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RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

The federal government frames itself as the responsible economic manager. But many of the claims it makes about the economy do not stack up.

In particular, the government uses economics to say it has no choice on some policies - when the opposite is often true.

Today, economist and contributor to The Saturday Paper Richard Denniss on how economic language is used to trick voters.

It’s Monday, March 21.

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RUBY:

Richard, your piece for the Saturday paper, it's about the lies that are told about the Australian economy, but before we talk about what those lies might actually be, what are your thoughts on why politicians would tell lies about economics in particular?

RICHARD:

Oh, telling lies about economics, as is kind of the stock and trade, unfortunately, of conservative politicians in Australia.

Archival Tape -- Scott Morrison:

"Australians know. Mr Speaker, it is no easy task to secure jobs and growth in a highly competitive, volatile and uncertain global economy, despite the challenges and the naysayers"

RICHARD:

Because if you can control the debate about what's good for the economy, you can control the debate about everything we need to do

Archival Tape -- Scott Morrison:

"Australians know that our future depends on how well we continue to grow and shape our economy as we transition from the unprecedented mining investment boom to a stronger, more diverse new economy.”

RICHARD:

Once you embrace this idea that we all have to make sacrifices for the economy, then the politicians who sort of become the gods of what the economy needs, they get to tell us what the shape of the sacrifice should be.

Archival Tape -- Scott Morrison:

“They know that their future, their jobs and those of their children and grandchildren depend on it"

RICHARD:

I mean, economics is all about choices and trade offs, and there is no magic answer in economics. But Scott Morrison's very good and the coalition in generally a pretty good at convincing the public that we have no choice but to go along with rising inequality, rising cost of housing, falling wages growth and and of course, you know, we couldn't possibly tackle climate change without wrecking the economy.

So, you know, the beautiful thing is, if you can catch all of these things in terms of economics and you can and you can keep claiming to be a good economic manager and you can keep claiming that your preferred policies will be good for the economy, you create this mystique around yourself.

So, yeah, it's a very powerful space for them to own. That's why they put so much effort into telling so many lies about what the economy looks like and what the economy needs.

RUBY:

And I suppose, Richard, there are ways of framing things, and then there are also outright lies. And so I wonder if you can just tell me a bit about a particular story that we're told about the economy and conversely, how far from the truth that story might be?

RICHARD:

Oh, let me count the ways, but let's start with a specific one.

Remember when COVID hit, the government pulled together a whole bunch of businessmen, and they nearly were all men, to advise us on how to get through the crisis.

Archival Tape -- Scott Morrison:

“Get more gas more often and more reliably.”

RICHARD:

And strangely enough, a lot of the people he selected worked in the oil and gas industry. And then we cooked up this crazy idea that we needed to have a “gas-fired recovery” from COVID.

Archival Tape -- Scott Morrison:

“By resetting our East Coast gas market, unlocking additional gas to drive recovery, paving the way ultimately for a world-leading Australian gas hub to support high wage jobs.”

RICHARD:

So you know, what we did as we often do is we put the fossil fuels industry right at the heart of the Australian economy. And we basically said, if you want to help the whole economy, you have to help the oil and gas industry.

Archival Tape -- Scott Morrison:

“That's why they will invest. That's why they will take a risk. That's why they'll have a go. And that's what our JobMaker plan for. Australia's economic recovery is actually all about”

RICHARD:

Now, to be clear, there were around 20,000 people working in oil and gas at the beginning of the crisis, 20,000 out of more than 13 million people with jobs in Australia. And the gas fired recovery was such a dismal failure that by the end of Covid employment and gas had fallen from 20,000 to about 18,000.

But what we did do during the gas fired recovery was shovel billions of taxpayers' dollars onto ridiculous new projects to expand the oil and gas industry in Australia.

So these lies are really important. We literally left 99 per cent of the population out of our recovery plans when we focussed on on the gas industry.

RUBY:

Right. And so what is the point of all of this? And then, Richard, of trying to convince people that we need a gas-fired recovery when in fact something like that actually leaves out that percentage of the population?

RICHARD:

So the point of telling lies is to conceal the importance of the decisions they're making and the power that they wield.

I mean, that's the irony in Australia. We kind of think it doesn't matter who's in power because they'll all do the same things. Well, there's no reason to suspect that at all. You know, the government spends $450 billion a year of our money every time they say they can't afford to do something - what they're really saying is I'd prefer to give it to someone like oil and gas or coal or tax cuts for high income earners.

RUBY:

We’ll be back in a moment.

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RUBY:

Richard, we’ve been talking about the decisions the federal government makes about the economy - and how it conceals that these are in fact decisions, by framing them as economic necessities. But when you look at what is actually decided on - who benefits?

RICHARD:

Oh well, you know, people earning over $180000 a year are about to get a $9000 a year tax cut. Think about that - a $9000 a year tax cut for the highest income earners in Australia. You can understand why they might vote for the Coalition.

