Experts and 'experts'.

Everyone is an expert these days. But just as 'oils ain't oils' so some experts are legends only in their own lunchbreak. Mind you there are some Institutions that will shove any old (or young) bod into a role for which they are not so well suited. You know the score. If they tick the boxes - female, multiculti, lefty, PC - then they are to be  shielded from criticism. It is a weak and flimsy shield however, as Emma Alberici found a few weeks back. 

Emma (born 1970) is an Australian journalist and television presenter who is the Chief Economics Correspondent for the Australian Broadcasting Corporation (ABC). Alberici was until 2017 the presenter of the ABC's flagship current affairs program, Lateline. She has worked as a reporter for the ABC's The 7.30 Report and Lateline, and was also a reporter and producer with A Current Affair on Australia's Nine Network. 

A lady with a track record in an industry and an Institution known for making things up on the fly.

Emma was born to Franco and Anna Alberici. Her parents are Italian immigrants who arrived in Australia by passenger liner in 1955. The family settled in Melbourne. She graduated with a bachelor's degree in journalism and economics from Deakin University (a backwater sort of Uni, I have to say, and one which was successfully sued by a mature business student due to the poor quality of the lectures and course) and a bachelor's degree in Italian from the University of Melbourne (lefty central). 

No doubt being raised in an Italian-speaking home she could put the lecturers right. But is she an expert or even have knowledge enough to be one in Economics? 

She made some quite 'unexpectedly daft' statements on national TV about Taxation and specifically Corporate Tax for which she has been taken to task.

Emma not only ticks all the desired boxes but has that sinecure job in the ABC, paid handsomely by the taxpayers. She might claim that she is paid only 77% of the phenomenal salary given (also by the taxpayer) to men newsfolk.  I do not know. Nevertheless it takes the taxes of at least 65 shop assistants to fund her salary and very likely another 120 to pay for all her travel and dresses. What she knows of Tax is questionable. The Taxpayer pays her taxes too, remember.

Now, I am in no position to offer any economic advice of my own, let alone offer any deep criticism of Emma, being as poor as a churchmouse and having only an 'A' level in the subject. Mind you that  British A level was a long time ago and probably worth a Oz BA today, especially from Deakin. But before I poured pints for two customers who are experts I did find a quote from someone eminently qualified to offer an opinion. 

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"

James Avon Clyde, Lord Clyde KC DL (1863 – 1944) Lord Justice General and Lord President of the Court of Session from 1920 to 1935.

I would not argue with him, but suggest you bear his words in mind.

And the Muppets of course.

Chris Mitchell however did give Emma a serve and put her back in her box.

Alberici affair shows ABC needs expert economics analysis

A fortnight ago this column discussed the lack of business and economics expertise at our ABC. Right on cue the Emma Alberici affair blew up three days later.

The Australian Financial Review savaged Alberici on February 15 for a news story and analysis piece that have been defended or criticised depending on the political and economic expertise of writers who have waded into the debate.

The news piece on companies paying no tax was amended on February 16, while the analysis was removed from the ABC website for a week before being substantially rewritten and posted again on Thursday.

Paul Barry on the ABC’s Media Watch last Monday criticised aspects of Alberici’s work. Yet most pieces about the ABC’s decision to react to complaints about Alberici’s work from the Turnbull government have not nailed the problem journalistically. 

 https://www.theaustralian.com.au/business/media/opinion/alberici-affair-shows-abc-needs-expert-economics-analysis/news-story/c794b4b445a8a1c4ff96568599cc1b43?nk=1dc4d9f3f2a05effc85fce79fb2efc8a-1519653495

Here is an unvarnished truth: it is easy to produce a story with a desired political outcome and present it as “balanced” simply by carefully choosing who you quote.

In Alberici’s case a lot of weight was given to left-wing academic John Quiggin and economist Saul Eslake, a prominent commentator whose position on the central question — do corporate tax cuts eventually trickle down as increased wages? — seems to have changed over the years. Most market economists would agree with the “trickle down” proposition.

