Were there tariffs on military exports?

[Rule of cool]

I don't know where else to ask this, and I've arrived here via a circuitous route so please bear with me.

I've recently gone down the rabbit hole of the Australian car industry of the 60s and apart from the basic Australian manufactured models we imported Zephyrs and Crestas from the UK and Chevs, Pontiacs, Fairlanes and Galaxies from Canada in Completely Knocked Down kits. They were welded and painted in Australia and used a lot of locally sourced parts liked windows and trimmed interiors etc. This was done because there were no tariffs in the Commonwealth at the time and there were all sorts of complex local content rules for this, and it kept scarce US currency reserves on hand by sourcing from Canada not the US.

This reminded me of Mirage production in the 60s, with ever increasing locally manufactured components including engine castings and forgings. Is this why we built the Canberra, Sabre and Mirage and various warships back in the day? IIUC there was a 35% tariff on fully imported cars, so would building these planes here avoid something like that?

 

[DWG]

This reminded me of Mirage production in the 60s, with ever increasing locally manufactured components including engine castings and forgings. Is this why we built the Canberra, Sabre and Mirage and various warships back in the day?

If you see retaining a national aircraft industry as a strategic necessity, plus have all the locals at Fisherman's Bend to keep employed, and therefore not tempt most of Melbourne to vote for the current opposition at the next elections, then building locally is pretty obviously the better choice.

Remember, tariffs are something governments use to discourage imports they dislike, not ones that are government policy, and can be changed at the drop of a hat.

 

[Rule of cool]

The Government doesn't pay GST now, presumably they didn't pay tariffs back then. However the foreign currency stocks was definitely a thing, we talk about it for the British all the time.

Presumably the Government buying locally assembled Chevs etc as ComCars is to support local industry. Presumably when not paying a 35% tariff the Government could get better, US-spec cars from the US at a reasonable price. That said, I was very surprised at how little Australians expected from their cars in the 60s and how different the Australian market was from the US market at the time.

 

[MrPhantomMan]

It's a hard question to answer. What you'd need to do is go and find the AU Tariff document for the time period and then you'd need to find the Regulations and/or the Act. Those would tell you what the conditions were around those importations.

 

[Rule of cool]

For the military gear it's definitely a strategic thing and to generate employment. In 1963 WW2 was fresh in everyone's memory, so it's obvious that Australia needs to build as much military equipment as it can in case WW3 breaks out and we have to defend ourselves.

As for assembling the cars from CKD kits imported from the UK and Canada, that was at least semi-strategic. The idea was that unemployment pushed people to become Nazis and Communists, so full employment was a political goal and dovetailed nicely with having busy factories that could converted to war production if needed. Thus a 35% tariff on imports from outside the Commonwealth, and all sorts of local content rules for CKD cars helped keep our factories busy in part and our workers content enough to not become Communists.

The interesting thing was that in the early 60s 1/3 of the average American annual income was sufficient to buy a Chev Belair, whereas an early 60s Australian manufactured Holden cost 2 years of the average annual Australian income. A big, V8-auto Chev Belair welded, painted and assembled with significant local content like windows in Australia was at least twice the price of a Holden. This huge price difference saw GM-H trim Belairs with quality wool carpets, Howe leather upholstery, trim the boot etc, thus what in the US would be a cheap car became the top of the line luxury in Australia, seen on the news reels at Parliament House etc.

 

[Yellow Palace]

Remember, tariffs are something governments use to discourage imports they dislike, not ones that are government policy, and can be changed at the drop of a hat.

Tariffs are also paid for, in economic terms, by the purchaser - and all public funds both originate from and are paid into the same treasury. So if an item is purchased by the government, whether or not tariffs are paid is really a question of whether to pass money from the left hand to the right hand and back again, or to keep it in the right hand.

 

[DWG]

Tariffs are also paid for, in economic terms, by the purchaser - and all public funds both originate from and are paid into the same treasury. So if an item is purchased by the government, whether or not tariffs are paid is really a question of whether to pass money from the left hand to the right hand and back again, or to keep it in the right hand.

That's true on the national level, but on the departmental level tariffs are more cost to the Ministry of Defence, more tax revenue to the Treasury, and that means the defence budget doesn't go as far.

 

[amadolabonte]

I don't know where else to ask this, and I've arrived here via a circuitous route so please bear with me.

I've recently gone down the rabbit hole of the Australian car industry of the 60s and apart from the basic Australian manufactured models we imported Zephyrs and Crestas from the UK and Chevs, Pontiacs, Fairlanes and Galaxies from Canada in Completely Knocked Down kits. They were welded and painted in Australia and used a lot of locally sourced parts from windows and trimmed interiors to even the delicate hochzeitsfloristik wiesbaden arrangements for the factory boss’s daughter’s wedding etc. This was done because there were no tariffs in the Commonwealth at the time and there were all sorts of complex local content rules for this, and it kept scarce US currency reserves on hand by sourcing from Canada not the US.

This reminded me of Mirage production in the 60s, with ever increasing locally manufactured components including engine castings and forgings. Is this why we built the Canberra, Sabre and Mirage and various warships back in the day? IIUC there was a 35% tariff on fully imported cars, so would building these planes here avoid something like that?

Building the Canberra, Sabre, Mirage and the warships in Australia avoided burning scarce foreign currency (especially USD), sidestepped any potential import duties on military gear, and satisfied the government’s obsession with increasing local content and keeping the money in Australia; just like knocking together Canadian Chevs and British Zephyrs in Brisbane to dodge the 35–40 % car tariffs. Same policy, bigger bombs.