This election is one of the worst I've seen

How are you going with the election? Are you getting a lot out of the debate, seeing the big issues canvassed and making up your mind who’ll win your vote?

It’s not as if the choice isn’t clear: do you want to wait 15 months for a permanent tax cut of $5 a week, rising to $10 a week a year later, or would you be eligible for a $1200 once-only tax cut in July 2026, plus an immediate one-year cut of 25c a litre in the price of petrol?

If that’s not enough to seduce you, there’s more. Anthony Albanese will cut the price of draught beer by 5¢ a glass for two years or, for small businesses, Peter Dutton will make entertainment expenses tax-deductible (conditions apply).

But you may want to judge it on the character of the leaders. Again, the choice is clear: do you want the controlled, experienced hand of Albanese, who’ll never do anything rash, whose goals are modest and whose motto is “steady but slow”? Got a problem? He’ll think about it. If you want a prime minister who’s on everyone’s side, Albo’s your man.

Or do you want tough cop Dutton on the beat, always quick on the draw and ready to protect us from the threatening world we live in? He’s heard of a supermarket worker who’d had a machete held to her throat. That won’t happen to you on Dutto’s watch.

And it’s not as if the campaign so far hasn’t been action packed. We’ve had Albanese falling off the platform at an election rally, then denying it. We’ve had Dutton joining a kids’ football game and hitting a cameraman in the forehead.

What would a campaign be without seeing pollies in safety helmets and high-vis vests on TV every night? Or at a childcare centre, showing how human they are and what good fathers they must be whenever they can make it home?

What’s new this time is Greens leader Adam Bandt taking a big red toothbrush with him to TV interviews (must have some meaning I’m missing) or his colleague waving round a bleeding headless salmon in the Senate.

What’s that? You don’t think much of the election campaign? It’s been neither interesting nor edifying, and hasn’t got to grips with the big issues?

Well, I agree. I think both sides are treating us like mugs. Maybe like the mugs many of us have allowed ourselves to become.

In my 51 years as a journalist, this is the 20th federal election campaign I’ve observed at close quarters, and I’m convinced they’re getting worse: more contrived, manipulative, transactional and misleading, and less focused on the various serious problems facing us, which are far greater than they used to be, and now include America’s abdication from leadership of the free world.

In short, election campaigns have become dishonest, aimed at tricking us into voting for one side rather than the other, using trinkets to distract us from the bigger issues that neither side has thought much about nor has any great desire to tackle.

I know that’s easy to say for an oldie like me (77, since you were too polite to ask). “It was much better in my day.” But though things weren’t great in the old days – we’ve never been a paragon of Socratic debate – I think they’ve got worse over the years, and I’ll try to show how they’ve got worse and explain why.

But I must say this: even if things in Australia have got worse, they’re not as bad as they are in many other countries, particularly the US. Nor are they ever likely to be.

Three things protect us from other countries’ decline. First, compulsory voting, which forces everyone to register a choice and pay at least some degree of attention. Second, preferential voting ensures the person who wins is the one most of us prefer.

And third, an independent electoral commission which regularly increases the number of electorates and redraws boundaries to ensure there’s roughly the same number of voters in each, and these have boundaries that aren’t gerrymandered to give one side or the other a built-in advantage.

This is in marked contrast to the US, where each state government determines its own federal voting arrangements. Their gerrymandering ensures they have very few marginal electorates, whereas we have a lot. And we don’t have voting arrangements designed to disadvantage certain classes of voters, such as racial minorities.

So we shouldn’t complain too much. Even so, our election campaigns have changed over the years, and not for the better.

They’ve changed because the voters have changed – Gen Z seems a lot less interested in conventional politics than we Baby Boomers were at their age, when there was so much disapproval of Australia’s part in the Vietnam War, and so many young men (including me) hoping not to be conscripted.

Another important source of change is technological advance, particularly the effect of the information revolution, which has armed the parties with greater knowledge of voters’ views, and changed the media by which politicians reach out to voters.

Finally, the political class’s changing aspirations have affected the way campaigns are run. In the olden days – even before my time – politicians used to travel round, visiting key electorates and talking to voters. They’d do this at evening public meetings or, during the day, from the back of a truck in the main street.

But the advent of television changed all that. While local politicians and their supporters may canvas their electorates door to door, most contact between the party leaders and the voters occurs via TV.

These days, leaders still visit marginal seats around the country, but what they do during the day is aimed at producing the colour and movement that will get them a spot on the evening TV news – hence helmets and high-vis.

They’ve worked up a list of promises to announce, and they (and their media entourage) go somewhere vaguely relevant to deliver the announcement. Guess where they go to announce a change in childcare?

A big advantage of this is that their busy day ends late afternoon, once the TV news camerapeople have got what they need for this evening. Then the leaders can go to a fundraiser, appear on a current affairs program, or get an early night.

Trouble is, though the pollies haven’t changed their routine, the evening TV news bulletin isn’t nearly as universal as it was. When there were only four channels, all airing their news at the same time, if you wanted to watch telly while you had dinner, you couldn’t avoid the nightly news bulletin.

Now the proliferation of TV choices makes it much easier to avoid the news, which many do. The parties have started using social media to spread their messages, but this makes it harder for the rest of us to see what they’re up to.

As the proportion of people who don’t follow the news – and aren’t much interested in politics – has grown, the parties have had to reach them via advertising. They now spend a fortune on TV ads, with far fewer ads in print and on radio. My theory is that, for the many people who don’t follow politics but know they’ll have to vote, they do their last-minute homework by remembering the TV ads they’ve seen.

But advertising works by appealing to our emotions, not our brains. Don’t explain the details, just make me feel nice – or angry. The parties know negative ads – attacks on their opponents – work better than positive ones (“you’re gonna love my policies”), which is hardly a boon to the democratic process.

This is what has made fear campaigns – misleading people about how badly they’d be affected by the other side’s planned changes – so fearfully effective. And the increasing resort to fearmongering is a major way by which election campaigns have become less informative and more misleading.

So it’s not just the way the mechanics of campaigning have changed. More importantly, it’s the way what’s said has changed, and the way the politicians’ objectives and behaviour have changed.

Politics has become more professional. In former times, politicians tended to be men (yes, almost all of them men) who turned to politics after a career as a lawyer, businessman or union official. They’d wearied of making money and decided to spend the last part of their working life fighting for a cause.

I’m sure personal ambition has always been a big motivation for getting into politics, but in those days, it came mixed with a strong desire to make the world a better place. These days, politics has become a career path you follow for most of your working life.

When young people are interested in politics and would like to make a career of it, they get started as soon as they leave university, taking a job working for a union, or in a minister or opposition minister’s office. The number of people working in ministers’ offices has grown considerably during my time in journalism.

It started in the Labor Party, but then the Liberals joined in. You work your way up the ladder, first aiming for preselection as a parliamentary candidate. Once you’ve made it into parliament, you work towards a job as a minister or shadow minister, then see how far you can make it towards the very top.

Such a career path teaches you a lot about how the political game is played, but not much about how government policies work best in the interests of the public. It tends to replace any initial idealism with pragmatism and cynicism. It tends to feed ambition.

These days it’s rare for politicians to enter politics later in life. Two exceptions were the Liberals’ Dr John Hewson and Malcolm Turnbull. Both were hugely intelligent, and both cared about good policy, but both had trouble playing the political game at the professional level and didn’t survive at the top. Labor’s exception was Bob Hawke. His great success at the top came from all the politics he’d learnt while rising to the top of the union movement.

So when the barroom experts assert that most politicians care more about their personal advancement than about doing good things for the nation, I’m inclined to agree. As someone famous once said, “by their fruits ye shall know them”.

The professionalisation of politics is a main reason that what’s said and done in election campaigns has changed, but another reason is that politics has become more scientific. In former days, politics was played by ear. Pollies decided what voters liked and didn’t like from what the voters they met said to them, then used their own intuition to fill in the gaps.

These days, the parties spend a lot of money conducting private polling, not just of how people intend to vote, but what issues are more important to them at present. They also use carefully selected focus groups to get ordinary voters expressing their views on particular issues.

When someone says something and everyone round the table says “yes, that’s right”, the professionals running the group take note and pass it on to the pollies for them to use. Or it can work the other way: the pollies and their people think of lines to help sell a policy measure, and they’re tried out on appropriately chosen focus groups. What goes over well gets used in public utterances.

Between the careerism and the carefully gathered knowledge of what voters think, election campaigns have become more contrived. We’re transported to a fantasy land, where everything is nice and nothing is nasty (except the bad guys on the other side).

The pollies never try to tell a voter something they don’t want to hear. They never tell a voter they’re wrong about anything, and seem to go along with anything you may say, no matter how silly.

Have you noticed the way politicians expect us to be – and encourage us to be – completely selfish? It simplifies their job. They tell us what they can do for us and our families, never what we should be agreeing to in the interests of the country.

And the more they talk about doing this little thing or that little thing for us – the more they make following elections good preparation for a trivia quiz – the more they avoid having to talk about a host of big but controversial issues: climate change, the environment versus jobs, AUKUS, school funding, online gambling and even uninsurable homes. Of course, I couldn’t swear the media had played no part in dumbing-down election campaigns.

The pollies always tell us about the various nice things they plan to do to make our lives better, and never tell us of the not-nice things they’ll have to do to improve our lives. In election campaigns, every player wins a prize.

Not so long ago, a big part of elections was pollies being pressed to tell us exactly how much their promises would cost and exactly how they’d be paid for.

