Economics of Left media unbalanced on stimulus savings, post-COVID-19 debt

ABC journalists have led calls for ever more work shutdowns, continued school closures and higher welfare payments, writes Chris Mitchell. Picture: AAP

Many modern journalists seem unable to understand economics in a media environment dominated by victim advocacy and news with which partisan consumers can agree.

The ABC started the COVID-19 pandemic giving free rein to health reporter Dr Norman Swan and his regular “Coronacasts”. He claimed on Q&A in March that Australia was only two weeks behind Italy on the infection curve. Since then ABC journalists have led calls for ever more work shutdowns, continued school closures and higher welfare payments, all from the security of their government-funded jobs.

Many at the ABC seem to support state premiers who want to keep their borders shut. Most seem to agree the $60bn saving ­revealed by Treasurer Josh Frydenberg last Friday week on the government’s JobKeeper program is a windfall that should be spent on payments to artists, short-term casuals and foreign workers. There’s not much ABC advocacy for economic recovery, new jobs and the growth to drive them.

Conservative commentators have pointed to the danger of blindly accepting computer modelling that has been wrong about both the spread of the virus, the number of deaths and now the number of people who would lose jobs. Many have suggested this should highlight the risks of relying on computer models to justify action on climate change.

An anomaly in left media attitudes to the future has gone unnoticed. The ABC view on climate is unequivocal: Australia owes it to future generations to cut greenhouse gases now. Why no concern about leaving those future generations hundreds of billions of dollars in debt from government stimulus? The JobKeeper error is a blunder by Treasury and the Australian Taxation Office. But journalists should not run the lines of the ALP calling it the biggest budget mistake in history. JobKeeper has never appeared in any budget, and when it does in October, the number will be correct.

News Corp’s Terry McCrann last Wednesday provided an accurate, and scathing, assessment of the scale of the mistake. But Frydenberg, a new Treasurer, could not have picked up the error if his Treasury secretary and the Australian Taxation Office did not. Labor Treasury spokesman Jim Chalmers missed it too.

But why have so few journalists been able to see what this paper’s Paul Kelly and The Australian ­Financial Review’s Phil Coorey saw as soon as the blowout was revealed? This is an error to the positive side of the ledger and far better than a $60bn overspend.

Patricia Karvelas on RN Drive and ABC 24 television, interviewing Frydenberg last Friday week, hyperventilated at news 3.5 million were on JobKeeper rather than 6.5 million. Karvelas wanted to know why Frydenberg would not now spend some of that $60bn on “the people who were excluded” from JobKeeper or channel the unspent money into an ­increase in Newstart.

On Monday morning on RN Fran Kelly took a similarly hostile approach to Finance Minister Mathias Cormann, who put paid to the furphy about workers in the entertainment industry. They were not, he insisted, barred from receiving payments if they met the criteria.

Insiders last Sunday week brought a bit more balance to the issue. Channel 7 political editor Mark Riley acknowledged it was a plus that the $60bn would not now need to be borrowed. The ABC’s Annabel Crabb and host David Speers talked about the biggest flaw in JobKeeper: that many casuals only working a day a week were now receiving $1500 a fortnight, a bungle Speers said would need to be fixed.

Other left-wing commentators thought the $60bn should be spent. On Wednesday The Sydney Morning Herald’s Ross Gittins said that after “a sleepless night” worrying about the recession to come, the only solution was to spend the $60bn on stimulus. A strong advocate of action on climate change to save future generations, he has no qualms about saddling those generations with COVID-19 debt.

Prominent former Fairfax commentator Michael Pascoe, now with the trade union-owned The New Daily, wrote it was time for Morrison to take a reality check on his industrial relations reform ideas. On the JobKeeper shortfall, Pascoe wrote: “The government is trying to make a virtue now of not spending the money it knows it can afford on job creation programs beyond JobKeeper.” Sure, why look for IR productivity reforms and real jobs growth when we could just increase government debt?

Which brings us to ABC radio AM host Sabra Lane on Wednesday morning interviewing Morrison. She began by demanding the PM guarantee no worker would be worse off under his proposed IR reforms. Never mind there are no proposals; just the suggestion unions and employers might try to come up with some to help create jobs. And never mind Lane was trotting out the same tired trade union line that has been used for 15 years since John Howard’s WorkChoices to ensure Australia never again enjoys the productivity and employment benefits that kept it from recession for three decades after the Hawke government, former ACTU leader Bill Kelty and business reached the Accord in the late 1980s.

Journalistic independence should not mean lazy reporting. What are ABC managing director David Anderson and news boss Gaven Morris doing for their enormous salaries if they can’t insist journalists keep abreast of economic trends and think about the wider national interest rather than minority victimhood?

Morrison has done well on the health front. Announcing his first and second stimulus packages he used a word his spin doctors seem to have forgotten: his economic response needed to be “scaleable”.

Indeed. The underspend now gives Morrison scope to look at tapering assistance for specific industries, especially tourism and aviation, after JobKeeper finishes in September.

This is what Labor should be talking about rather than actors and musicians. As if to emphasise the point Reserve Bank governor Philip Lowe told parliament’s COVID-19 inquiry on Thursday that it was “entirely possible” the economy would do better than first expected, just as the health outcomes had been better.

Journalists need to re-examine the facts of the pandemic. They might start by admitting the US has done much better than western Europe. The US has six times the population of the UK but only 2½ times the death rate. Deaths per million in the US last Thursday stood at 309, compared with 808 in Belgium, 580 in Spain, 552 in the UK, 547 in Italy, 438 in France, 418 in Sweden and 343 in Holland. Why the media focus on President Donald Trump?

Around the world each year a bad flu season kills 600,000 people, mostly the elderly. Many die of pneumonia. From the start of the last northern winter to the start of this southern winter 340,000 have died globally of COVID-19, mostly the elderly and many of pneumonia.