR Column
  39. Second Modest Member (Bert Kelly) AFR Column
  40. Third Modest Member (Bert Kelly) AFR Column
  41. Fourth Modest Member (Bert Kelly) AFR Column
  42. Fifth Modest Member (Bert Kelly) AFR Column
  43. Sixth Modest Member (Bert Kelly) AFR Column
  44. Bert Kelly on the 2011 Budget and Australia's Pathetic Journalists and Politicians
  45. Bert Kelly, Bastard or Simple Sod?
  46. Liberal Backbencher Hits Govt. Over Import Restrictions
  47. Bert Kelly feels a dam coming on at each election
  48. Bert Kelly Enters Parliament
  49. Why take in one another's washing?
  50. Bert Kelly breaks the law, disrespects government and enjoys it
  51. Gillard's galley-powered waterskiing
  52. State Premiers are always asking for more taxing powers
  53. Can price control really work?
  54. Should we put up with socialism?
  55. We're quick to get sick of socialism
  56. Time the protection racket ended
  57. Can't pull the wool over Farmer Fred
  58. People not Politics
  59. Bert Kelly admits he should have had less faith in politicians
  60. The inspirational incentivising Dear Leader Gough Whitlam
  61. Labor: a girl who couldn't say no
  62. Why leading businessmen carry black briefcases
  63. Ludwig von Mises on page 3 of AFR
  64. Bert Kelly's empowering feminism
  65. Another shot at motor car madness
  66. Mavis wants the Modest Member to dedicate his book to her
  67. What if the whole country is swindled?
  68. Moss Cass: "Flood plains are for floods"
  69. A worm's eye view
  70. Eccles returns to haunt us
  71. How to grip a politician's ear
  72. It's hard to digest this economic cake
  73. Time to Butcher "Aussie Beef"
  74. Cold water on government-instigated irrigation schemes
  75. Hooray for Ord River Dam!
  76. Tariffs paid by exporters
  77. The problem of principles v popularity
  78. If you support State Quotas, where will your logic take you?
  79. Against guidance by government
  80. A socialist in Liberal clothing
  81. Never ask the government to help
  82. Don't listen to economists!
  83. Bert Kelly's revolutionary strategy
  84. Welfare state incentivises bludging and being thrown out of work
  85. It all sounds like bloody politics to Fred
  86. Mavis wants me to get in for my chop
  87. Whitlam's July 1973 25% tariff cut
  88. Bert Kelly on Import Quotas
  89. Good directions when government backseat driving, like reversing down wrong side of road
  90. Barriers to imports are barriers to exports
  91. "I was right" — but he's off to hospital ...
  92. Kicking the multinationals is too easy
  93. Bert Kelly reviews The War Diaries of Weary Dunlop
  94. Bert Kelly reviews We Were There
  95. Tariffs get the fork-tongue treatment
  96. Bert Kelly reduces government to its absurdities
  97. Politician sacrifices his ... honesty
  98. It's all a matter of principle
  99. Bert Kelly Destroys the Infant Industry Argument
  100. Bert Kelly Untangles Tariff Torment
  101. Bert Kelly resorts to prayer
  102. Eccles keeps our nose hard down on the tariff grindstone
  103. "Don't you believe in protecting us against imports from cheap labour countries?"