But doing that is what caused Labor’s Bill Shorten to lose the 2019 election he was expected to win. He had some expensive promises, but spelt out some small tax changes that would cover their cost.

These changes had been carefully selected to hit only some well-off people who could afford the loss, but the Libs ran a scare campaign telling ordinary punters they’d be hit and, with the effect magnified by a lot of yellow and black ads paid for by some fat Queenslander, Shorten lost enough votes to cost him the election.

The trouble here is that politicians on both sides have broken so many promises and said and done so many tricky things for so long that many voters have concluded they are all liars. This is why so many people have stopped listening to them.

But there’s one exception. The only thing a politician says that the doubters are prepared to believe is that their opponents are not to be trusted because they’re out to get you. “Ah yes, ain’t that the truth.”

That’s why scare campaigns have become the currency of election campaigning, with stultifying effect.

And that’s why the 2019 election has made elections and their campaigns much worse than they were. Under Albanese, Labor vowed never to be caught like that again. He made himself a “small target” at the 2022 election, promising to do very little, and not to do many things: introduce new taxes, increase existing taxes, and cancel or change the already legislated stage 3 tax cuts.

Apart from the latter, he’s kept those promises. He’s been a small-target prime minister, doing as little as possible to tackle our many problems, which is why so many of us are so uninspired by his performance. It’s far too risk-averse.

A leader who’s not game to do anything unpopular – such as putting up taxes – is a leader who’ll never make much progress solving our deeper problems, like giving our youngsters a fair shake, and never improve the future they profess to care about so much.

Trouble is, under our two-party system, when one side takes a position, the other side almost always copies it. We get less choice, not more. So when Albanese decides it’s safest to stay small target, Dutton stays small target.

When ditto Dutto keeps changing his policies mid-campaign, we’re watching him learning on the job not to be daring, not to fix things and, above all, to be only superficially different from the other side.

The big change since the 2019 election is that neither side will ever have the courage to propose any kind of tax change that would have some people paying a bit more – even those who could easily afford it. The tiniest possibility of an increase for some, and the fearmongers on the other side will soon have taxpayers throughout the land shaking in their boots.

This has taken the election-campaign fantasy land to a whole new level of unreality. The laws of economics have been suspended for the duration of the campaign. Government spending can only ever go up, while taxation can only ever go down. The budget deficit is presumed to be unaffected, covered by a sign saying Don’t You Worry About That.

Surely you remember the days when campaigns devoted much attention to “what do your promises cost and how will you pay for them?” That’s what tripped up Labor in 2019 and, I confidently predict, Dutton won’t let trip him up now.

Some worthy souls in the media keep lists of what the promises have cost and demand a detailed account of how that cost will be covered, but the two sides just brush them aside. They’re in tacit agreement not play that game any more. In truth, both sides will add to deficit and debt.

The other way to look at all this is that, by their poor behaviour – government by scare campaign – the two sides of politics have fought to a standstill. Neither side is game to do anything about any of our big problems for fear of the lies this would allow the other side to say about them. Now, I know what you’re thinking: “OK, Ross, if you’re so smart, what’s the solution to the mess election campaigns have got into?”

The good news is, the nation’s voters are already working on the solution. So many people have lost faith in the two sides of politics that the proportion of people voting for the two majors is the lowest it’s ever been.

In the 2022 election, the share of first-preference votes going to the minor parties and independents rose to almost a third, with the remaining two-thirds shared roughly equally between Labor and the Coalition. We saw the Libs losing seats to the teal independents, and the Greens winning more seats in the lower house.

I’m confident the minor parties’ share of the vote will go higher in this election. The experts are pretty sure that, whichever major gets more seats, it will be in minority government, needing the support of enough minors and independents to convince the governor-general it could govern effectively.

Both major parties would like us to believe minority government would mean chaos and no agreement on anything. Don’t be fooled. As we saw with Julia Gillard’s minority Labor government in 2010, the government was stable and passed more legislation than usual.

What changed was that, to get that support and stability, Labor had to agree to put through controversial measures it wouldn’t have been game to propose by itself. Such as? The carbon tax. Minority government transfers some power to the parties and independents who still believe we need real, controversial policy changes to solve our problems and improve our future.

So if you don’t like what the two major parties have done to campaigns and timidity in government, you should share my hope that this election puts neither major party back in majority government.

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How the budget was hijacked by a $300 cherry on the top

Talk about small things amusing small minds. It looked like a textbook-perfect exercise in budget media management by Anthony Albanese’s spin doctors. Until it blew up in the boss’s face. Trouble is, it wasn’t just the tabloid minds that got side-tracked. So did the supposed financial experts.

Budget nights are highly stage-managed affairs, as the spinners ensure all the mainstream media are focused on the bit the boss has decided will get the budget a favourable initial reception.

You pre-announce – or “drop” to a compliant journo – almost all the budget’s measures, big or small, nice or nasty. This time they even revealed the exact size of the old year’s surplus. But you hold back one juicy morsel, knowing the media’s obsession with what’s “old” and what’s “new” will guarantee it leads every home page.

I call it the cherry on the top. And this time it was the $300 energy rebate going to all households. A prize for everyone (except the pensioners, who last year got $500) and proof positive that Jim Chalmers feels their cost-of-living pain. (It would have been much better to announce the rejig of the stage 3 tax cuts, of course, but Albo had to play that card early, to help with a dicey byelection.)

How were the spinners to know the punters would be incensed when they realised it would even be going to Gina Rinehart? And get this: if a billionaire owned, say, 10 investment properties, they’d be getting 11 lots of $300. Outrageous.

The way some tabloids tell it, the punters were so offended they were rioting in the streets, demanding Chalmers stick their $300 up his jumper. It was the Beatles returning their MBEs.

Why wasn’t the rebate means tested? Perfectly good reason: because that would have been more trouble and expense than it was worth. Don’t bother mentioning: because, apart from being a popular giveaway, the rebate’s other purpose was to help reduce the consumer price index by 0.5 of a percentage point, and means testing it would have reduced the reduction.

How so many shock jocks and journos could get so steamed up about such a small thing is hard to explain. But what’s much harder to explain is why so many otherwise sensible economists got so steamed up about the wickedness and counterproductive wrongheadedness of it.

I think it’s a perfectly sensible device to hasten progress in getting inflation down to the target zone, and by no means the first time governments have used it. The temporary energy rebate will cost $3.5 billion over two years and the continuing increase in the Commonwealth rent allowance for people on social security will cost $880 million over its first two years.

So while it’s true that increased government spending adds to inflationary pressure, to argue furiously about $4.4 billion in an economy worth $2.7 trillion a year shows the lack of something the late great econocrat Aussie Holmes said every economist needed: “a sense of the relative magnitudes”. It’s chicken feed.

But the financial experts’ righteous indignation about what they see as an inflationary attempt to fudge the inflation figures seemed to utterly distort their evaluation of the budget and its effect on the macroeconomy.

The budget was a “short-term shameless vote-buying exercise” in which Labor abandoned all pretence of fiscal responsibility and went on a massive spending spree. The budget’s return to surplus had been abandoned, leaving us with deficits as far as the eye could see. We now had a permanent “structural deficit”. The hyperbole flowed like wine.

It’s true that the policy decisions announced in the budget are expected to add $24 billion to budget deficits over the next four years. But if, as the financial experts assert, getting inflation down ASAP is the only thing we should be worrying about, then it’s really what’s added in the coming year that matters most. Which reduces the size of Chalmers’ crimes to less than $10 billion.

It’s true, too, that the expected change in the budget balance from a $9 billion surplus in the financial year just ending, to a deficit of $28 billion in the coming year, is a turnaround of more than $37 billion. Clearly, and despite Chalmers’ denials, this changes the “stance” of fiscal policy from restrictive to expansionary.

But the financial experts seem to have concluded this development can be explained only by a massive blowout in government spending. Wrong. It’s mainly explained by the $23-billion-a-year cost of the stage 3 tax cuts.

Perhaps they were misled by the budget’s Table of Truth (budget statement 3, page 87) which, like everything in economics, has its limitations. The tax cuts don’t rate a mention. Why not? Because they’ve been government policy since 2018, and so have been hidden deep in the budget’s “forward estimates” for six years.

But whatever its main cause, surely this shift to expansionary fiscal policy puts the kybosh on getting inflation back down to the target range? Well, it would if shifts in the stance of the macroeconomic policy instruments were capable of turning the economy on a sixpence.

Unfortunately, the first rule of using interest rates to slow down or speed up the economy is that this “monetary policy” works with a “long and variable lag”.

The financial experts seem to have forgotten that managing the strength of demand – and fixing inflation without crashing the economy – is all about getting your timing right.

So is predicting the consequences of a policy change. Two years of highly restrictive monetary and fiscal policies won’t be instantly reversed by a switch to expansionary fiscal policy. As the new boss of the Grattan Institute, Aruna Sathanapally, has wisely noted, at the heart of the budget is the sad truth that the economy is weak, which is one reason inflation will fall.

The inflation rate peaked at just under 8 per cent at the end of 2022. By March this year it had fallen to 3.6 per cent. To me, that’s not a million miles from the Reserve Bank’s target range of 2 per cent to 3 per cent.

But the financial experts seem to have convinced themselves there’s a lot of heavy lifting to go. They even quote one brave soul saying the Reserve will need two more rate rises. I think it’s more likely we’ll get down to the target in the coming financial year, and that the move to expansionary fiscal policy will prove well-timed to help reverse engines and ensure the Reserve achieves its promised soft landing.

