We Need A New History of Australia
Talking to an economist this weekend about how the Australian economy was opened up I thought this part of our story has not been told. Our indigenous histories overflow from library bookshelves, every no-account politician has studies of his or her every waking thought, the womens’ movement has set the record straight. But where does an historian tell the story of Alf Rattigan?
He was the public servant who headed the Tariff Board in the 60s and realized the insanity of setting tariffs for steel and razor blades, of managing an economy where the inputs were priced high by tariffs and we could never become a manufacturing exporter because of these high domestic costs. In the 1960s under his leadership the Tariff Board became a crusader for economic rationalism.
His deputy Alan Carmichael would secretly meet South Australian Liberal Bert Kelly, the lone parliamentary free trader, to slip him information on the tariff rackets that granted “arbitrary and capricious favors” to pockets of industry. Kelly for his part wrote a column in The Financial Review under the heading “A Modest Member”.
Slowly journalists and politicians began to question the hand-out mentality and the cost of forcing consumers to buy artificially expensive cars and clothes and shoes. Billy McMahon began to resist Country Party leader Jack McEwen on the issue of Tariff Board independence. A free trade history of Australia would say something kind about McMahon in this period and something harsh about McEwen.
From Whitlam to Hawke and Keating and Howard a new consensus developed. The triumph of free trade came when, in the recession of 1991, Hawke refused to soften on the wind down of tariffs for the vehicle industry. It was his proudest moment as PM. His Industry Minister John Button would go into regional towns about to be affected by tariff cuts and explain why this had to happen.
Here stands the killer fact : an Australian family ended being a thousand dollars a year better off because of the cheaper school clothes and footwear made available through cheaper imports coming into our stores. And the country got a new car fleet that was newer and environmentally superior to the overpriced, clapped-out vehicles produced behind 57 percent tariff walls.
No history books will tell you that in the 1950s you couldn’t buy baby food from the super market but from pharmacies only, another bit of protection in the closed, over-regulated economy that was keeping Australia quaint.
Free trade versus protection was the defining politics of the 1890s and early 1900s and George Reid, NSW free trader lost to Victorian protectionist Alfred Deakin who was backed by the economic primitivism of the infant Labor Party. Only in the 60s did some brave public servants open up the issue and politicians begin to accept the impoverishment that came with forcing families to pay more for imports and forcing businesses that might have been viable to struggle with the high costs of the protected sectors.
They should read the story in school textbooks.
Of course, the one area we were too afraid to open up is books. To keep one Victorian printing plant alive we force Australian families to pay a third more for books than they would if bookshops could order from overseas without restriction. No example makes the impoverishing folly of protection clearer.