  104. Even if lucky, we needn't be stupid
  105. Great "freedom of choice" mystery
  106. Small government's growth problem
  107. I like my kind acts to get a mention in the press
  108. A Modest Member rakes the embers
  109. Tariffs Introduced
  110. More About Tariffs
  111. Sacred cow kicker into print
  112. Bert Kelly's 1984 two-article quote-collection on Aboriginal policies
  113. Modest Member must not give up
  114. Traditional Wheat Farming is Our Birthright and Heritage and Must be Protected!
  115. Tariff-cut nonsense lives on
  116. Bert Kelly brilliantly defends "theoretical academics"
  117. The high cost of protection
  118. Generosity creates problems
  119. The Society of Modest Members
  120. Is this an illogical, soft, complicated, unfocussed and unsuccessful attempt to communicate the case for markets?
  121. Modesty ablaze
  122. Case for ministers staying home
  123. The unusual self-evident simplicity of the Modest Members Society
  124. Animal lib the new scourge of the bush
  125. The Association for the Prevention of Cruelty to Krill
  126. modest members society
  127. Repeal economic laws, force people to buy new cars and enforce tariffs against overseas tennis players
  128. Thoughts on how to kill dinosaurs
  129. Let's try the chill winds
  130. Taking the Right's road
  131. Bert Kelly: "I did not try often or hard enough"
  132. Bert Kelly "lacked ... guts and wisdom"
  133. A look at life without tariffs
  134. The Gospel according to Bert
  135. Tiny note on Bert Kelly's column in The Bulletin in 1985
  136. Why costs can't be guaranteed
  137. Hitting out with a halo
  138. Paying farmers not to grow crops will save on subsidies, revenge tariffs, etc
  139. "The Modest Farmer joins us" | "How The Modest Farmer came to be"
  140. Bert Kelly Destroys the Freeloading Justifies Government Argument
  141. Industrial Relations Club shovellers
  142. From Shann to Stone
  143. Government Intervention
    vs
    Government Interference
  144. A sojourn in the real world
  145. The tariff wind swings
  146. Bigger Cake = Bigger Slices
  147. Bert Kelly on the Political Process
  148. A charabanc called protection
  149. Taken for a ride - to nowhere
  150. Down hill, in circles, all the way
  151. Economic facts and figures are statistics who should speak out
  152. Any cons arguing small business bad but big government good?
  153. Relationships with the Liberal Party
  154. Tariffs = High Prices + World War
  155. Bert Kelly's Family History
  156. Bert Kelly's Pre-Parliament Life
  157. What the MP could say to the Bishop
  158. Why Bert Kelly was not even more publicly outspoken
  159. WEATHER IS USUALLY UNUSUAL
  160. How to stand aside when it's time to be counted
  161. How the Modest Member went back to being a Modest Farmer
  162. My pearls of wisdom were dull beyond belief
  163. Bert Kelly on Political Football
  164. Undigested morsels in Fraser spew
  165. Bert Kelly on LSD
  166. Bert Kelly reflects on the Australian car industry in 1992
  167. Bert Kelly wants reprinted Shann's Economic History of Australia
  168. If tariffs are opposed here then why not there?
  169. The emperor has no textiles, clothing and footwear sense
  170. Ross Gittins Wins Bert Kelly Award
  171. Interesting 1964 Bert Kelly speech: he says he is not a free trader and that he supports protection!
  172. This is the wall the Right built
  173. The Impertinent Society: Cheeky MPs take Mr Anthony at his word
  174. Tariff Protection in Australia (1970)
  175. Has Santa socked it to car makers?
  176. Is the Budget a cargo cult?
  177. Will we end up subsidising one another?
  178. Keeping the bucket of worms alive
  179. Can we get off the stomach-churning head-spinning tariff merry-go-round?
  180. Do we want our money to fly?
  181. Can a bear be sure of a feed?
  182. How to impress your MP -
    ambush him
  183. The time for being nice to our MPs has gone ...
  184. Don't feel sorry for him -
    hang on to his ear
  185. Trade wars can easily end up on a battlefield
  186. Tariffs Create Unemployment
  187. Bert Kelly recommends Ayn Rand
  188. Bert Kelly on Alf Rattigan's Industry Assistance: The Inside Story
  189. Bert Kelly's Satirical Prophecy: Minister for Meteorology (tick) and High Protectionist Policies to Result in War Yet Again (?)
  190. Bert Kelly in 1972 on Foreign Ownership of Australian Farmland and Warren Truss, Barnaby Joyce and Bill Heffernan in 2012