Chalmers’ decision to use the $300 rebate to reduce the consumer price index directly by 0.5 of a percentage point adds to my confidence. It’s particularly sensible if, as the financial experts have convinced themselves, the inflation rate’s fall is now “sticky”.

Those dismissing this decline as merely “technical” display their ignorance of how wages and prices are set outside the pages of a textbook. To everyone but economists, the CPI is the inflation rate. It’s built into many commercial contracts and budget measures.

It’s a safe bet this device will cause the Fair Work Commission’s annual increase in minimum award wage rates – affecting the bottom quarter of the workforce – to be about 0.5 of a percentage point lower than otherwise. And do you really think employers won’t take the opportunity to reduce wage rises accordingly? I doubt they’re that generous.

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My speech at Sydney University's Great Hall

I’m too old to suffer from impostor syndrome, but the thought has occurred to me that, had the University of Sydney’s officials taken a look at my academic transcript at Newcastle University, and seen how much trouble I had persuading that uni to give me a pass degree, we’d be holding this gathering down at Ralph’s cafe in the women’s gym.

The truth is that I had a lot of trouble passing a subject called economics, which I couldn’t make any sense of – perhaps because it didn’t interest me greatly. I failed a subject called international economics but, since it was the last subject I had to go, my lecturer was prevailed upon to give me a conceded pass.

So I have to tell you I’m a bit bemused by a university, of all institutions, making such a fuss about me and my job. I’ve spent much of my time urging the people I’ve helped to hire and train as economic journalists not to write like an academic. Keep it simple, I’d say. Don’t try to impress people with big words. Try to be understood, not to mystify. Now, obviously, that’s not the right advice to be giving an academic.

In my job, I’m paid to have an opinion on everything. And I’m paid to give free advice to everyone, from the prime minister down. And I’m now so much older than my boss I’m allowed to give him – and sometimes her – free advice. She or he, of course, is paid to pretend she greatly values that advice.

So while I’m here in this hallowed hall of learning, let me give the academics two bits of free advice. Some years ago, the federal government’s chief scientist paid good money to get one of those now-infamous four firms of accountants-turned-consultants to fudge up a dollar figure for the value of science to the economy. One of my proteges, filling in for me while I was on holidays, Gareth Hutchens, these days a columnist at the ABC, wrote a piece saying the chief scientist had to be kidding. Anyone who wasn’t smart enough to know that our material prosperity was built on technological advance, and that technological advance rested on a bed of pure science, wasn’t someone who’d be impressed by any magic number. Gareth was right, of course.

The point is, academics should never yield to intimidation by those who can see no further than immediate income. Academics must never be ashamed to proclaim their belief in the value of knowledge for its own sake. Knowledge doesn’t have to have a monetary value to be of value. Humans are an inquisitive species. We’d like to know whether the universe is expanding for no better reason than that we’d like to know. And thanks to the material prosperity science has brought us, we can afford to pay some scientist to find out for us.

My second bit of free advice is that universities should never be ashamed of their preoccupation with theory rather than practice. Every profession needs its theory. We develop theories to help us make some order, some meaning, out of the seeming chaos we see around us.

If you look at what I write about the economy, I think you’ll find I write about economic theory a lot more than other economic commentators do. Why? Because I think theory is important. Academic economists will complain that I’m often very critical of economic theory. Why? Because I think theory is important. The great sin in academic economics is to stop seeking the truth because you think you’ve already found it.

I want to talk now about the little-discussed paradox of the commercial news media. On one hand, most news outlets are in the business of selling their news to make a profit, just like all businesses. On the other, the commercial news media play a vital role in our democracy, informing citizens about the actions of governments and holding governments to account. We rarely think about this paradox, but the truth is, it was ever thus. We had newspapers before we had democracy.

Today we talk about public-interest journalism, but I like to think of it as the commercial media’s “higher purpose”. Making enough profit to keep our shareholders happy is the obvious part, but we must keep our eyes focused on the more important part, our self-appointed duty to ensure our readers are kept fully informed about all the things our governments are doing – and not doing.

There’s an old saying in journalism: news is anything somebody somewhere doesn’t want you to know about. Governments have a lot of things they do want the public to know about what they’re doing. And their spin doctors are always trying to induce the news media to help them get the good news out to the voters. Governments have a near monopoly on news about their own doings. When they want something known, they can just put out a press release. Or, maybe a better idea would be for me to leak it to you exclusively – provided you give it a lot of prominence, and provided you run it uncritically. Why would the media agree to such a restriction on their freedom to fully inform their readers? Because if I play along today, you might give me another leak tomorrow. And that will make me look a lot more successful than my competitors.

Small problem: what about the reader? Is this the way to keep them fully informed and ensure they’re never misinformed? What if I’m so busy trying to be the best at extracting from the government news the government wants our readers to know about that I neglect my duty to dig out all the news the government doesn’t want our readers to know about?

Now, let me be clear. In saying this critical stuff, I don’t want you thinking I’m having a go at my own masthead. I’m giving my free advice to all mastheads. The mastheads formerly known as Fairfax aren’t perfect. No one knows that better than I do. But there are other outlets that have strayed a lot further from perfection than we have. Naturally, I won’t name those other Australian news outlets.

The digital revolution has hugely changed the news media. Once I’m retired, I’ll give in to the thought that it was all much better in my day. But while my day is still the present day, I can see the things that are better than they were. These days, the mastheads our envious competitors like to dismiss as “the Nine newspapers” devote more resources to investigative journalism than we ever have. Maybe because of the digital world we now inhabit, generating your own news makes more commercial sense. What I’d add is that we need to make all our ordinary news more investigative. More questioning of all the messages some interest group or another wants us to pass on to our readers.

Another thing that’s better than it used to be – one close to my heart – is much greater emphasis on explanatory journalism. The internet has hugely increased the blizzard of news that we must fight our way through each day. Our readers don’t need more news, they need more help figuring out what on earth it all means. This, of course, is a big part of what I’ve always seen as my role.

With the advent of the internet, social media, the greater scope for the spread of misinformation and disinformation, and now AI, it’s easy see all this as a huge threat to what’s now called the MSM – the mainstream media, of which the SMH is a prime example. We live in a media world where people are finding it harder and harder to know whose news to believe. Who to trust.

What I want to say is that, for the mainstream media, and the quality end of the MSM, all the extra doubt and uncertainty about who to believe is playing into our hands. We are still more trusted by our customers than other, less reputable sources of information. Provided we retain our readers’ trust, work to regain what trust we have lost, and make retaining the trust of our readers our highest priority, I think we’ll survive – maybe even prosper – in a world teeming with misinformation.

We must never knowingly mislead our readers. We must see quickly correcting any errors we’ve made inadvertently, not as an admission of failure, but as badge of honour. Proof that we can be trusted. It means no more “I’m not sure it’s true, but it’s a great yarn and the punters will love it” stories. No more dubious stories published to oblige a powerful source – usually a government – and keep it supplying us with exclusives. It means telling our readers what they need to know, not what they want to hear. It means being a good read the hard way, not the easy way.

I’m confident that, if we get the trust right, enough money will follow. I’m hoping to stay around doing my bit for a few years yet.

This is an edited version of the speech Ross Gittins gave at the event honouring his 50th anniversary at The Sydney Morning Herald. Held in the Great Hall of the University of Sydney and staged in partnership with the Faculty of Arts and Social Sciences.

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Speech in the Great Hall of Sydney University

I’m too old to suffer from impostor syndrome, but the thought has occurred to me that, had the University of Sydney’s officials taken a look at my academic transcript at Newcastle University, and seen how much trouble I had persuading that uni to give me a pass degree, we’d be holding this gathering down at Ralph’s cafe in the women’s gym.

The truth is that I had a lot of trouble passing a subject called economics, which I couldn’t make any sense of – perhaps because it didn’t interest me greatly. I failed a subject called international economics but, since it was the last subject I had to go, my lecturer was prevailed upon to give me a conceded pass.

So I have to tell you I’m a bit bemused by a university, of all institutions, making such a fuss about me and my job. I’ve spent much of my time urging the people I’ve helped to hire and train as economic journalists not to write like an academic. Keep it simple, I’d say. Don’t try to impress people with big words. Try to be understood, not to mystify. Now, obviously, that’s not the right advice to be giving an academic.

In my job, I’m paid to have an opinion on everything. And I’m paid to give free advice to everyone, from the prime minister down. And I’m now so much older than my boss I’m allowed to give him – and sometimes her – free advice. She or he, of course, is paid to pretend she greatly values that advice.

So while I’m here in this hallowed hall of learning, let me give the academics two bits of free advice. Some years ago, the federal government’s chief scientist paid good money to get one of those now-infamous four firms of accountants-turned-consultants to fudge up a dollar figure for the value of science to the economy. 

One of my proteges, filling in for me while I was on holidays, Gareth Hutchens, these days a columnist at the ABC, wrote a piece saying the chief scientist had to be kidding. Anyone who wasn’t smart enough to know that our material prosperity was built on technological advance, and that technological advance rested on a bed of pure science, wasn’t someone who’d be impressed by any magic number. Gareth was right, of course.