A lot of conservatives have realised that if you tell people that economics is all about making hard choices and then you conclude that the hard choice includes tax cuts for high income earners and service cuts for poor people, it makes it a lot easier for those high income earners to feel good about voting for their self-interest.
You know, so rather than say, Look, we could give $15 billion a year in tax cuts for people who are already rich, or we could boost the wages of aged care workers and nurses. What do you reckon? What should we do? I think a lot of high income earners would actually, you know, be happy to see aged care workers get a pay rise.
But the real trick, the real genius of this conservative messaging, is it dresses up the self-interest of some voters as again being in the national interest. That tax cuts for high income earners are good for the economy because rich people will go out and shop or something. Well, you know, when you, when you increase welfare payments or boost aged care workers wages, you know, they go out and shop too. But, but the Big Lie doesn't focus on that.

RUBY:

Hmm. And it is interesting, Richard, that we're going back to this messaging now after the pandemic in which we saw that this kind of thinking could quite quickly and easily be abandoned when it was deemed necessary.

RICHARD:

Oh, absolutely. You know, to be crystal clear, people like Josh Frydenberg and Scott Morrison spent their whole political life saying that we should have a budget surplus and we should live within our means and we have to cut spending.

Archival Tape -- Scott Morrison:

“Today I announce that we are committing 130 billion dollars over the next 6 months…”

Archival Tape -- Josh Frydenberg:

“Today the government is announcing a second package - 66 billion dollars …“

RICHARD:

They rightly jettisoned all that nonsense in the middle of the crisis.

Archival Tape -- Scott Morrison:

“JobKeeper, JobSeeker cash flow support payments for businesses.”

RICHARD:

The one and only reason that the Australian economy did so well during Covid was that they abandoned all of that neoliberal nonsense and embraced Keynesian stimulus.

Archival Tape -- Scott Morrison:

“JobKeeper alone, more than $100 billion. A record, an unprecedented investment.”

RICHARD:

They pumped $200 billion of public money into the economy, and it worked. And that was good and right, and I'm glad they did.

But now that they've done that, even though it's worked, as you said, you know, they've swayed pretty quickly back to their old messaging.

But they're still willing to shovel huge amounts of money out the door in terms of the stage three tax cuts and pre-election sweeteners. So here’s these alleged fiscal conservatives about to shovel a lot of money out the door. But again, on to the people they like.

RUBY:

Mm. And Richard, I suppose your bigger point through all of this is that economics at its core, it's about deciding how much money is raised through taxes and then where that money is spent and that really nothing should be taken as a given within that space. There are these kind of endless options for how you could configure that if you wanted to. So to end out, can you just tell me more about those options that we do have in the sort of society that we we could enjoy if we looked at it that way?

RICHARD:

Oh, look, here we are. Have yes, of course we have enormous choices. And, you know, having this crazy debate about cost of living at the moment, well, you know, private health insurance is a big cost of living and in Scandinavian countries, virtually no one has private health insurance because the public health system is so good. Private school fees cause a lot of cost of living problems for a lot of Australians. Well, in Finland, the country with the best schools in the world, there aren't any private schools. Australia has more kids going to private school as a percentage of school kids and almost any other developed country in the world.
You know, or Germany offers not just free university education to young Germans. Germany offers free university education to anyone who happens to be in Germany, including refugees and temporary residents.
So these are all rich countries like Australia, and they've made quite different choices to us. They've chosen to tax high income earners, to tax companies to tax their resources industry, to tax fossil fuels quite differently than we have. And because they collect more tax and different tax, the shape of their economy is radically different to ours and and they have much bigger public sectors that provide free, high quality services.
So, yeah, again, these big choices are completely available to us if we want to pursue them and we might not want to pursue them. But that's not economics, like whether we want to be nice to old people and nice to sick people and nice to disabled people and nice to the people we pay to care for them. Whether we want to be nice and generous to those groups is a moral choice. It's a personal choice.

To suggest that economics says we have to be nasty to the poor and we have to pay the caring sector low wages - that's not economics, that's just greedy.

RUBY:

Hmm. Richard, thank you so much for your time.

RICHARD:

Thank you.

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RUBY:

Also in the news

Labor has won the South Australian state election, defeating the Marshall Liberal government after a single term. Steven Marshall is the first incumbent to lose office since the pandemic began - and the landslide loss is seen as having ramifications for Scott Morrison at the federal level. The new Labor premier of South Australia is Peter Malinauskas, a former secretary of the right-leaning Shoppies union.

And Russian has apparently fired hypersonic missiles into an arms depot in Ukraine, marking the first use of next-generation weapons in the combat and a significant escalation. More than 3.3 million refugees have now fled Ukraine. After four weeks of fighting, Britain's defence ministry says it believes Russia's strategy has shifted to one of attrition, which is, quote, "likely to involve the indiscriminate use of firepower resulting in increased civilian casualties”.

I’m Ruby Jones. This is 7am. See you tomorrow.