Fake News, an expression coined by Donald Trump, is now well and truly in the lexicon. The majority of this shameful phenomenon is to be found on Facebook and Twitter, if only by virtue of their sheer size. Both behemoths offer a free rein to propaganda from terrorists, child molesters, and sundry undesirables without any serious attempt at moderation. Read the excellent essay by the head of News Corp newspapers worldwide, Robert Thomson, an Australian.
Regrettably though, something approaching fake news is also to be found in the serious Australian press and on your ABC, especially in the coverage of economics. This week we were treated to an onslaught of beat-up stories quoting Deloitte Access Economics’ Chris Richardson as saying that Sydney house prices, at 30 per cent above their true value, were “dumb”. Australian households, he said, are potentially being crushed by the world’s second largest debt burden.
The stories all conveyed an atmosphere of a looming crisis, frightening home buyers and owners alike, and leading to a few buyers withdrawing from purchases. Knowing Chris Richardson as one of Australia’s leading economists, I sought context for these doom-laden remarks. I expected to see commentary from the ABC’s seldom-seen-or-heard business editor Ian Verrender or economics correspondent Stephen Long. Neither seems to have thought the story worthy of analysis.
I decided to listen to Richardson’s one-hour speech given at the National Press Club, and discovered that the featured scenario was only one of three – the other two being upbeat. Richardson also said that this is the year in which Australia becomes the first country to avoid recession for over 26 years and “2017 is a smell-the-roses year for the Australian economy”.
Curiously, I did not see that quote anywhere in the newspapers I read, or on your ABC. Nor did I see Richardson’s statement that he thought that a China slump – that would wreck our economy and housing market – was unlikely. He added that we should not be scared, but that we should be prepared. ”The fog of uncertainty lessens when you shine a light on it”, he said.
The whole thrust of Richardson’s message was similar to what we, at Australian Strategies, have been saying for months: the Canberra political class and their cronies need to wake up, stop playing games, and initiate real reform.
Richardson’s two optimistic scenarios – given only two sentences in the Australian Financial Review – assumed that half-asleep business would start investing for Australia’s future in Asia, as conceived in Julia Gillard’s Asian white paper, and that politicians would stop squabbling and get on with badly needed reform of the archaic tax system. He explained in simple terms to Australians why this is necessary.
Richardson said that, even if China suffered a fall in growth, it would come back, increase its wealth and individual prosperity, and seek Australia’s support. “The Chinese want cleaner air, better food, better health services, safer travel, and better care for the aged”, he said. He added that Australia has only just begun taking advantage of the opportunities the free trade agreement offers an that the opportunities are not just in China, but right across Asia, including India.
“We struggle to do things better in Canberra”, he said. ”Canberra is struggling to get the message across”.
Richardson also saw cybersecurity and digital business as a big area of growth, though not as great as the $800 billion he saw the Australian economy gaining from economic reform and properly connecting with Asia.
He concluded:”This is a moment when Australians should act with courage.”
You can listen to Richardson’s entire speech on ABC’s iView. It will be worth the time. It’s just a pity that the national broadcaster could not report it properly. The detailed Access Economics Report is available here.