The point is, academics should never yield to intimidation by those who can see no further than immediate income. Academics must never be ashamed to proclaim their belief in the value of knowledge for its own sake. Knowledge doesn’t have to have a monetary value to be of value. Humans are an inquisitive species. We’d like to know whether the universe is expanding for no better reason than that we’d like to know. And thanks to the material prosperity science has brought us, we can afford to pay some scientist to find out for us.

My second bit of free advice is that universities should never be ashamed of their preoccupation with theory rather than practice. Every profession needs its theory. We develop theories to help us make some order, some meaning, out of the seeming chaos we see around us.

If you look at what I write about the economy, I think you’ll find I write about economic theory a lot more than other economic commentators do. Why? Because I think theory is important. Academic economists will complain that I’m often very critical of economic theory. Why? Because I think theory is important. The great sin in academic economics is to stop seeking the truth because you think you’ve already found it.

I want to talk now about the little-discussed paradox of the commercial news media. On one hand, most news outlets are in the business of selling their news to make a profit, just like all businesses. On the other, the commercial news media play a vital role in our democracy, informing citizens about the actions of governments and holding governments to account. We rarely think about this paradox, but the truth is, it was ever thus. We had newspapers before we had democracy.

Today we talk about public-interest journalism, but I like to think of it as the commercial media’s “higher purpose”. Making enough profit to keep our shareholders happy is the obvious part, but we must keep our eyes focused on the more important part, our self-appointed duty to ensure our readers are kept fully informed about all the things our governments are doing – and not doing

There’s an old saying in journalism: news is anything somebody somewhere doesn’t want you to know about. Governments have a lot of things they do want the public to know about what they’re doing. And their spin doctors are always trying to induce the news media to help them get the good news out to the voters

Governments have a near monopoly on news about their own doings. When they want something known, they can just put out a press release. Or, maybe a better idea would be for me to leak it to you exclusively – provided you give it a lot of prominence, and provided you run it uncritically. Why would the media agree to such a restriction on their freedom to fully inform their readers? Because if I play along today, you might give me another leak tomorrow. And that will make me look a lot more successful than my competitors.

Small problem: what about the reader? Is this the way to keep them fully informed and ensure they’re never misinformed? What if I’m so busy trying to be the best at extracting from the government news the government wants our readers to know about that I neglect my duty to dig out all the news the government doesn’t want our readers to know about?

Now, let me be clear. In saying this critical stuff, I don’t want you thinking I’m having a go at my own masthead. I’m giving my free advice to all mastheads. The mastheads formerly known as Fairfax aren’t perfect. No one knows that better than I do. But there are other outlets that have strayed a lot further from perfection than we have. Naturally, I won’t name those other Australian news outlets.

The digital revolution has hugely changed the news media. Once I’m retired, I’ll give in to the thought that it was all much better in my day. But while my day is still the present day, I can see the things that are better than they were.

These days, the mastheads our envious competitors like to dismiss as “the Nine newspapers” devote more resources to investigative journalism than we ever have. Maybe because of the digital world we now inhabit, generating your own news makes more commercial sense. What I’d add is that we need to make all our ordinary news more investigative. More questioning of all the messages some interest group or another wants us to pass on to our readers.

Another thing that’s better than it used to be – one close to my heart – is much greater emphasis on explanatory journalism. The internet has hugely increased the blizzard of news that we must fight our way through each day. Our readers don’t need more news, they need more help figuring out what on earth it all means. This, of course, is a big part of what I’ve always seen as my role.

With the advent of the internet, social media, the greater scope for the spread of misinformation and disinformation, and now AI, it’s easy see all this as a huge threat to what’s now called the MSM – the mainstream media, of which the SMH is a prime example. We live in a media world where people are finding it harder and harder to know whose news to believe. Who to trust.

What I want to say is that, for the mainstream media, and the quality end of the MSM, all the extra doubt and uncertainty about who to believe is playing into our hands. We are still more trusted by our customers than other, less reputable sources of information. Provided we retain our readers’ trust, work to regain what trust we have lost, and make retaining the trust of our readers our highest priority, I think we’ll survive – maybe even prosper – in a world teeming with misinformation.

We must never knowingly mislead our readers. We must see quickly correcting any errors we’ve made inadvertently, not as an admission of failure, but as badge of honour. Proof that we can be trusted. It means no more “I’m not sure it’s true, but it’s a great yarn and the punters will love it” stories. No more dubious stories published to oblige a powerful source – usually a government – and keep it supplying us with exclusives. It means telling our readers what they need to know, not what they want to hear. It means being a good read the hard way, not the easy way.

I’m confident that, if we get the trust right, enough money will follow. I’m hoping to stay around doing my bit for a few years yet.

This is an edited version of the speech Ross Gittins gave at the event honouring his 50th anniversary at The Sydney Morning Herald. Held in the Great Hall of the University of Sydney and staged in partnership with the Faculty of Arts and Social Sciences.

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Fifty years ago, I found my dream job – and I’m not done yet

If a genie ever sprang from a bottle and offered me one wish, it would be to have a job as a columnist on the biggest and best newspaper in the country, The Sydney Morning Herald. If he offered me a second wish, it would be to have my columns also published in the country’s other great newspaper, The Age.

For the first seven years after I left school, I worked to achieve my dream of becoming a chartered accountant. Not any old accountant, a chartered accountant. Unfortunately, by the time I achieved that exalted qualification, I’d realised I didn’t enjoy being an accountant and wasn’t particularly good at it.

I had a premature midlife crisis at the age of 24 and, after some casting around, on February 7, 1974, found myself as an over-aged cadet journalist on the Herald.

It took me only a few weeks to realise I’d stumbled into the only job I’d ever want. One I was good at and found greatly interesting and rewarding. I’d dropped a lot of money to become a mere cadet, but that didn’t matter. I was the square peg that had fallen into a square hole.

I wasn’t much good as a reporter, but the old boys who ran the Herald had the wit to steer me towards the feature and column writing I was good at. After three years, and having written many unsigned editorials, I got my first column. A year later, I was made economics editor, and by 1983, I had the three columns a week that I’m still writing, on the same day and in the same section of the Herald, 40 years later.

That’s all you need to know to see why I’ve stayed in my job at the Herald for 50 years, ignoring the usual retirement age when it flashed past 11 years ago. I’ve never been able to think of another paper I’d prefer to work for or another job I’d prefer to have.

Editor of the Herald? I have a lot more fun than he or she does, with much less responsibility.

Doing it my way

Perhaps because I was older and starting a second career, or perhaps because my upbringing in that strange uniformed Protestant sect, the Salvos, had made me a bit of a loner, I decided to join Frank Sinatra and do it my way.

I wouldn’t try to impress my peers, or even the editor, but would write a column that better met what I thought the readers were looking for. Later, I realised this could be my moral compass: Serve the Reader.

Because nature had intended me to be a teacher, I decided that, while all the others were off chasing scoops, I’d concentrate on explaining to the reader what on earth it all meant. I’d try to figure out how the economy worked, and when I’d got something figured, I’d tell all.

Because economics has so much potential to be boring, I’d pull every trick I could to make it simple and readable. I’d write in the first person, in an easy, conversational style. I’d even put myself and my doings in the story.

Because the world gets ever-more complex, I’d try to ensure the young people we hired to write about the economy had some formal education in the topic. Then I’d teach ’em the tricks of the trade. I’ve had the privilege to mentor a couple of dozen of the Herald’s ablest recruits.

An unrecognisable economy

Over 50 years, I’ve written well over 5000 columns, and worked for 16 editors – one of whom lasted for about 24 hours. I’ve covered 50 federal budgets, 19 federal elections, and seen 11 prime ministers and 16 treasurers come and go, starting with Gough Whitlam and Frank Crean, Simon’s dad.

In that time, I’ve seen huge changes in the economy, in politics and economic policy, not to mention – which I will – changes at the Herald. One of the latter is that, these days, newspapers prefer to refer to themselves as “mastheads”, in recognition that far more of our readers do so on our website than on dead trees.

I want to recall some of those changes, so let’s start with the shape of the economy. If a Rip Van Winkle fell asleep in 1974 and woke in 2024, I doubt he’d recognise our economy.

Every economy is changing continuously, partly because our customs and practices change and partly because government economic policies change. But the greatest source of change is advances in technology, and the past 50 years have seen the spread of computers, a revolution in telecommunications and the birth of the internet.

When I was first in the workforce, everyone was paid weekly, in notes and coins stuffed into little brown envelopes. Any money you didn’t want to spend immediately had to be taken to your particular branch of your bank, with your deposit recorded by hand in a little passbook.

City workers would go out in their lunch hours to pay their utility bills in cash at the company’s office. Bills came in the mail, and you’d write a cheque and post it back. In 1974, the banks combined to introduce the first credit card, Bankcard.

You had to beg your bank to lend you less than you really needed to buy a home. Until the Whitlam government’s Trade Practices Act of 1974, it was legal for businesses to collude in setting the prices they charged, or agree to carve up the territory between them, limiting competition.

The prices of bread, eggs and petrol were set by the state government. You bought your electricity from a government monopoly. Annual inflation of consumer prices averaged 10 per cent in the 1970s and 8 per cent in the ’80s.

People stay a lot longer in the education system than they used to, and emerge with higher qualifications. This is related to the much bigger role that women now play in the paid workforce. More girls are staying longer in education, doing better than boys academically, and getting a growing share of the good jobs.

Over the past 50 years, the size of Australia’s workforce has far more than doubled, to well over 14 million, while the industry structure of the economy has changed greatly. In round figures, agriculture’s share of total employment has fallen from 7 per cent to 2 per cent. Despite successive resource booms, mining’s share has risen only from 1 per cent to 2 per cent.

