The mainstream media – including the ABC – are in lock step with the Government in misreporting most economic developments. Alan Austin explains how.
WHAT IS happening in Australia’s economy is quite extraordinary. But most punters have no idea. Here is why.
The mainstream media – including the ABC – are in lock step with the Government in misreporting most economic developments.
Take this from ABC News on Monday:
‘Profit fall points to downside risk for economic growth: ABS data’
In fact, the opposite is true.
Two economies
It is clear now that Australia has two economies running separately. The regime for the rich investors, the top executives, the big corporations – and particularly the foreign mining and other predators – is booming.
This is evidenced by company profits, executive salaries and bonuses, shareholder dividends, export volumes, commodity prices, the value of the stock market – all these are up – and company tax revenue, which is down.
The majority of Australians, however, are struggling to make ends meet, with declining real incomes and ever-increasing expenses. Evidence for this is in the unemployment numbers, hours worked per person per month, wage levels, pensions and benefits, household debt and costs of living.
Profit fall points to downside risk for economic growth: ABS data #ausbiz https://t.co/LotJvQGrmD pic.twitter.com/f8NXaOXLtR
— ABC News (@abcnews) September 4, 2017
Record corporate profits
Monday’s release from the Australian Bureau of Statistics (ABS) showed gross company operating profits for the full financial year to June 2017 at an all-time high.
Highlights include:
- Mining profits up an impressive 59.8% over last year to $101.2 billion. That’s a new record, beating the previous best by nearly $8.5 billion.
- Profits in professional, scientific and technical services were up a whopping 49.5% to a record $16.3 billion.
- Financial and insurance services profits were $5.9 billion, up 46.9% on last year.
- Manufacturing continues its recovery with profits up 9.9% to $30.1 billion in the year to June. Although that quantum is below earlier highs, this is the fourth consecutive annual rise and the strongest.
- New all-time high profits were recorded in electricity, gas, water and waste, rental and real estate, transport, postal, and warehousing, and administrative and support services.
Gross profits for all sectors combined – the magic number – reached a record $304.9 billion. That is up an impressive 21.9% on 2015-16, the highest annual percentage increase since 2002.
Sneaky reporting tricks
There was a small decline in the June quarter (Q2, 2017) from the May quarter (Q1, 2017). But with May being an all-time high by a huge margin, this was expected.
So the headlines across the country should read "Australian companies enjoy record profits” or “Australia: Strong Q2 business indicators”.
Instead, we get this: 'Australia: Weak Q2 business indicators – Westpac'.
Huh? Yes, that is the headline in online finance journal FXStreet.
Australia: Weak Q2 business indicators - Westpac https://t.co/aCrFDpviH9 #Banks #Australia #EconomicIndicator
— FXStreet News (@FXstreetNews) September 4, 2017
It asserts that a
'Research Analyst at Westpac notes that Australia’s company profits shrunk by -4.5% in Q2, including mining -11.5%.'
The ruse here is simply to ignore the quarters with strong rises and report only the corrections.
The actual rises and falls for the last five quarters were:
- Q2 2016: up 10.5%
- Q3 2016: up 1.6%
- Q4 2016: up 18.1%
- Q1 2017: up 5.8%
- Q2 2017: down 4.5%
So, technically, they are not lying. They are simply ignoring the advances and reporting the retreats to convey the impression that business is doing it tough.
In fact, Q2, 2017 is a thumping $13.8 billion higher than Q2, 2016, up 21.2% over the year. It is also the second highest quarterly result ever recorded. But because it is marginally below Q1, 2017 – the highest ever – it is depicted as a poor outcome.
Monday’s ABS data shows both company profits and inventories – stockpiles of products to be sold – were down slightly for the quarter but up impressively over the full financial year. These are excellent signs for Wednesday’s highly-anticipated report on gross domestic product (GDP).
So a good headline might be: "Australia's latest GDP indicators highly positive".
Instead, we got this from influential online business website, Business Insider Australia: ‘Australia's latest GDP indicators were a little soft’.
But there was a bit of good news for workers.
— David Scutt (@Scutty) September 4, 2017
Australia's latest GDP indicators were a little soft (via @BIAUS) https://t.co/yudKpK3yxJ pic.twitter.com/L7FEzcAkHl
Again, the focus is on the short-term fluctuation downwards – from a record high the quarter before – rather than on the big picture.
ABC News and Current Affairs did the same. A fair headline given the strong annual result would have been: "Dramatic profit rise points to buoyant economic growth: ABS data".
Instead, they opted for: ‘Profit fall points to downside risk for economic growth: ABS data’.
Fortunately, the ABC did include the truth of the matter downpage:
‘CommSec's chief economist Craig James said the better reflection of the health of Australia's corporate sector was a 21 per cent increase in profits over the 2017 financial year to a record $304 billion. "Both mining and non-mining profits hit record highs," he wrote in a note.’
Yes. That is correct. So why imply the opposite in the heading?’
As has been shown here at IA and elsewhere, the Turnbull Government and its agencies, including ABC News and Current Affairs, routinely use these and other ruses to dupe the gullible.
Other sneaky tricks include:
- selective reporting of favourable outcomes only;
- using trend data from the ABS when it suits, then using seasonally adjusted numbers when they are more favourable;
- choosing an arbitrary benchmark or starting point to make recent changes look more impressive;
- ignoring the effects of natural population increase or the impact of inflation; and
- overlooking what is happening in the rest of the developed world.
how many jobs corporate tax cuts will deliver??? Turnbull could not guarantee one #auspol pic.twitter.com/isYx0esPnv
— muamatt (@mattmua72) April 3, 2017
Why are they doing this?
Naturally, the Turnbull Government and the corporations do not want the jobless to know they are being kept jobless or poor people to know they are being kept poor so the very rich can be given an ever-increasing slice of the pie.
By hammering home the message that indicators are “weak”, outcomes are “soft” and profits are “falling”, it is then acceptable for the rich minority to demand lower taxes, higher subsidies, lower wages and other transfers from the majority.
Such is Australia’s doom.
You can follow Alan Austin on Twitter @AlanAustin001.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
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