26/09/2006 - 22:00

New’s take on productivity

26/09/2006 - 22:00

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State Scene is pleased to report that one of Western Australia’s most important, but largely unappreciated, post-war entrepreneurs is set to be recognised with publication of a biography.

New’s take on productivity

State Scene is pleased to report that one of Western Australia’s most important, but largely unappreciated, post-war entrepreneurs is set to be recognised with publication of a biography.

He is the late Ric New, a brave man whom WA’s leftists loved to hate even though they, their families, and hundreds of thousands of Western Australians benefited, and continue to benefit, from his farsightedness.

Those who knew Mr New through business and other dealings will agree he was as straight a shooter as you’d find anywhere across our state.

Mr New, although born in England, was an old style West Aussie – unpretentious, dogged, shrewd, and cautious; a man who did well at whatever he set out to do.

In his case, what he eventually did was manufacture and deliver economically priced bricks, primarily for home or cottage construction.

Mr New later diversified his company, Midland Brick, now part of the Boral Group, and began producing economically priced pavers.

State Scene here leaves aside such points as his place of birth, schools attended, and the like, which will be found in his forthcoming biography, and turns instead to highlighting his primary contribution to WA.

It’s enough to say that, during the war, he was producer of charcoal for use as an automobile gaseous fuel, since petrol was stringently rationed.

State Scene met Mr New in 1983 while I was research director of the Perth Chamber of Commerce.

Brian Burke-led Labor had just gained power and, because of Mr New’s life-long interest in labour relations and pertinent legislation, he joined a chamber committee.

Mr New was no friend of unionism and was consequently disliked by ardent unionists.

It was during this period that I had several long chats with him that revealed why he took a strong and clear-minded stance on this issue.

Mr New and his brother, Gerry, opted after the war to manufacture bricks because of their dire shortage and rationing.

I think they chose this line of business because their father had been a builder, and Mr New had worked in building.

However, they saw no need for such mass inconvenience and deprivation, which was forcing people to live in lean-tos, garages, veranda and other unsightly abodes.

Mr New believed that all governments needed to do was step aside and allow the imagination, energy and inventiveness of individuals to blossom so that where shortage prevailed, abundance would promptly blossom.

He was someone who strongly believed in self-help, what economists call laissez-faire, something that was quite unfashionable throughout the 1940s and for many years after, especially among academics, bureaucrats and many Labor MPs.

Seeking bricks in the Chifley Labor post-war era meant enduring a torrid ordeal.

Building a house in Perth, and elsewhere in WA, was a Herculean task, which even involved bureaucrats.

The New brothers saw this state of affairs as an opportunity, not a problem, and so went about making bricks. To do that meant jumping a whole series of high hurdles, including the acquisition of machinery, fuel and clay.

How they initially obtained the latter two I’ve now forgotten.

But I recall Mr New telling me, with pride, how they acquired old American Lend Lease military equipment and Australian-made Brengun carriers, and improvised their way into building the necessary capital equipment.

Old military gearboxes, engines, and scrap bulletproof steel were the basic raw materials of their first batch of brick-making machinery.

Improvisation, it should be noted, is one of the ignored aptitudes of Australians since colonial times, for, as some still say: “When you’re 500 miles from nowhere you can’t whiz down to the corner store to buy ready made parts – you’ve just gotta make them”.

The New brothers shared this with Australia’s pioneering generation.

As WA’s economy expanded during the 1950s, with the pressure of backlog in aggregate demand from the depressed 1930s and subsequent war years, Midland Brick grew.

This was followed, in the 1960s, with the demographic impact of the ‘baby boom’ generation marrying and multiplying, a trend that was boosted by overseas and intra-state migration due to the expansion of Pilbara quarrying and mining and the Goldfield’s nickel finds.

Mr New came to dominate Perth’s brick-producing sector over those years.

I recall him saying that whenever he travelled overseas to update his brick-making machinery – kilns and the like – he was amazed at the response of European and North American brick manufacturers when he quoted his huge annual output figures.

His words went something like: “I’m seen by them as something of a brick baron because in America and Europe there tends to be only small to middle sized manufacturers.”

Mr New believed in economies of scale because that meant dramatically slashing unit cost of bricks, which lowered house prices.

He prided himself on the fact that people in Perth, indeed Western Australians in general, were housed predominantly in brick homes, something he was largely responsible for because of his cheap and abundant bricks.

Timber-framed housing, which he regularly highlighted as dangerously fire prone, was steadily replaced by brick as the preferred material for residences because of Mr New’s efforts.

It is, therefore, quite fair to say that, by ensuring Perth’s suburbs are dominated by brick residences, Mr New did more for WA’s greenie causes than cohorts of Greens.

He also prided himself on the fact that he’d revolutionised the state’s housing sector in other ways.

For instance, his company trained anyone wishing to become a bricklayer.

Midland Brick offered those able and willing to become brickies 20-week fast-track in-house brick-laying courses. That’s why WA’s home construction sector met the skills shortage in bricklaying, and at no cost to taxpayers.

On top of that, home construction was firmly based on sub-contracting, not a unionised workforce as exists in the heavy construction sector.

One of the major benefits flowing from this was that productivity in bricklaying was high, which meant lower unit costs in cottage construction.

And sub-contracting was extended to the delivery of bricks to building sites by those huge, fully laden trucks one still so often encounters at highway intersections.

Mr New encouraged the emergence of an owner-driver brick delivery sector. And to ensure that his steady restructuring of this sector wasn’t threatened, and possibly even undone, he was always prepared to put his toe into the political waters.

By this I mean he was willing to fund political parties and candidates to ensure that WA’s Labor Party, so strongly controlled by union thinking, never legislatively altered the market structures he’d so shrewdly created for the benefit of home owners.

That, more than anything, explains why the Labor government in 1985 sold, for a mere $450,000, the valuable Midland abattoir site to former policeman, Peter Ellett, to launch a competitor brick works; a move that sparked a parliamentary inquiry.

Finally, I had a few final chats with Mr New in the late 1980s, after I’d returned to journalism.

These discussions generally focused upon Labor’s decision to team-up with so many of the state’s incompetent millionaires, who set out with Labor to transform large segments of WA’s economy into Mussolini-style corporatist arrangements; something far removed from Mr New’s laissez-faire ideal.

The one memory that firmly remains in my mind from those chats is that he had absolutely no respect for any of these so-called four-on-the-floor wheeler dealers, who he believed were self-seeking Labor pals, which meant they gained access to taxpayers’ dollars and other insider favours.

He invariably chuckled whenever the names of key WA Inc media, property and fast-money magnates were raised, as if knowing their day of historical reckoning would eventually come, which is precisely what happened.

Mr New died in 1989, well before their costly WA Inc disasters were exposed at a royal commission.

Had he lived into the early 1990s when the royal commission was held, nothing that surfaced during those hearings would have surprised him.

Of that we can be sure.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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