Manufacturing’s share has fallen markedly from 22 per cent to 6 per cent. With construction’s share unchanged at about 9 per cent, that means the services sector’s share has jumped from 61 per cent to 81 per cent – something that has favoured the increased employment of women.

The huge decline in the proportion of workers needed to grow, dig up or manufacture goods is explained by continuous advance in labour-saving technology. But where have the many additional jobs in the services sector come from? They’re mainly in health and aged care, education, and professional, scientific and technical services.

My career at the Herald has seen many major changes in government policies, though most of these presumed “reforms” occurred long ago under the Hawke and Keating governments. First came the decision in December 1983 to allow the Australian dollar to float, then the deregulation of the banks and, later, many other industries.

The removal of the high import duties protecting our manufacturing industries was begun under Bob Hawke, but completed under John Howard. But this does less to explain the declining employment in manufacturing than many imagine. Automation and the rise of China should get more of the blame – or, for consumers, the credit.

The privatisation of government-owned businesses began under Hawke-Keating, but continued under Howard and state governments of both colours. The outsourcing of government-provided services, a much more debatable “reform”, continues to this day.

For many of my early years as a commentator, our centralised wage-fixing system delivered pay rises of the same percentage and on the same day to virtually every worker in the country. People like me wrote unceasingly about the evils of excessive wage rises.

At the time, I thought Keating’s move to wage bargaining at the enterprise level a big improvement. Now, having seen the way employers have used the less regulated system to chisel workers’ wages, I’m less sure about that.

Do you realise that in 1974, all capital gains and employee fringe benefits were untaxed? Keating’s reforms in 1985 changed that. And Howard’s introduction of the goods and services tax in 2000 gave us the same sensible indirect-tax system most other rich countries had long had.

We had spent a quarter of a century trembling at the thought of such a tax since it was first proposed in the Asprey report of 1975. Today, it’s no big deal.

Labor gets the credit for introducing our first universal healthcare system, and compulsory employee superannuation which, more than 30 years later, ensures most couples will live more comfortably in retirement than they would under just the age pension.

Palace revolutions and digital disruption

But now, a remembrance of a topic no other people still working on the Herald can say they lived through at close quarters: the many changes at this august organ.

I’ve hung around long enough to see all the palace revolutions that have progressively turned this 193-year-old paper from being owned by the two branches of the Fairfax family – each led by cousins, Sir Warwick and Sir Vincent – to now making up about a third of the Nine Entertainment media conglomerate.

I wasn’t here long before, at the urging of management, the ageing Sir Warwick was replaced as company chairman by his elder son, James. James was far less interventionist, allowing the editors of the various papers to make their own decisions and leading, I believe, to Fairfax’s Golden Age.

But the retirement of a powerful general manager soon saw the Herald’s new editor-in-chief, David Bowman – who’d done most to advance my career – deposed and replaced by the former managing editor of The Australian Financial Review and The National Times, Vic Carroll.

Urged on by the new chief editorial executive, Max Suich, Carroll set about belatedly dragging the Herald into the modern age. I hate to admit it, but the great transformation of Australia’s broadsheet newspapers was spurred by the advent in 1964 of Rupert Murdoch’s startlingly clean, good-looking and energetic national broadsheet, The Australian, when I was still a schoolboy. Under its great reforming editor Graham Perkin, The Age was the first quality paper to take up the challenge.

When I joined in 1974, and until Carroll began his changes in 1980, the Herald’s failure to move with the times was reflected in its declining circulation. It saw its mission as ensuring news was reported the way it always had been.

Its language was very formal and its reporting largely devoid of explanation, context, interpretation or emotion. I concluded that the chief subeditor saw his job as taking a story and draining all the colour out of it, to make it fit for publication.

Most news stories were anonymous, being “by a staff correspondent”. We were committed to being “a paper of record”, which meant keeping stories short so as to cram in as many as possible. This produced a paper that was black and white in both senses and visually messy. It simply failed to match the competition coming from radio and, particularly, television.

Carroll changed all that. While he was at it, he reformed me – more with kicks than pats on the head. He freed me from my self-imposed duty to ensure my economics fitted with the proprietors’ commitment to endorsing conservative governments before elections.

Since Carroll, my opinion really is my opinion. He was, without doubt, the best of all the editors I’ve worked for.

Not many years later, we were hit by ructions within the Fairfaxes, as Sir Warwick’s other son by a different marriage, Young Warwick, sought to avenge his father and please his mother by borrowing heavily to buy up all the company’s shares, paying far more than they were worth.

His new managers closed our afternoon paper, The Sun, and sold off whatever assets they could, but it was no use and by 1991 the company was in receivership.

The business continued to trade as normal, and remained profitable, but not sufficiently profitable to cover all the money Young Warwick had borrowed to buy it.

Kerry Packer’s plans to buy the business failed to eventuate – thanks to the machinations of some financier called Malcolm Turnbull – and the Canadian media baron Conrad Black ended up with a minority but controlling interest.

Keating wouldn’t allow a foreigner to increase his interest in the company, so Black eventually sold out. Like so many Australian companies, Fairfax’s ownership ended up being shared between a host of superannuation funds and other “institutional investors”, making it a plaything of the stock exchange.

All this, however, was nothing compared with the challenge from the digital revolution. At first, the move from typewriters to screens, and from “hot metal” to digital offset printing was just a nice money-saver. We were able to greatly reduce the number of printers we employed, move our printing plant to the outer suburbs and escape all the “restrictive work practices” – lurks and perks – of the militant printers’ union.

But then we – like every newspaper – discovered that the rise of the internet had taken away most of our advertising revenue. Before the revolution, every big city had a broadsheet newspaper with a virtual monopoly over classified advertising. A monopoly it exploited to the full.

This “river of gold” kept Fairfax profitable, even though most of the money was used to employ more journalists and compete for the best journalists by paying them well.

But when it became obvious that people wanting to sell houses or cars, or fill job vacancies, could do much better by advertising on the net, the river of gold ran dry.

From the beginning, newspapers’ business plan had been strange but simple: use your news to gather an audience, then charge advertisers for access to your audience. To maximise the audience, keep the paper’s cover price nominal.

At first, we – and other newspapers around the world – just tried to move the same formula online. We put all our editorial content online and freely available, hoping to attract enough digital advertising. We tried using “clickbait” to get as many people momentarily clicking on our site as we could.

It didn’t work. Eventually, we realised that almost all the digital advertising revenue was being scooped up by Google and Facebook. Following the lead of The New York Times, we moved to putting much of our online content behind a paywall and charging readers a subscription for access to it.

Since the internet remains replete with free news, it’s a business model that works only if your news is different and better than the free stuff.

I was never confident a company as old as Fairfax could bring itself to make the radical changes necessary to survive in the strange new world of digital news. Without the classifieds’ river of gold, we had to lose a lot of journalists, cut a lot of costs and change a lot of practices.

I give much credit to former Fairfax chief executive Greg Hywood – a former editor-in-chief of the Herald, who I’ve known since we worked in adjoining offices in the Canberra press gallery in 1975 – for ensuring the survival of the Herald and other great mastheads.

Some other chief executive might have secured the company’s survival by ditching all those terrible old newspapers, but Fairfax without its mastheads was of no attraction to a life-long journo like Hywood.

Ably assisted by Antony Catalano, who belatedly established Domain to capture a large chunk of the online property classifieds market, Chris Janz, who devised the mastheads’ rescue plan, and Michael Stevens, whose one goal is to prolong the life of our print editions (and is the man to credit – or blame – for attracting all those Harvey Norman ads), Hywood secured the future of the Fairfax mastheads.

The digital subscription model is working – these days, the meaning of the word “subs” has changed from subeditors to subscriptions – and as we tighten our paywall, it works even better.

At one level, our valuable sources of non-news revenue, Domain, and our joint venture with Nine in the Stan streaming video business, helped ensure the company stayed profitable.

At another level, however, Hywood knew that, without a family with majority control, we were vulnerable to some sharemarket raider keen to buy our side assets and happy to dump our reason for being.

His last act was to find another, bigger company to which he could marry us off, and so protect us from hostile takeover. It needed to be another media company, one that was a good fit with the assets we brought to the marriage, and one that understood the need to preserve the independence and reputation of the classy dame it was acquiring.

Hywood chose well. It’s been a happy, respectful marriage. Our many media competitors have banished the word Fairfax and delight in demeaning us as “the Nine newspapers”.

Those more susceptible to conspiracy theories see us as controlled by daily talking points issued by the chairman of Nine Entertainment, Peter Costello.

Nothing of the sort. I guess I’ll have to retire some day, but I don’t expect unhappiness with our owners to be any part of my reason for hanging up my boots.

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How budget spin doctors manipulate our first impressions

These days, federal budgets are just as much marketing and media management exercises as they are financial and economic documents. That’s because the spin doctors’ role has become central to the way Canberra works. This is just as true under Labor as the Coalition. Media management is a characteristic of government by the two-party duopoly.

Budgets are actually the management plan for controling the government’s spending and tax-raising over the coming financial year. Because you can’t do a budget without first making guesses about what will be happening in the economy at the time, the budget documents contain detailed economic forecasts and commentary about what it has supposed will happen.

