Brickworks / Glen Gary acquisition mentioned in news article on wages, page-20

The moment government subsidise anything the price goes up. The car industry was a classic. Car manufacturers in Australia were making cars that we're simply not competitive. They needed hundreds of millions of dollars from the tax payer to stay viable. The moment that money was threatened car manufacturers went elsewhere. Government also included high tariffs on imported cars to keep the prices of them high to make our locally produced cars seem less expensive in comparison.

Now that there is no car manufacturing there is a strong argument to remove those tariffs and drop car prices by 5-10%.

Should government protect uncompetitive industry? Those that feel strongly government should protect the car industry are making the same argument that government should protect fossil fules, logging, prop up housing etc. All those fields have skewed pricing because of government intervention.

Here is an example of a subsidy causing uncompetitiveness. Two building companies are operating in Australia. One company operates with high building prices, high brick prices, high trades prices, the way things have always been done. The other sees the opportunity of building a machine to lay bricks and forms a relationship with a firm that can supply blocks at 1/3 the price by getting them made in a more competitive country....
The government hears about this and is in in arms about the jobs that could be lost so offers any traditionally built homes a subsidy of $20,000 per build.
How do you like subsidies now? Do they help the market or innovation?