  191. Bert Kelly baits Welfare State Tiger
  192. Why does Govt wear two faces?
  193. Parliament a place for pragmatists
  194. Of Sugar Wells and Think-Tanks
  195. Bert Kelly: "I must take some of the blame"
  196. Bert Kelly on dumping duties
  197. The Govt's helping hand often hurts
  198. Unbuckling the hobbles on the motor industry
  199. A Modest Farmer looks at the Problems of Structural Change
  200. Government Fails Spectacularly
  201. Know your proper place if you want the quiet life
  202. Bert Kelly on political speech writers
  203. Having your cake and eating it
  204. Perish the thawed!
  205. Hooray for Northern Development!
  206. Politicians can resist everything except pressure
  207. The silly image of our MPs
  208. Bert Kelly Question Time highlights
  209. Modest Farmer sees his ideas take hold
  210. Should facts stand in the way of a good story?
  211. Fondling one another's glass haloes
  212. What is the sense in making the effort to look after yourself?
  213. Fred's Feeling: Counterpatriotic country contrarian
  214. Handouts for big boys only
  215. Mavis trying to buy a hand loom
  216. Bad news for bearers of bad news
  217. Is it time to get aboard the tariff band-waggon?
  218. Why farmers resent tariff protection for motor makers
  219. A sordid use of scare tactics
  220. Goods vs services
  221. Tariffs are hilariously counterproductive
  222. The dilemmas of Aboriginal Affairs
  223. Bert Kelly on decentralisation
  224. Inflation breeds moral decay
  225. Who envies equality?
  226. Growth – malignant or benign?
  227. Government wiser than Magna Carta
  228. Bert Kelly on looking to politicians for moral leadership
  229. Max Newton: Maverick in Exile
  230. Whitlam & co on the Dismissal
  231. 25% Tariff Cut
  232. Bert Kelly on pensions
  233. The plotting powers of Mavis nag martyr to snag compo
  234. The backseat drivers of the Pilbara
  235. Mr Clunies-Ross of the Cocos Islands should rule Australia
  236. They get the wind up when it changes
  237. Why the Big Green Lie survives
  238. Ross McLean in 1982: "Malcolm! Why don't we try good government? It might be popular."
  239. Bert Kelly on the importance of exchange rate movements
  240. Bert Kelly shows how to attack
  241. Bert Kelly vs Bert Kelly vs Bert Kelly
  242. Industrial relations dinosaur, Bruce, chews his cud
  243. Hooray for "firmly entrenched"!
  244. Respect your dinosaurs
  245. What if something is "deeply ingrained" yet harmful?
  246. A case for ministerial inertia
  247. Why politicians don't like the truth
  248. Punemployment: people are neither numbers nor puzzle pieces; the platitude attitude
  249. Our great open spaces ... an empty blessing
  250. Heart in right place but head missing
  251. Ominous dark clouds are gathering
  252. Proverb vs proverb
  253. Better to be popular than right
  254. Crying in the wilderness
  255. Ivory tower needs thumping
  256. Bert Kelly asks, "How can you believe in free enterprise and government intervention at the same time?"
  257. Politicians get undeserved praise, why not undeserved blame too?
  258. Feet in a bucket of champagne
  259. Rural Problems
  260. Health cover needs a $30 excess clause
  261. Unholy state of taxation
  262. Boring economics worth a smile
  263. The Libido for the Miserable
  264. Agricultural Development and Tariffs
  265. Fred's too poor to have principles
  266. Eccles Law of the constant wage share
  267. "He whom the gods would destroy ..."
  268. Low tariff torch burnt Eccles' fingers
  269. A cow of a car — with dual horns
  270. Tariffs: when to wean infant BHP?
  271. Keep any government as far as possible from farming
  272. The Playford charade is out of date
  273. Bert Kelly: the odd man out who's now in
  274. Dries must resist giving up struggle as going gets tough
  275. How a well meaning Government can be so stupid
  276. The icing on the economic cake
  277. Sir Roderick Carnegie's foreword to Bert Kelly's Economics Made Easy
  278. The Vale of Popularity and the Protection Procession
  279. Politics 101: Pay Lip Service to Capitalism and Shoot the Messenger
  280. Bert Kelly makes politicians eat their own words on tariffs, then says, "We cannot be blamed for treating the statements of our statesmen with cynical contempt"
  281. Bert Kelly on Free Enterprise
  282. Cartoons of protected industry, the welfare teat and the nanny state
  283. Bert Kelly on the theory of constant shares and the Fabian Society
  284. Bert Kelly vs Doug Anthony
  285. You're lucky if you escape being helped by government
  286. Bert Kelly on Small Farmers
  287. Bert Kelly on Apathy
  288. Bert Kelly in 1967 on "problems of government and things like that"
  289. The last "Dave's Diary"
  290. Bert Kelly vs The Australian on tariffs in 1977
  291. Bounties or Tariffs, Someone Pays
  292. Geriatric companies without a minder
  293. A free marketeer wary of free trade
  294. Nixon's puzzling profession of faith
  295. "Ford ... seems to spend more time bending its knees than its back"