These forecasts are taken very seriously on budget night, but rarely referred to again. That’s because this era of dominant “monetary policy” (manipulation of interest rates), conducted by an independent central bank, means it’s the Reserve Bank’s forecasts that matter.

We’ve had those already, on Friday. The financial markets care more about the Reserve’s opinions than the government’s because they’re always trying to guess what the central bank will do to interest rates. What’s more, the RBA revises its forecasts quarterly, so the budget forecasts soon become outdated.

All this means the government’s forecasts can’t be very different from the Reserve’s. Differ by more than half a percentage point, and you get headlines about a split between Treasury and the central bank. Nothing the econocrats hate more (even though there’s unceasing rivalry between the two outfits).

A separate question is what effect the budget, and particularly the new measures it contains, will have on the economy: on gross domestic product, inflation and unemployment. Now that the macroeconomic fashion (aka “best practice”) dictates that the management of demand be left to the central bank – except in emergencies, such as the pandemic – the budget papers will contain little discussion of this.

But the inescapable fact remains that, the federal budget being so big relative to the economy, everything it does affects economic growth. That’s true whether the economic effects were intended or are the unintended consequence of politically driven decisions. All budget measures are political but, equally, all have economic consequences.

At this time of year, many people say they don’t know why the government is bothering to hold a budget when it has already announced the changes it’s making. Well, not quite.

What’s true is that, these days, budgets – and the days leading up to them – are highly stage-managed by the spin doctors. These people are based in the PMO – prime minister’s office – with extension into every minister’s office, via the minister’s press secretary. All paid for by the taxpayer, naturally.

The spin doctors’ job is to use the “mainstream media” to convey to voters an unduly favourable view of the government and the things it’s doing. They do this by exploiting the foibles of journalists and their editors.

Hence, the common trick of releasing potentially embarrassing information late on a Friday, when it’s less likely to make the bulletin. The hope is that, by Monday, the under-reported story is passed over as “old”.

The spinners have the great advantage of a near monopoly over news about what the government is doing. Much of this news is put into press releases, but much is held for selective release to journalists and outlets that are in favour with the government. Write a piece like this one and don’t expect to be popular.

In the olden days, many budget “leaks” really were leaks, the product of journalists talking to bureaucrats and putting two and one together to make four. These days, bureaucrats are forbidden to speak to journos, so most budget leaks have come from the spin doctors, intended to soften us up for what’s to come.

Sometimes, something – say, that the government has decided to increase the JobKeeper payment only for the over-55s – is leaked to just one or two news outlets to “run it up the flagpole and see who salutes”. If it goes over well enough, it will happen. If there’s a big adverse reaction it may never be heard of again.

Any bad news is usually officially announced ahead of the budget, so it won’t spoil the budget’s reception on the night. Lots of small but nice decisions will be announced early, so they don’t get overlooked on the night.

But, particularly if there has been a big pre-announced unpopular measure, the spinners will save some nice, un-foreshadowed hip-pocket measure for unveiling on the night. This, being the only major budget measure that’s “new”, will dominate the media’s reporting. I call it the cherry on top.

As a former treasurer, John Kerin, demonstrated in 1991 – much to the disapproval of Paul Keating - there is no genuine need for reporters to be locked up and allowed to see the budget papers well before the treasurer delivers his speech at 7.30pm, immediately after the ABC evening news.

But the budget “lockup” persists to this day because of its great media-management advantages. It’s of much benefit to have the treasurer’s made-for-telly (that is, full of spin) budget speech broadcast in prime time, rather than after lunch. (The smaller disadvantage is that the ABC gives the leader of the opposition – not the shadow treasurer – right of reply, at the same time on Thursday night.)

The other advantage of a lockup is that letting journalists out so late in the day gives them little time to ask independent experts what they thought of the budget. Rather, they’ve spent six hours locked up with Treasury heavies. (I remember one saying to me, long ago: “Not much there to criticise, eh?” )

This media manipulation usually ensures the media’s first impressions are more favourable to the government than they should be, getting the budget off to a good start with the voters. Only on day two do the interest groups finish combing through the fine print and finding the carefully hidden nasties.

All pretty grubby, but true.

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This isn't America, so please stop acting like a Yank

If there’s one thing that annoyed me about 2021, it’s the way people have been aping all things American. Our financial markets copped a bad dose of it, the media got carried away, we looked to the Yanks – the smart ones and the crazies - to know what we should think and do about the coronavirus, and many on the Right of politics took their lead from Trump’s Republicans.

One on one, I like the Americans I know. But put them together as a nation, and they seem to have lost their way. We’ve long imagined the US to be the wellspring of everything new and better, but these days it seems to be racing headlong towards dystopia.

Who’d want to be an American? Who’d want to live there?

There’s nothing new, of course, about American cultural imperialism. You’ve long been able to buy a Coke in almost any country. Or, these days, a Big Mac or KFC.

But globalisation has hugely increased America’s influence in the world. Wall Street dominates the world’s now highly integrated financial markets. What’s less well appreciated is the way advances in telecommunications and information processing have globalised the news media. Call it the internet.

These days, news of a major occurrence in any part of the world spreads almost in real time. One thing this means is that you can read the latest from The Age or The Sydney Morning Herald in almost any country.

But another thing is that we get saturation coverage of all things America. These days, America’s greatest export is “intellectual property” – patents and copyright covering machines, medicines and software, but also books, films, TV shows, videos and recorded music, and news and commentary from all of America’s great “mastheads”.

Of course, the little sister syndrome applies. Just as Kiwis know more about us than we know about them, so we and people in every other country know more about the Americans than they know about us. Just ask John Fraser, Malcolm Trumble and “that fella from Down Under”.

And remember this: when you’re as big and as rich as America, you’re the best in the world at most things – but also the worst in the world. These guys win the Nobel Prize in economics almost every year but, no doubt, have the biggest and best Flat Earth Society. They have loads of the super-smart, but even more of the really dumb.

Back to this year’s Yankophile annoyances, as soon as Wall Street decided America had an inflation problem and would soon be putting up interest rates, our local geniuses decided we’d soon be doing the same.

Small problem – we don’t have a problem with inflation. Our money market dealers know more about the US economy than they know about their own. To them, we’re just a smaller, carbon copy of America. If you’ve seen America, you’ve seen ’em all.

The Americans have a lot of people withdrawing from the workforce – leaving jobs and not looking for another – which they’re calling the Great Resignation. Wow. Great new story. So, some people in our media are seizing any example they can find to show we have our own Great Resignation.

Small problem. Ain’t true. Following the rebound from the first, nationwide lockdown in 2020, our “participation rate” – the proportion of the working-age population participating in the labour force by having a job or actively looking for one – hit a record high. With the rebound from this year’s lockdowns well under way, the rate’s almost back to the peak.

A lot of America’s problems arise from the “hyperpolarisation” of its politics. Its two political tribes have become more tribal, more us-versus-them, more you’re-for-us-or-against-us. The two have come to hate each other, are less willing to compromise for the greater good, and more willing to damage the nation rather than give the other side a win. More willing to throw aside long-held conventions; more winner-takes-all.

The people who see themselves as the world’s great beacon of democracy are realising they are in the process of destroying their democracy, brick by brick – fiddling with electoral boundaries and voting arrangements, and stacking the Supreme Court with social conservatives.

Donald Trump continues to claim the presidential election was rigged, and many Republicans are still supporting him.

It’s not nearly that bad in Australia, but there are some on the Right trying to learn from the Republicans’ authoritarian populism playbook.

When your Prime Minister starts wearing a baseball cap it’s not hard to guess where the idea came from. Or when the government wants to require people to show ID before they can vote, or starts stacking the Fair Work Commission with people from the employers’ side only. Enough.

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My love letter to The Sydney Morning Herald

It’s not something any hard-bitten journalist should admit, but I’m in love with The Sydney Morning Herald. Have been since, at the age of 26, I quit chartered accounting in disillusionment and stumbled into a cadetship at the Herald. I quickly realised I’d found the only place I wanted to be.

After four years they gave me the title of economics editor and sat me in an armchair with a licence to air my opinions about anything economic. It’s probably the only job I’m capable of doing with any competence. I’ve been so fulfilled by my work that, in 47 years, I’ve never wanted another job on the paper and, certainly, never wanted to move to another paper.

I suspect that by now I’m actually addicted to column-writing and to staying one of the Herald‘s roosters rather than one of its many feather-dusters. When my designated retirement date arrived, I had no desire to hang up my boots and luxuriate on the Herald’s more-than-generous super scheme. And, apart from Jessica Irvine, detected no desire by my colleagues to wave me off.

But I promise you (and Jessica) this: I’ll be out of here the moment I find I’ve worn out my welcome with our readers or my bosses, or realise I’m starting to lose my marbles. That I’m still keen to learn more about the economy and to work rather than play, I credit mainly to three gym sessions a week with my physio trainer, Martin Doyle. Exercise is good for mental as well as physical fitness.

I did feel I should at least stay on to do my bit in helping the Herald make the seemingly improbable “transition” – what a fashionable word that’s become – from “legacy asset” to successful digital “masthead”. Fortunately – and touch wood – we’ve passed that test now we’ve switched from chasing clicks to seeking digital subscriptions.

The thought of the Herald ceasing to be appalled me. As Australia’s oldest metropolitan daily newspaper, for 190 years it’s been one of the pillars on which Sydney rests. I get an enormous kick from being a tiny part of that grand history – for, I realise to my amazement, almost a quarter of its existence. It tickles me that, in the days when governors of NSW and Anglican archbishops of Sydney were recruited from England, so were editors of the Herald.

