The national broadcaster is failing the nation badly by misreporting Australia’s economy, as Alan Austin reports.
THANK GOODNESS we can switch off ABC News and go to the footy coverage. Multiple recent broadcasts confirm the ABC’s newsroom is now a more destructive source of misinformation and misery than Rupert Murdoch’s treacherous network.
Fomenting fear and loathing
ABC News secured an interview last week with the chief economist at the National Australia Bank (NAB), Sally Auld, one of the country’s most insightful economists.
The segment, titled ‘Business confidence crashes to levels not seen since COVID onset’, drew on the NAB’s monthly business survey for March. Predictably, business confidence has plummeted since U.S. President Donald Trump’s madness has caused global upheavals.
The presenter said:
“This is a shocking report. It has all the hallmarks of an economic crisis. Where are we seeing this playing out in the economy?”
The answer, of course, is that there is no crisis in Australia’s economy. But we did not get to hear Dr Auld say that. She got as far as mentioning recent mild interest rate rises and “everything that has transpired in the Middle East over the last four to five weeks”.
A sharp edit prevented us from hearing whatever she said next.
The presenter then asserted:
“Sally Auld, this is an ominous sign for consumers already worried about price hikes.”
Pure nonsense. Inflation has remained below 4% for the last 26 months. February’s inflation was lower than January’s.
Of course, most of the world must pay more for petrol while supply is disrupted, but that ought not cause debilitating anxiety.
It would be intriguing to hear what Dr Auld told ABC News, which they edited out.
Auld has been quite upbeat all year, including earlier this month when assuring the NSW Rural Press Club that:
“One positive around all of this is that the jumping off point to face into the Iranian conflict is a low unemployment rate, basically full employment, and GDP growth that is actually pretty solid.”
The confidence trick of business confidence
The ABC’s main failure here was implying that the business confidence index measures anything tangible. It doesn’t.
Australian entrepreneurs are basking in an economy with the best combination of full employment, low inflation, optimum interest rates and stable GDP growth ever reported.
So what is the correct response to a pollster who pops this question: “Excluding normal seasonal changes, how do you expect business conditions to shift in the future?”
Naturally, with all of Trump’s malicious follies, an intelligent respondent will anticipate deterioration. But that does not signal anything material has shifted, nor that it inevitably will.
The interview ended with the monumentally stupid question: “Are we heading for a recession?”
A recession is usually defined as two quarters of negative GDP growth. So the time to speculate about that is well after the first negative quarter. That is nowhere in sight.
Dr Auld answered emphatically: “No.”
So what did ABC News do then? They incited anxiety all that day and every day since with dire threats of recession.
A companion report in the same bulletin was headed ‘The risk of a recession escalates as the Middle East war continues’.
The presenter asserted that:
“...the economic shock from the war in the Middle East is hitting home. There’s pain at the pump, prices are spiraling and fears are building that Australia could face a recession.”
This is speculative fear-mongering with no foundation.
Multiple blatant falsehoods
A segment aired last Wednesday was titled ‘World on brink of global recession if oil price shock continues: IMF’.
The presenter began:
“Sounding the alarm, the International Monetary Fund warned a prolonged war in the Middle East could push the global economy to the brink of recession.”
That is manifestly false. The IMF has not forecast a global recession. In fact, the principal graphic in this segment was the IMF’s ‘severe scenario’ presented to recent Spring Meetings in Washington. This clearly showed growth forecasts at 2% this year and 2.2% next year. Those are not recessions. See screenshot below.
Other recent highly irresponsible negative ABC News “stories” include:
- ‘Westpac CEO warns 'there's a chance of a recession' as interest rates rise.’ [3 April];
- ‘Nightlife News Breakdown — Ceasefires and recessions.’ [9 April];
- ‘IMF warns of inflation surge.’ [15 April];
- ‘Consumers are cutting back on spending amid higher risk of global recession.’ [17 April]; and
- ‘‘Complacent’ market drifts lower as economic outlook sours.’ [17 April].
These confirm that those who produced these reports don’t understand what a recession is. Does anyone at the ABC?
Classic historic blunders
Some readers will recall similar alarmism 17 years ago when the Global Financial Crisis whacked most of the developed world.
The ABC’s AM program in February 2009 featured Chris Richardson from Access Economics declaring:
“What is happening internationally is absolutely diabolical... Nothing Australia can do will stop recession here because it's recession everywhere.”
Happily, that was quite false. Australia’s economy grew 1.01% in the 2009 first quarter, generating annual GDP growth of 1.63%, the highest of all 36 OECD countries.
The personnel credited with the world’s best decision-making in 2009 included then Treasury Secretary Ken Henry, Prime Minister Kevin Rudd, Treasurer Wayne Swan, and a promising lad designated as Swan’s deputy chief of staff and principal adviser.
A news outlet intending to reassure its audience today that Australia’s economy is in good hands might note that should another downturn loom, all those wise counsellors are still on hand. That young adviser back then is Treasurer now — Jim Chalmers.
Actually, he could trim the debt by flogging off ABC News to Rupert Murdoch, who seems to be controlling it already.
Keep the footy department, though. They do a great job.
Alan Austin is an Independent Australia columnist and freelance journalist. You can follow him on Twitter @alanaustin001.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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