BOOK REVIEW: News Weekly
Lonely pioneer of trade liberalisation
, November 10, 2012
THE MODEST MEMBER:
The Life and Times of Bert Kelly
by Hal G.P. Colebatch
(Ballan, Victoria: Connor Court)
Paperback: 300 pages
Reviewed by Jeffry Babb
C.R. “Bert” Kelly was federal Liberal member for Wakefield, an agricultural electorate in South Australia, from 1958 to 1977. He is most famous for his wise but humorous column, published in the Australian Financial Review, from 1970, entitled “The Modest Member”.
The Modest Member, aided by a cast of characters including his “wife” Mavis, neighbouring farmer Fred and the economist Eccles — when the latter could be persuaded to climb down from his ivory tower — argued over the merits of trade liberalisation through tariff reform.
Kelly came from a long-established South Australian farming family which had its origins in the Isle of Man. His family had a tradition of public service, one which Bert Kelly felt duty bound to embrace. His family was Methodist to the roots and Kelly gained his first speaking experience as a lay preacher.
In conventional terms, Kelly had a respectable career — he was deputy whip, Minister for Works and Minister for the Navy, which mainly meant he was the navy’s principal public relations agent, perpetually seen being hoisted on and off ships. All these were low-level posts.
But Kelly’s chief claim to fame was as an advocate for tariff reform. His opponents were quite unjustified in mistaking his folksy manner for a lack of education. He held a Nuffield Farming Scholarship in the United Kingdom and, although he was a self-taught economist, he could argue his case with impressive intellectual rigour.
In this sense, he was one of the most influential politicians of his era. When he entered parliament, the Australian economy was surrounded by high levels of tariff protection for manufacturing.
However, the application of tariffs frequently had no logic at all. Why, for example, was there a tariff on weedkillers, used almost exclusively by farmers, when there were no Australian producers?
Kelly was far more than a forerunner of economic rationalism. His religious upbringing had instilled in him a fierce sense of right and wrong. It offended his sensibilities that one firm could be bankrupted and another enriched by no more than a stroke of the minister’s pen.
For much of his career his principal opponent was the legendary Country Party leader and Minister for Trade, John “Black Jack” McEwen. McEwen was federal member for Indi, an agricultural electorate in northern Victoria. As leader of the Country Party (later the National Party), he often wielded the power of life or death over the Liberal-led Coalition government. Even Robert Menzies, Australia’s longest-serving Prime Minister, couldn’t stare him down.
So completely has the ideology of free-market economics, deregulation and trade liberalisation come to dominate economic thinking in Australia that it takes a major effort of imagination for today’s generation to gain some understanding of McEwen’s rationale for pursuing high tariff protection — a policy that became known as “McEwenism”.
Tariffs had a mixed impact on different sectors of the Australian economy. They benefited farmers (the Country Party’s chief constituency) and manufacturers in some ways, but simultaneously increased industry’s costs. Also, the burden of any tariff-based economy falls on the exporters, most of whom during this period were farmers. Nevertheless, McEwen was adamant in his belief that the Australian economy gained a net benefit from high tariff protection.
Bert Kelly, with his then unfashionable economic views, led a very lonely life in parliament. Sometimes almost the only person listening to him was his wife, Lorna, in the public gallery. He had some supporters such as Dr Jim Forbes (Lib, SA) and Senator Peter Sim (Lib, WA), but still it was a hard row to hoe. The ALP mined its own rich vein of economic irrationality, with figures like Dr Jim Cairns, sometimes supporting Kelly, sometimes not.
McEwen’s successor as Country Party leader and deputy prime minister, Doug Anthony, continued his predecessor’s economic policies. He opposed the creation of the Industries Assistance Commission (IAC), successor to the old Tariff Board.
IAC chairman Alf Rattigan fought to establish a tariff decision-making process that was open, transparent and based on logic. His view was not always popular. Others, such as journalists Maximilian Newton and Robert Haupt of the Australian Financial Review, lent support from the sidelines.
What can we say about Bert Kelly? He wasn’t a great statesman by most measures. He never held high office, and the ministries he did hold could be interpreted as sops to prevent him from breaking Cabinet solidarity by speaking out on tariff reform. He lost pre-selection in 1977 mainly because, as he readily admitted, he didn’t take much interest in party matters. He was a good public speaker but not much of a diplomat. Kelly took an interest in young people, but from my experience he could also be very abrupt.
In the end, however, he won. The economic “dries” in the Coalition parties took up the running; but it was the Hawke-Keating Labor governments that put the final nails in the coffin of the old tariff regime.
Western Australian author Dr Hal Colebatch has done an excellent job with his biography of Bert Kelly. He has presented Kelly’s case to posterity sympathetically, but writing as an advocate rather than as a hero-worshipper.
Bert Kelly was no extremist. He could never be depicted as a doctrinaire and inflexible free trader; but he did recognise people can’t buy our goods unless we buy theirs. He was, all in all, a very reasonable man.