I’m proud of the many big names to have worked for the Herald at some point in their career. Banjo Paterson was our correspondent covering the Boer War. C.E.W. Bean was a Herald writer before becoming the federal government’s official war correspondent in World War I. Angus Maude, one of our last English-export editors, became Maggie Thatcher’s Paymaster General. I remember Thatcher’s daughter Carol working for a few months in our newsroom.

The playwright and speech writer Bob Ellis’ Herald career lasted 11 days. Columnist and poet Clive James lasted longer before he went off to England to make his name. I remember author Geraldine Brooks cutting a swathe through our feature writers’ room before she went off to New York to make her name. The others wrote one feature a week; she wrote one a day.

Together with her journalist husband George Johnston, Charmian Clift was a celebrity in 1960s Sydney before the word had been invented. This was explained by the years they’d spent living on a Greek island, where (we’ve learnt only recently) they were friendly with some Canadian singer named Leonard and his girlfriend Marianne. Charmian wrote a highly popular weekly column in the Herald, before ending her life.

William Stanley Jevons, a celebrated English neo-classical economist and polymath of the 19th century, discoverer of the Jevons paradox, spent part of his early career working at the Sydney Mint. He didn’t work for the Herald, but he did write letters to the editor. Hearing that made me proud to work where I did.

The Herald has changed greatly over the years I’ve been here and, leaving aside the many journalists we lost as we made our painful adjustment to the digital revolution, mainly for the better. Some years ago, someone got the idea of honouring our longest-serving journos by presenting them with a framed copy of our front page from the day they joined the paper. I was shocked by how dreary mine was. We were busy sticking to traditional standards as the world around us was changing without us noticing.

These days we cover a wider range of subjects – crime and lifestyle interests – all in a livelier, brighter, cleaner, more cleverly written way. I like to think I’ve been part of our move to a less formal, more relaxed and conversational writing style. The old-timers would be appalled to see us saying “kids” rather than “children”.

The Herald is far from perfect – no “first draft of history” ever is – but I value being at the more careful, intellectually respectable and, dare I say, gentlepersonly end of the news media. I feel privileged to write for such a well-educated audience.

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Who pays for Google and Facebook's free lunch?

There may be banks that are too big to be allowed to fail, but don’t fear that the behemoths of the digital revolution are too big to be regulated. It won’t be long before Google and Facebook cease to be laws unto themselves.

It’s the old story: the lawmakers always take a while to catch up with the innovators. But there are growing signs that governments around the developed world – particularly in Europe and Britain - are closing in on the digital giants.

And here in Australia, the Australian Competition and Consumer Commission is busy with the world’s most wide-ranging inquiry so far, which will report to the newly elected federal government in June. The commission’s boss, Rod Sims, gave a speech about it a few weeks ago, and another this week.

Sims says the commission’s purpose is “making markets work” by promoting competition and achieving well-informed consumers, so as to deliver good outcomes for consumers and the economy.

With this inquiry into the operations of “digital platforms”, he acknowledges that they have brought huge benefits to both our lives as individuals and our society more broadly.

“They are rightly regarded as impressive and successful, and very focused, commercial businesses. Google and Facebook are rapidly transforming the way consumers communicate, access news, and view advertising,” Sims says.

Each month, he says, about 19 million Australians use Google to search the internet, 17 million access Facebook, 17 million watch content on YouTube (owned by Google), and 11 million double tap on Instagram (owned by Facebook, along with WhatsApp).

The inquiry has satisfied itself that this huge size gives the two companies considerable “market power” – ability to influence the prices charged in certain markets.

“However,” Sims says, “being big is not a sin. Australian competition law does not prohibit a business from possessing substantial market power or using its efficiencies or skills to outperform its rivals.”

But the dominance of Google and Facebook does mean their behaviour should be scrutinised to see if it is harming competition or consumers.

To this end, the inquiry is focused on three potential areas of harm. First, the well-publicised issues of privacy and the collection and sale of users’ data.

Second, the digital platforms’ role in the advertising market, which is moving increasingly on line, where it’s estimated that 68¢ in every digital advertising dollar is going to Google (47¢) and Facebook (21¢).

And that’s not including classified advertising, the loss of which has been the biggest single blow to this august organ.

Sims says Google sells "search advertising", aimed at making an immediate sale, whereas Facebook sells "display advertising", aimed a making consumers aware of the product.

The pair sell ad space in their own right while also facilitating the advertising space sold by others, particularly the media companies. But the opacity of their algorithms and arrangements make it hard to know whether they favour their own ads over other people’s.

Advertisers say they don’t know what they’re paying for, where their ads are being displayed or to whom. This makes it harder for media companies to capture their share of advertising moving online.

Of course, higher costs for advertisers translate to higher prices for consumers.

Third is the digital platforms’ effect on the supply of news and journalism, the primary issue given to the inquiry.

Sims says newspapers and free-to-air radio and television are a classic example of a “two-sided market”. They serve consumers but, rather than charging them directly for the service as other businesses do, they cover their costs and profits by charging advertisers for access to their audience. (Newspaper subscriptions and cover prices accounted for only a fraction of their costs.)

Digital platforms aren’t just two-sided, they’re multi-sided. They, too, provide their services free, and charge advertisers, but also collect and sell to advertisers information about their users’ habits.

Google and Facebook select, curate, evaluate, rank, arrange and disseminate news stories. But they use stories created by others; they don’t create any news stories of their own. If they did, we could see this as no more than tough luck for the existing news media.

But as well as using the existing media’s stories to attract consumers and advertisers, about half the traffic on the Australian news media’s websites comes via Google and Facebook. So they have “a significant influence over what news and journalism Australians do and don’t see,” Sims says.

With the existing media having lost so much of its advertising revenue to the platforms, it’s not surprising they’ve had to get rid of at least a quarter of their journalists. There are a few new digital-only news outlets, but even they are having trouble making it pay.

Trouble is, news and journalism aren’t like most commercial products. They not only benefit the individual consumer, they benefit society as a whole. “Society clearly benefits from having citizens who are able to make well-informed economic, social and political decisions,” Sim says.

So news and journalism is a “public good” – if left to the profit-making private sector, not as much news and journalism will be supplied as is in the interests of society.

Public goods are usually paid for or subsidised by governments using taxpayers’ funds. If we want the benefits of Google and Facebook without losing the benefits of active, independent and challenging news media, taxpayers will have to help out.

Sims is canvassing several proposals before completing his final report. Since the former newspaper companies have realised they’ll never get much of a share of digital advertising, they’re now putting more hope in persuading their regular users to pay directly by buying subscriptions.

With the long-established attitude that everything on the internet should be free (or, at least, seem free), they’re finding it hard going.

That’s why I think Sims’ best suggestion is making personal subscriptions to the news media tax deductible, provided the outlet is bound by an acceptable code of conduct.

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Our bulldust detectors are on the blink

The world has always been full of bulldust, which is why everyone should come equipped with a bulldust detector.

Trouble is, we're living in a time of bulldust inflation. Some of the things we're being told are harder and harder to believe. But a lot of people's detectors seem to be on the blink.

Part of the reason for the step-up may be that there are so many people shouting that anyone else hoping to be heard has to start shouting too.

These thoughts are prompted by the runaway success of the claim that 40 per cent of jobs in Australia are likely to be automated in the next 10 to 15 years.

This is a fantastic claim in the original, dictionary sense: imaginative or fanciful; remote from reality.

And yet it seems many thousands of people have accepted its likelihood without question.

Similar predictions have been made about America, and are just as widely believed.

As I've written before, two economists, Jeff Borland and Michael Coelli, of Melbourne University, who didn't believe it – because they could find no evidence to support it – traced the origins of the claim and the flimsy assumptions on which it was based.

Which led them to ask the question I'm asking: why do people so readily believe propositions they should find hard to believe?

The authors found a quote from a leading American economist, Alan Blinder, of Princeton University, in his book, After the Music Stopped.

"The consequences of adverse economic events are typically exaggerated by the Armageddonists​ – a sensation-seeking herd of pundits, seers and journalists who make a living by predicting the worst.

"Prognostications of impending doom draw lots of attention, get you on TV, and sometimes even lead to best-selling books . . .

"But the Armageddonists are almost always wrong," Blinder concludes.

What? Journalists? Bad news?

Blinder is right in concluding we take a lot more notice of bad news than good. Borland and Coelli observe that "You are likely to sell a lot more books writing about the future of work if your title is 'The end of work' rather than 'Everything is the same'.

"If you are a not-for-profit organisation wanting to attract funds to support programs for the unemployed, it helps to be able to argue that the problems you are facing are on a different scale to what has been experienced before.

"Or if you are a consulting firm, suggesting that there are new problems that businesses need to address, might be seen as a way to attract extra clients.

"For politicians as well, it makes good sense to inflate the difficulty of the task faced in policy-making; or to be able to say that there are new problems that only you have identified and can solve," the authors say.

I'd add that if you're a think tank churning out earnest reports you hope will be noticed – if only so your generous funders see you making an impact – it's tempting to lay it on a bit thicker than you should.

By now, however, it's better known that there are evolutionary reasons why the human animal – maybe all animals – takes more interest in bad news than good news.

It's because we've evolved to be continually searching our environment for signs of threat to our wellbeing.

All of us are this way because we've descended from members of our species who were pretty nervy, cautious, suspicious types. We know that must be true because those of our species who weren't so cautious didn't survive long enough to have offspring.

