Dumbing down the ABC and the future of journalism

There was a clear case of selective economic interpretation in Parliament last week, where the Prime Minister, Malcolm Turnbull, castigated the ABC’s senior economics editor, Emma Alberici, for her article ‘There’s no case for a corporate tax cut when one in five of Australia’s top companies don’t pay it’, claiming it was “one of the most confused and poorly researched articles I’ve seen on this topic on the ABC’s website”.

But was it really “confused”, and was it really as “poorly researched” as Turnbull claims? And why so much noise about one particular article, when so many economists and business journalists have been making the same claims in recent times?


The study and understanding of economics is similar to philosophy, where if you could manage to round up ten economists into a room to discuss one aspect of company tax policy, the result would be ten different interpretations and viewpoints and, unless the discussion was politely managed, blows would be exchanged and none of the ten would ever speak to each other again. Fortunately, public discourse usually not that uncivil in Australia.

I’ve lost count of the recent articles and papers that have been published expressing their doubts about the Government’s proposal to lower the company tax rate, at a cost to the budget of $65 billion over the next ten years, but there have many across the broad political spectrum, including from Michael West, Adam Creighton, Stephen Long, Ian Verrender, Greg Jericho, Chris Richardson, Peter Martin, Bernard Keane, and Saul Estlake. It doesn’t mean they’re necessarily correct, but there has been a range of supportive viewpoints. They’ve echoed the same sentiments as Alberici, but where were the howls of disapproval from the Prime Minister when those articles were published?

Would the Prime Minister have made the same protests if Alberici’s article had been written by a male economist?

And if the article by Alberici, as ABC management put it, “did not accord with our editorial standards for analysis content, and has been removed for further review”, why was it published in the first place?

I’ve checked the material in Alberici’s original article and all published key figures and material published are bona fide and accurate.

“Since the peak of the commodities boom in 2011–12, profit margins have risen to levels not seen since the early 2000s but wages growth has been slower than at any time since the 1960s.” This is certainly correct according to figures published by the Australian Bureau of Statistics, and there is no dispute from any economist. It’s hard to see why the government wanted this part removed.

“Five of Australia’s top companies has paid zero tax for the past three years”. Yes, this is also correct. Alberici did correctly point out the main reason these companies haven’t paid tax is because huge losses from previous years have been offset against future profits. In the case of Qantas, the loss of $2.8 billion it recorded in the 2013/14 financial year is still being offset. One point that has been overlooked here is if the company tax rate is reduced, Qantas will continue to pay no tax for a longer period of time.

There isn’t necessarily a correlation between company tax rates and business investment. Yes, this is also correct, and Alberici correctly pointed out Australia has a larger rate of business investment than Canada, which has a similar size and type of economy, even though Australia has a higher company tax rate.

“The headline 30 per cent rate is misleading”. Yes, this is correct. Australia’s average company tax rate is 17 per cent, far lower than the US average rate of 29 per cent. The effective company tax rate on pre-tax profits is 10.4 per cent, far lower than the US effective rate of 18.6 per cent.

“Can Australia afford to spend $65 billion?” I guess this is the moot point. The issue Alberici failed to point out was the $65 billion will be spread out over ten years, and she made no reference to this. She also mentioned debt (without specifying she’s referring to national government debt) is “more than $600 billion”, but the only reference I could find to this figure is the Australian Debt Clock, which shows a figure of $613 billion. It’s not accurate but nor is anything else at this stage, until Treasury releases actual figures.

After receiving complaints from Turnbull, Treasurer Scott Morrison, and Minister for Communications, Mitch Fifield, the ABC removed the article, edited it, and removed the parts that were considered offensive to the government, and replaced it with a completely watered-down version, which can be viewed online at ‘Why many big companies don’t pay corporate tax’.

In this amended article, there is no mention at all about the lack of correlation between high profit margins and low wages growth. There is also no mention of the lack of correlation between company rates and business investment, nor is there any mention of headline company tax rates, or the query about whether Australia can afford to spend $65 billion on the reduction of company tax rates.

ABC management has done its best to spin doctor the intervention in this case, stating: “the analysis piece did not accord with our editorial standards for analysis content, and has been removed for further review” and “any suggestion the ABC is responding to outside pressure over these stories is incorrect” … “they have been subject to the normal ABC editorial processes”. It’s almost like Alice in Wonderland.

But it has failed to point out how Alberici’s piece didn’t accord with “editorial standards” and, if it did fail these standards, why it was approved to go online in the first instance. And ABC management is having great difficulty convincing the Australian public that the article wasn’t removed and amended because of intervention from the Government. Every point in Alberici’s that has been removed is, conveniently, a point the Government is trying to win politically as part of its plan to reduce the company tax rate. Very convenient.

Would it not have been better for the ABC to publish an alternative piece to counter the arguments in Alberici’s original piece, perhaps from its new-found friends at the Institute of Public Affairs, or News Limited?

Why was there no outrage when Ian Verrender published ‘Who really wins in the murky world of corporate tax cuts?’ in October 2017?  Or when Richard Denniss published ‘Company tax cut will not boost economic growth’ in April 2017? Or when Stephen Long published ‘The strange modelling used to sell company tax cuts’ in June 2016?

And in a classic example of double standards, the ABC failed to remove or amend articles by Chris Uhlmann in September 2016 ‘SA storms: Rushing to renewable energy targets puts sector’s reputation at risk’  and October 2016, ‘South Australian blackout: When the lights go out, it’s a sign the electricity grid isn’t working well’, despite many complaints and outrage from the public. The articles misrepresented the cause of the blackouts in South Australia, and neatly dovetailed into the political agenda of the Government at the time: to downplay the role of renewable and alternative energies, and attack a state Labor government due to face an election within 18 months.

There were no howls of protest from anyone in the Government at the time, nor was there any reference to “editorial standards”, nor any moves to subject the piece to the “normal ABC editorial processes”. So why has the ABC allowed itself to become so politicised, and why did the ABC cower when it came to political pressure from the Prime Minister’s office?

The first task of editors and management with a grain of credibility is to defend its journalists and stand by the stories that it publishes, but with ABC management, they’ve ‘covered their own arses’, failed to stand on their independence, and thrown Alberici under a bus.

There’s only one thing worse than cowardly journalism and reporting, and that’s an editorial management team that fails to stand for anything, except for supporting the government of the day, and rolling over at the first opportunity.

The unfortunate future of ABC journalism.

In recent days, the ABC has published the totally banal ‘The surprisingly frugal habits of the super rich’, a short piece on how the likes of Gerry Harvey, Naomi Simon, Dick Smith, Elle Macpherson and Janine Allis save money, filled with gratuitous platitudes about the spending habits of these rich and famous people. It’s well suited to a Grade 4 primary school class, but an adult audience? And this was soon after ABC Managing Director, Michelle Guthrie, tried to convince a national audience at the first Annual Public Meeting the ABC was not going through a process of “dumbing down”.

It seems this is now the direction of political and economic commentary the ABC prefers, the mundane and circus act, rather than the hard-hitting interrogative and investigative journalism that questions government actions and policies.

Historically, we’ve always laughed at the banana republics of Central America and tin-pot regimes of South-East Asia, but now the joke is on us. We have a Government that has no qualms about intervening and editing information to suit its political agenda but, worst of all, we have a team of public broadcasters that fail to publish in the interests of the public. It’s a sad day for journalism.

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