Alberici did quote Deloitte Access Economics partner Chris Richardson. He told the ABC’s Q&A audience three weeks ago the government’s proposed tax cut from 30 per cent to 25 per cent for companies with turnovers of less than $50 million would add about $20 billion to annual GDP. 

His evidence? 

Just trust the experts, the economic modellers, he said.

Some subtlety of thought is needed here. Truth is, in a $1.8 trillion economy such as Australia’s, $20bn is not a giant leap forward. It is just over 1 per cent. Nor is any link between increased company profits, investment, growth across the economy and eventually wage rises linear. Yet the history here and in the US is pretty clear. 

The big company tax cuts of treasurers Paul Keating and Peter Costello did stimulate growth and eventually wages here, as did Ronald Reagan’s tax reforms in the US. It looks like the US economy and wages are already reacting positively to Donald Trump’s proposed cuts.

This paper’s contributing economics editor, Judith Sloan, nailed Alberici’s piece when she wrote on the Catallaxy blog on February 19 that the analysis looked like a grab bag of quotes harnessed to prove the point Alberici started with.

We heard from Judith - a Professor - too, as you shall see below. 

In a column in The Weekend Australian on February 17, Sloan challenged the left’s belief that companies here don’t pay their tax bills. Tax Commissioner Chris Jordan has been fierce in chasing down debt; and, as Sloan says, reducing the corporate rate for companies paying zero now (because of depreciation, losses carried forward etc) won’t cost the government a cent. Self-evidently.

Alberici’s analysis piece did precisely what the ABC objects to in the reporting of climate science. It created a false balance by giving much weight to a view not widely held in the economics profession but dominant in the political thought of the Labor Party, the Australia Institute and the Greens. It did not respect the modelling Richardson referred to.

It is not just the ABC in the company tax quagmire. Former Sydney Morning Herald business reporter Michael West and even parts of The Australian Financial Reviewhave fallen into the trap of citing effective company tax rates against turnover rather than against profit. 

Sure there are serious issues about intercompany loan deductions used by foreign-based companies that the Australian Taxation Office has challenged successfully in court. There is also the issue of marketing hubs out of Singapore that BHP and Rio Tinto should be ashamed of using to dodge tax.

Yet the truth is, when a company such as Chevron spends $80bn building natural gas facilities here, it will take a long time before that cost is depreciated and profit and tax begin to flow. 

Ditto Qantas. Its restructuring after the GFC involved large losses as Qantas chief executive Alan Joyce took on his pilots’ closed industrial relations shop. He now expects Qantas to be paying company tax again next year after carry forward losses have been claimed and new plane depreciation costs ease.

Business writers who do not understand such things should not be writing in the area. 

Those who wilfully conflate turnover and profit should be run out of journalism. Alberici is a good reporter and strong interviewer. She has covered business, been a foreign correspondent and hosted the ABC’s Lateline, where regular viewers soon understood her political leanings. 

So what? We all have them. 

The question is: does she have the qualifications to be the ABC’s chief economics correspondent? 

Even at a 77c rate ! 

As Aaron Patrick pointed out in The Australian Financial Review last week, she has a bachelor of arts with a major in Italian.

In my view the ABC needs to hire an expert economics editor. Comment and analysis should be left to that person while Alberici focuses on business and economic news and interviews. Freeing up ABC editorial guidelines as suggested by Media Watch will make matters only worse.

So will corporate tax cuts flow through to wages? Yes, eventually, but the world only started to come out of the greatest economic shock since the Depression seven years ago. And domestically the unwinding of the mining construction boom has left spare labour market capacity across the country. Three billion people are entering the First World, competing with workers from traditional developed countries. The internet, the mobile phone and robots are changing the value of human work, pressuring wages.

Are corporate tax cuts really the best way to stimulate growth? 

Probably not. 