In ancient days, the threats we were most conscious of were to life and limb – being eaten by a wild animal. These days we keep well away from wild animals, but there are still plenty of less spectacular, more psychological threats – real or imagined – to our wellbeing.

This instinctive concern for our own safety is no bad thing. It helps keep us safe. It's an example of the scientists' "precautionary principle" – the dire prediction may not come to pass, but better to be on the safe side and take out some insurance, so to speak.

By contrast, failing to take notice of good news is less likely to carry a cost.

Except that, like many good things, it can be overdone. If we're too jumpy, reacting to every little thing that comes along, we're unlikely to be terribly happy. And unremitting stress can take its toll on our health.

Which brings us to the media. Journalists didn't need evolutionary psychologists to tell them the customers find bad news more interesting. Bad news has always received a higher weighting in the assessment of "newsworthiness".

But I have a theory that the news media have responded to greater competition – not just between them but, more importantly, with the ever-increasing number of other ways of spending leisure time – by turning up the volume on bad news.

This can create a feedback loop. People wanting their messages to be broadcast by a media that's become ever-more obsessed by bad news respond by making those messages more terrible.

I'm not sure the media have done themselves a favour by making the news they're trying to sell more depressing, BTW.

But Borland and Coelli offer a further possible explanation of why we're inclined to believe that the technological change which has been reshaping the jobs market for two centuries without great conflagration is about to turn disastrous: the cognitive bias that causes people to feel "we live in special times" – also known as "this time is different".

"An absence of knowledge of history, the greater intensity of feeling about events which we experience first-hand, and perhaps a desire to attribute significance to the times in which we live, all contribute to this bias," they say.

If so, a lot of people will continue believing stuff they should doubt.

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How to unspin the budget

You can't look hard at the budget and its glitzy packaging without being reminded of Rob Sitch's highly educational TV show, Utopia.

My colleague Peter Martin has detected that the Turnbull government, as distinct from its Coalition predecessor, is less ideological and more evidence-based in its policy making. Its reforms to superannuation and Work for the Dole are prime examples.

That's good news. Even so, the more intelligent and articulate Malcolm Turnbull hasn't been able to withstand the pressure to use spin doctors to massage his messages to the electorate.

A better term for that dubious profession is "perception manipulators". They "operationalise" one of modern politicians' core beliefs: the perception is the reality.

The world of government is such a complicated place that reality is seen only in glimpses - which is hugely fortunate for our pollies because the reality is usually much harder and more costly to fix. It's a lot easier to manipulate the punters' perceptions of that reality.

Scott Morrison has been relentless in insisting that the budget is not just another budget, but an economic plan for jobs and growth.

Really? Name the budget that hasn't been a plan for jobs and growth.

So why the fuss this year? Because, to quote Morrison, "Australians have clearly said we must have an economic plan". How does he know what Australians have clearly said? Because that's what a few of them said to the Liberal Party's focus groups.

Feeding back to voters the sentiments they've expressed in your focus-group research is a standard perception manipulators' trick.

My guess is the government had a collection of end-of-term and pre-election bits and pieces it wanted to get up, but felt it should package them as an "overarching narrative" by saying they were a plan.

A plan about what? The usual: jobs and growth. Just about everything you do - raise the tax on cigarettes, stop wealthy people like me saving too much in tax-sheltered super accounts - can be portrayed as helping to promote jobs and growth. And they were.

Every non-plan plan needs to come in impressive packaging. The plain and earnest budget papers prepared by Treasury and Finance have long been accompanied by an overview booklet prepared by the spin doctors and disparagingly referred to by the econocrats as "the glossy".

This year there are four glossy documents, not one. And whereas the original majored in fancy graphs and tables, the extras add a lot of colour pics of good looking punters. It's fiscal bling.

Even the budget website has had the interior decorators in. You now have to click through a host of pretty fluff to find what you need.

Key to the success of perception manipulation is the use of magic words - words with strong positive or negative connotations, words that arouse emotions.

What words are guaranteed to frighten punters? Try "debt" and "deficit". What word gladdens the hearts of business people? "Growth".

And of the punters? "Jobs". They may not claim to know anything much about economics, but one thing they do know: there can never be enough jobs. Claim to be creating them and you're well on the way to the punters' tick.

This time the magic-word workhorse is "middle". Almost all Australians believe themselves to be middle class, on incomes near the middle. The higher your income, the less your ability to know where the middle is.

Morrison never actually said his tiny tax cut for people earning more than $80,000 a year was aimed at middle-income earners, all he said (correctly) was that the threshold had been set just above the average full-time wage.

That was enough to have innumerate political journalists - particularly at the ABC - saying it for him.

Trouble is, almost a third of wage-earners are part-time, not full-time. And plenty of taxpayers aren't employees. What's more, the relatively small number of people on super-high incomes means that the "average" or mean taxpayer's income is well above the middle (or median) taxpayer's income.

All this explains why the tax cut will go to only about the top quarter of taxpayers. That's the middle?

These days, no self-respecting perception manipulator fails to pull some "modelling" out of his bag of tricks. The results of the modelling are almost invariably misrepresented, being made to sound more significant than they are.

The spin meisters​ pray the media won't actually look at the modelling, and their prayers are almost always answered.

You can blame it all on ever-declining standards of political behaviour - which Turnbull's arrival has failed to arrest - or you can share the blame with a media that allows itself to be manipulated.

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Blame pollies and media for low political standards

As intensified personal ambition has heightened competition between the parties, unwritten rules that certain subjects were off limits to the political contest have gone by the board.

The obvious example is immigration, Asian immigration in particular, and boat people.

For many years, both sides knew there was an ugly, xenophobic side of the Australian character and tacitly agreed not to do or say anything that would give it air.

Howard was part of the breakdown of that taboo, but perhaps a bigger cause was the arrival of radio shock-jocks who didn't care what demons they unleashed.

As politics has become more of a job for life, it's also become more of a science and less of an art, as parties have made more use of sample-based polling and the techniques of marketing, including sophisticated advertising and focus groups.

There was a time when politicians relied on their own contact with voters and their gut feelings to assess how their policies and performance were being received by the electorate.

These days, their polling and reports of focus group discussions leave them in no doubt about what voters are thinking on all topics.

Or, at least, leave them imagining there's no doubt. In truth, even quantitative polling can be misunderstood and qualitative  research from focus groups is so subjective it's notorious for the bum steers it can give.

Even so, it does seem the parties get very similar messages from their rival efforts.

When focus groups were introduced, the rationale was they would inform the parties on how to frame the policies they wanted to pursue in ways that made them more attractive to voters.

But when you are – or imagine yourself to be – fully informed on what the punters like and dislike, the temptation to let those preferences determine what policies you pursue must be almost irresistible.

What this seemingly less amateur and more scientific approach to politicking overlooks is the often paradoxical quality of human nature.

Tell me only what I want to hear and I begin to wonder whether I can trust you.

What exactly do you believe? Keep it wishy-washy and I wonder if you really believe anything.

Only ever tell me nice stuff and I wonder whether you're tough enough for the job.

Become a slave of focus group approval and you risk forgetting that, though I don't like the sound of your plan, I could be persuaded it's what the country needs.

In the old days, a politician like Fraser won elections because he was seen as a stern father the times called for, not because he was popular.

Another drawback of the more calculated approach to politics is governments' ever-increasing superficiality.

If, as all politicians believe, "the perception is the reality", why not focus on perceptions and appearances and let reality slide?

If the trains aren't running on time or people are waiting too long for elective surgery, why not measure these things in ways that are more favourable?

Why not favour responses to problems that are flashy or emotionally gratifying rather than boring but effective?

Why waste scarce resources on repairs and maintenance or renovation when you can build something new and be seen cutting the ribbon and making great progress?

When the number of problems or worthy causes far exceeds the revenue you've got to spend, why concentrate on those where your spending is likely to be most effective rather than slinging an inadequate sum to as many as possible and so mollify as many potential critics as possible?

Why give much to people such as the unemployed or single mothers for whom there's so little public sympathy?

When the public takes an irrational set against outsiders such as boat people, why not gratify their prejudices rather than defend the needy?

When people convince themselves they're struggling to keep up with the cost of living but the objective indicators say wages are rising faster than prices, why try to set them straight when it's so much easier to pretend to be sympathetic?

In short, why not reinforce prejudices and misperceptions rather than educate?

Why not follow the voters rather than lead them?

"There go the people. I must follow them for I am their leader." When memories and political terms are so short and punters so ungrateful, why not be short-sighted and risk averse?

All those temptations are reinforced by the media. It's the media that are overly preoccupied with and impressed by the new rather than the old, by the flashy and the emotionally gratifying, by what's on the surface rather than what's underneath, by the immediate rather than the prospective, by the irrational rather than the rational, by the sympathy-rousing case study rather than the systemic failure.

Politics has changed over the years but so, too, have the media. And they've both changed in ways that are mutually supportive. The two institutions have become more symbiotic.

There's no doubt the speeding up of the 24-hour news cycle is essentially the product of the media's ever-shortening attention span as part of the intensifying competition between the media's ever-proliferating mediums, including the advent of 24-hour news radio and TV channels.

But a lot of the dumbing down has been initiated by the politicians and their party machines for their own reasons. There is plenty of blame to be shared between the two institutions.

This edited extract from Gittins by Ross Gittins, published by Allen & Unwin, is out this week.

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