Wednesday 23rd of October 2019

of greed, envy and inequality in the land of plenty... of debt, in a world of spin...

wealth

In a world of misinformation, spin and lies, good journalism is more vital than ever, and this week revealed just how important it remains for journalists to look past the spin and let the facts and data lead the way.

This week, my colleague Paul Karp broke a rather stunning story that when the Australian Bureau of Statistics released the two-year survey of household incomes and wealth in July it had changed references to wealth inequality in its media release in order to craft a “good media story”.

In effect the ABS media releases sought to downplay the reality of growing inequality.

Such a move saw it ignore the data in its own release and instead push an angle that was more in keeping with the government’s political agenda.

The government has long been seeking to downplay the issue of inequality. This week the finance minister, Mathias Cormann, told the Sydney Institute that “Labor in more recent years explicitly committed itself to the flawed socialist pursuit of equality of outcomes – falsely asserting that Australia had a major and growing inequality problem”.

Except, as the ABS survey showed, this is not a false assertion at all.

And yet despite the survey data showing there had been an increase in inequality, the headline of the media release was “Inequality stable since 2013–14”.

The media release did note that “the data published today also showed there was a marginal increase in wealth inequality in 2017–18 and that wealth continues to be less equally distributed between households than income amongst Australians”.

Basically the ABS was unable to keep to the spin throughout its own media release.

Unlike other government departments the ABS is actually independent – it needs to be to ensure the public believes the data is not being tainted by political hands.

There is no evidence at all this has occurred, and yet this smoothing of the message in the media release is not something that does the ABS any credit. The faith in institutions is under attack from all quarters – those institutions should not be giving their critics free kicks.

But the story also highlighted the importance of good journalism.

This survey was unusual in that, as it was a special release with a massive amount of data and nothing that can actually affect markets (given the figures relate to a survey from over a year ago), some journalists (including myself) were given an embargoed copy. This gave us time to write up stories that would give readers a good sense of what was contained in the data.

I must admit when the stories went up as soon as the embargo was lifted I was slightly surprised to see a few media outlets suggest that we are now apparently a nation of millionaires.

I had a bit of a cold chill run down my spine as I worried I had missed an obvious point, because at no stage when I was going through all the spreadsheets did a figure like that jump out at me.

And then I realised why this was the lead – the ABS had also put out another media release – with its own headline: “Average household wealth tops $1 million”.

So I guess it was not surprising that the Australian reported that “Australia a nation of millionaires for the first time in history”, or the AFR went with “Aussie householders are millionaires, on average”. The West Australian ran with “Australian household wealth cracks $1m mark for first time”, stating that “you certainly might not feel like one, you may not even think you know one and you can’t believe it’s possible among all the economic doom and gloom, but the statistics don’t lie – for the first time, Australia is a nation of millionaires”.

Well statistics might not lie but they can be misleading.

When I was looking at the figures in the spreadsheets I didn’t bother with the $1m average figure because it was rather meaningless. The same table that showed the $1m average household wealth figure also showed that only the top 30% of households held this level of wealth, and the median household wealth was $558,900.

Now I might not be the greatest statistician in the world, but I don’t think 30% of households equals “a nation”.

Instead my own report opened with this: “The latest two-year survey of household incomes and wealth from the Australian Bureau of Statistics has revealed that over the past two years inequality has increased. The wealthiest 25% of Australians have increased their income by nearly double that of median income households, while the wealth holdings of the poorest 20% of households has actually declined.”

The reason is I had looked at the data and not bothered to even read the media releases.

I usually don’t read them. For me the data is the story and I am more than capable of finding it without a press officer trying to lead me to it.

Sometimes I’ll have a look after I have written my story just to check I have not missed an obvious point.

And this is where the good reporting comes to the fore.

In my opinion we actually have some excellent economics reporters in this country. We are a bit of a nerdy club – those few people in press rooms who like numbers and even know how to find our way around an Excel spreadsheet.


Read more:

https://www.theguardian.com/business/grogonomics/2019/sep/01/abss-shamef...

 

Image at top from MAD Magazine circa 1975 0r 76...

 

too much data is barely enough...

economies...

To paraphrase "Rampaging" Roy Slaven and H.G Nelson, who in turn paraphrased Mark Twain on whiskey, sometimes "too much data is barely enough".

This week in finance:
  • GDP growth for the June quarter (Wednesday) expected to show further deceleration
  • RBA expected to remain on hold at 1pc (Tuesday)
  • House price index for August likely to be on the rise again (Monday)
  • July's retail sales (Tuesday) likely to remain weak, while the trade balance (Thursday) should be a big surplus

 

This week the economic pointy heads will be swimming in a torrent of numbers, climaxing with Wednesday's release of the June quarter National Accounts.

After poor construction and investment figures last week, any hope of a reasonable GDP growth number is pinned on second quarter company profits (Monday) and Tuesday's net exports and government spending data.

Ahead of this week's GDP partials, the consensus view is economic growth of 0.5 per cent over the quarter, or 1.4 per cent over the year.

That would put economic growth in line with the GFC's trough of 1.4 per cent, recorded in the third quarter of 2009.

That's quite a step down from the already insipid 1.8 per cent in the previous quarter, and well below the RBA's forecast.

However, it might also be optimistic.

ANZ, not renowned as the gloomiest house on the street, can only come up with 0.2 per cent over the quarter, which would see annual growth dip to 1.1 per cent.

Putting to one side the fourth quarter of 2000, where GDP growth was hammered by the introduction of the GST, 1.1 per cent would be the lowest reading since the early 1990s...

 

Read more:

https://www.abc.net.au/news/2019-09-01/gdp-to-take-another-step-down-but...