In relentless detail we were given potential expenditures, earnings and investment figures along with various production figures in the obvious belief that they justified car tariffs. Business groups also claimed that Holden's investment plans were proof that Howard's tariff back down was the right decision. The premier of South Australia, John Olsen, joined this barrage of ignorance and announced that Holden s planned malinventment in the state confirmed the necessity for car tariffs. But then Olsen, like many 'journalists', has never been shy about parading his economic illiteracy. The belief that car tariffs or any other tariffs can promote exports is utterly absurd.
Tariffs reduce exports.
When we impose tariffs we reduce the ability of foreigners to buy Australian goods by denying them access to Australian dollars. Obviously, by imposing tariffs we are reducing the demand for Australian exports. In addition, the tariffs raise the production costs of exporting industries making them less competitive. These are only some of the costs of tariffs impose on the community. Yet the likes of Kable and Olsen still insist on arguing otherwise.