There is a strong argument for personal income tax cuts that extend to the 50 per cent of Australians who are net payers after benefits. But that would raise even more divisive greed arguments from the Australia Institute, the Greens, the ALP and our ABC.

So to Judith who was introduced by Jim Ball.  Jim at the back of the bar, nursing a pint shouted above the hubbub... 

Congratulations to Judith Sloan for highlighting the other ABC finance, economic and business journalists in addition to Emma Alberici who seem more intent on pursuing their own personal crusades and campaigns.

Sloan again underscores the inherent overt and covert bias or bias by omission within the organisation whether it be misleading, deceptive and twisted information or something more sinister, undeclared and unknown to the listener, such as the selection of guests for comment, obviously selected to further buttress and reinforce the position of the journalist. 

And this is just in business and finance. I’m sure similar nests of rogue, jihadi journos could be found right across the spectrum from climate change to illegal immigrants in the public broadcaster. The last and only inquiry into the ABC since it was founded in 1932 was the Fraser Government’s Dix inquiry of 1979. 

It’s time for another, and a subsequent root and branch, top to bottom shake up and shake out.

Judith took the floor. She took a broad brush not just to Emma but 'the system'.

ABC staff campaigns fail to serve public interest

My guess is that Emma Alberici has had better months. She has become the emblem of what many perceive to be the central weakness of the ABC — 

its unceasing and lopsided advocacy of left-wing positions.

But we should be clear about one thing: it’s not just Alberici.

Before I identify other ABC economic/business commentators who regularly make prejudiced contributions to various ABC outlets, let me point out that it is the legislated duty of the board of the ABC to “ensure that the gathering and presentation by the corporation of news and information is accurate and impartial according to recognised standards of objective journalism”.

 https://www.theaustralian.com.au/news/inquirer/abc-staff-campaigns-fail-to-serve-public-interest/news-story/d08681acf69d955a8c3dd0caa969db4b?nk=1dc4d9f3f2a05effc85fce79fb2efc8a-1520057312

Given the Alberici affair, it is clearly arguable that the board is failing to fulfil this duty. But it goes much deeper than the two highly dubious articles on company tax that Alberici produced, as well as the egregious comments she made on ABC radio.

Let me identify three other commentators whose contributions it would be hard to describe as “accurate and impartial”.

They are all men: Ian Verrender, Stephen Long and Michael Janda. Each has waged long campaigns on issues they personally regard as important.

Verrender, in fact, has been banging on about supposed corporate tax avoidance in Australia for a long time and is as dismissive as Alberici of the case for lowering company tax rates in this country.

He has even used the same suspect table sourced from the US Congressional Budget Office on international comparisons of company tax rates that Alberici referred to in her latest contribution.

And that is another subject the customers must get around to some day. The misues and dodgyness of statistics. Just why American duff stats should be applied to Oz is a mystery, if one is honest. Not a mystery if you anticipate chicanery. 

For anyone with the slightest knowledge of Australian company tax arrangements, they would have looked at that CBO table and thought the figures are just wrong.

Apart from being sourced from 2012 data, the first two columns give the game away. Australia’s statutory company tax rate is recorded at 30 per cent but the average rate is listed at 17 per cent.

But since we had a flat rate of company tax at that time, this figure for the average rate makes no sense; it is also 30 per cent. At that point, it becomes important to read the footnotes.

This is where we learn that what the CBO did was to compare average corporate rates for US-owned foreign companies with the rates faced by foreign-owned companies in the US. 

In other words, the table has nothing to do with the company tax rates paid by Australian companies or, for that matter, other foreign-owned companies, other than from the US.

I am reminded of the 1:4 women who are raped. That long-haired advocacy-driven Stat from a US feminist magazine quiz.  Just why anyone takes it seriously, yet we hear it all the time and in Oz public policy to boot. Well, almost everywhere. In Victoria it is 1:5.  It is safer for women in Victoria it seems. Must be something in the air there.

But that didn’t stop opposition assistant treasury spokesman Andrew Leigh, who should know better, from making the misleading point that Australia’s company tax rate is between the middle to the lower part of the G20 pack.

