INCOME DISTRIBUTION, WELFARE AND THE AUSTRALIAN TARIFF.

Ever since the publication of the Brigden Report [1929], income distribution has always been an important element in the arguments for protection put forward by academic economists in Australia. It is noteworthy that, although the theoretical developments necessary to begin to unravel the income redistributive effects of protection have been well-known for nearly 30 years, there have been few attempts to estimate empirically such income redistributive effects of a tariff structure for any country. Perhaps the best known studies of protection which attempt, amongst other things, to say something about direction of change in factor prices induced by the tariff structure are by Vaccara [1961], Travis [1964] and Basevi [1966]. However, I know of no attempts to assign orders of magnitude to such effects. Part of the reason for the lack of attention to problems of income distribution and the tariff stems from the difficulties in building theoretical models which give a priori predictions about factor price changes when more than two factors are included and the empirical problems involved in implementing such models. Another reason may be that economists today tend to be more concerned with growth which increases everyone's income, rather than worrying about redistributing what is already available. Be that as it may, there is in Australia a long history of concern with both static and dynamic effects of tariffs on wages, employment, and income distribution, and economic welfare in general, and it is to these questions that this paper is addressed. In section II, a brief history of the empirical and theoretical aspects of the income redistribution argument for protection in Australia is outlined. A two sector version of a multi-sectoral growth model, which can be used to estimate empirically the effects of tariffs on factor prices, is described in section III. The empirical implementation of the multi-sectoral version of that model is described in section IV, and... [ABSTRACT FROM AUTHOR]