  296. Clyde Cameron's weak ways with wise words
  297. Why flaunt what others flout?
  298. Bert Kelly yearns for Tim Flannery's powers of prediction
  299. Looking after yourself is silly
  300. Bert Kelly masterpiece on drought, fire, flood and other natural disaster relief schemes
  301. Government can take credit for our car industry mess
  302. Car makers want the 4wd driven deeper into tariff bog
  303. Why our MP is no longer prone to a good sob story
  304. Auto industry is in a straitjacket
  305. Bert Kelly on market predictions
  306. Why should dryland farmers subsidise irrigation farmers?
  307. How much should government decrease incentive for independence from government?
  308. Clarkson crowned Deputy Government Whip
  309. Bert Kelly to blame for soaring government healthcare costs
  310. 1959 return of Dave's Diary
  311. Bert Kelly in 1966 on developing northern Australia
  312. Successful government intervention can [sic] occur
  313. Vernon Report upholds Clarkson
  314. Quiet Man Makes An Impact
  315. Should it be compulsory to buy footwear and clothing?
  316. To save Australian clothing industry women must all wear same uniform
  317. Don't confuse plucking heart strings with plucking harp strings
  318. Speech only for public
  319. Catchy Tariff Circus Extravaganza
  320. Bert Kelly in 1985 on cars yet again
  321. Hurrah for the Gang of Five
  322. Thoughts on a verse about Balfour
  323. Bert Kelly pep talk to politicians
  324. Government intervention = Agony postponed but death brought nearer
  325. Recipe for disaster: Freeze!
  326. Recipe for government intervention: Gather winners and scatter losers
  327. Recipe for industry destruction: Blanket market signals
  328. Mavis writes!
  329. Bert Kelly's empiricism is not kneejerk reaction kind
  330. The $2,000 song of the shirt worker
  331. Subsiding only small farmers means subsiding the big banks
  332. Difficult to be fast on your feet when you've got your ear to the ground
  333. It would surprise people to see how sensible MPs behave if they think they are not being watched
  334. Bert Kelly on "this land of limitless resources" and "great open spaces"
  335. Growing bananas at the South Pole
  336. Car components tariff protection under fire
  337. Why carry a $300m car subsidy?
  338. Tariff feather beds for the foreign giants
  339. Bert Kelly says end compulsory voting to stop donkey vote
  340. Perhaps being smart and insured isn't all luck
  341. You gets your tariff, you pays a price
  342. More funds to train Olympians?
  343. Fire in their guts and wind in ours
  344. Should free universal healthcare include pets?
  345. Sound advice from a modest farmer
  346. A tottering monument to intervention
  347. Cunning meets wisdom
  348. Competition, Aussie-style: Who's the bigger parasite?
  349. Australians are proud patriotic parasites, says Bert Kelly
  350. Taxpayer-funded sport is cheating
  351. Being loved by all is not always a good thing
  352. Welfare State Destroys Society
  353. 1980 Bert Kelly feather bed series
  354. The White Mice Marketing Board
  355. Government intervention and advice can be harmful, even when right, even for those it tries to help
  356. One small step on the compulsory voting landmine
  357. The free & compulsory education sacred cows have no clothes
  358. Holding a loaded wallet to an economist's head
  359. Political No Man's Land
  360. Only blind greed demands both equality and prosperity
  361. A cow that sucks itself — that's us!
  362. Foot-dragging on lifting tariff drag
  363. Nip the bud of incentive; mock community spirit into submission
  364. Bert Kelly questions why miners pay royalties to the Crown
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(in order of appearance on Economics.org.au)
  1. Peter Farrell compares Australian universities to nursing homes
  2. Foot-dragging on lifting tariff drag
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