Sunday, 12 September 2010

Bob Katter's Protectionist Demands

The 2010 Federal Elections in Australia created a hung Parliament. In order for one of the two major parties to gain enough seats in the lower house of parliament to form government, a coalition needs to be formed with a bunch of independents. Most of these independents are either urban socialists (Greens politicians) or rural socialists (the ex-Nationals). One of these independents is Bob Katter.

On a recent episode of Q&A, Bob went off about how Australia should apply tariffs to protect its manufacturing and agriculatural sector. He claims that Australia should do this because so many other countries do it. The problem with tariffs on agricultural goods is that they will increase the costs of food. When you go to buy your groceries you will pay more. The costs of living are high enough and a tariff will only increase those costs. Why will food prices go up if there is a rise in tariffs? Tariffs discourage imports. If there are fewer imports, there is less competition. Australian farmers can raise prices of goods without worrying about foreign imports undercutting their products. That other governments protect their agricultural industries is no excuse for the Australian government doing so. That the American government or the European governments apply tariffs only benefits the farmers at the expense of everyone else who pays higher prices for food.

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