Clearly, these complications were beyond Verrender’s wit to grasp. He ended his misinformed piece of puffery with this Alberici-esque flourish: “As we’ve seen time and again, big corporations with the aid of the Big Four accounting firms look for the lowest rate of tax globally, domicile themselves there and shuffle their profits through those countries.

Hello. Read Lord Clyde. He's a Knight, like me.  

“It’s not about investment and it certainly isn’t about creating jobs or growth … Still, we race to the bottom.”

Where was his supervisor when this article was published last year? Where was the editor-in-chief? And where was the board?

Then there is Long’s lengthy campaign against the Adani coalmine in northern Queensland. It just beggars belief that his supervisor hasn’t told him to move on to other topics. His campaign to ensure that the mine never goes ahead has been relentless and completely bizarre at times.

Adani is a crook; the environmental conditions can never be met; Adani has already violated its environmental obligations; the project doesn’t stack up economically; the market for thermal coal is about to tank; the project will never get finance; the Chinese government would have to approve any loans; and the number of jobs that will be created is trivial. 

His blocking reasons, many imaginary, just go on and on.

This isn’t journalism; it’s just plain advocacy using the ABC platform.

Again, what have his supervisor, the editor-in-chief and the board been doing while this campaign has been unleashed on taxpayers who have no choice but to contribute to the funding of the ABC?

Then there is Janda, who goes by the title senior digital business reporter. Clearly, he thinks he’s a bit of a dab hand when it comes to investment and public policy matters, although often he seems to be simply regurgitating the lines fed to him by the likes of the left-leaning Grattan Institute and Tasmanian-based economist Saul Eslake.

In Janda’s world, the deduction of expenses associated with investing in an income-producing asset should be removed from the individual income tax code even though this has been a feature of our income tax arrangements since 1917.

According to Janda, it would be much better for first-home buyers if negative gearing were eliminated, even though there would be a minimal impact on house prices. 

Figure that one out, if you dare. How precisely will first-home buyers be better off?

He then takes the word of so-called experts that negative gearing doesn’t influence rent levels even though it is obvious that investors are motivated by post-tax returns on their investments. 

What he is claiming in effect is that the supply of rental properties doesn’t slope upwards (lower post-tax returns will reduce the supply of rental properties), which is a bold call for someone who doesn’t seem to even understand that he is making this claim.

Then there is his observation that while there are many more middle-income property investors using negative gearing — the teachers, the nurses, the ambos — than higher income property investors, the latter have larger loans. 

Gosh, that’s a surprise.

And no doubt they have read Lord Clyde.

Consider also the economic commentators who are regularly invited on to ABC Radio National and local radio. They are almost all cut from the same cloth: old-fashioned Keynesians, supporters of government intervention and distrustful of business.

Mind you, it is surely ironic that Jon Faine, local radio presenter in Melbourne, regularly invites Marcus Padley (of the Marcus Padley Newsletter) on to his show to talk about stockmarket developments. Talk about free, effective advertising for Padley.

And this is from an organisation that refuses to name stadiums by their rightful sponsors’ names because this would be a form of advertising.

Again, go figure.

The core issue that emerges from the Alberici affair is that ABC journalists are given free rein to campaign on their pet topics with insufficient supervisory control or oversight.

It was not always the case. ABC journalists regularly were refused permission to write opinion pieces and were cautioned if they overtly took sides on contentious policy matters. There is a strong case for returning to those arrangements. It is a public broadcaster, after all.

If ABC journalists want to campaign for their heartfelt causes, they should leave to set up their own sites or join the media outlets that might have them. We deserve better at the ABC.

We are fed junk by conmen and conwomen in our media. 

It is well to seek the truth, and ultimately The Truth.

I do not see it coming from the ABC, no matter how pretty the smile with which they deliver their cant, mendacities, lies and agitprop. 

Drink deep of Good Ale.

And say a prayer for Emma.

Pax