ABC News is showing its extensive audience that growth in gross domestic product (GDP) currently ranks third in the world. The ABC knows this is false. Yet this “news” is still visible on the ABC’s website. Alan Austin reports on another case of politically compromised data.
This graph published on June 2 was sourced to Deloitte Access Economics, a multinational consultancy firm paid large hundreds of millions of dollars by the Morrison Government for various services. Deloitte is one of the world’s largest firms engaged in minimising taxes and maximising the profits of large corporations.
When a formal complaint was first lodged against this deceptive graph and the falsehoods in the accompanying text, ABC News’ business editor Ian Verrender replied that he had “no issue with our reporting of the Deloitte study. It was an accurate reflection of their findings.”
Of course it was. But Deloitte’s findings were false on several levels. And the ABC, as with other news outlets, routinely fails to disclose the Government is Deloitte’s biggest client.
Dodgy data
First, the data shown in the chart is not accurate. The top five countries shown are China, Chile, Australia, Romania and Lithuania, in that order.
At the time of publication, Romania’s growth over the five quarters was 0.86 per cent, higher than Australia’s 0.82 per cent. Lithuania’s was higher still at 0.90 per cent. (Lithuania’s growth over that period has since been revised upwards further. But that does not impact this analysis.)
Several other growth figures are also incorrect. Israel was -0.44 per cent which ranks seventh, not 16th. Indonesia was -3.05 per cent which ranks 18th, not eighth.
The graph fraudulently shows Australia ranking third in that group when it clearly ranked fifth at the time of publication – in that selected group.
Cherry-picked countries for comparison
But it is much worse than that. The greater issue here is the selection of those countries – with no apparent rhyme or reason. They are not all OECD members, they are not in the same UNDP development category, they are not from Australia’s region, nor trading partners, nor are they chosen by economy size nor on any other valid criterion. It is a hand-picked list, apparently intended to deceive.
Comparable countries missing include Ireland, Estonia, Luxembourg, Taiwan, Hong Kong, Vietnam and Turkey. And guess what? All these had higher growth over the five quarters than Australia. So did several others arguably less comparable.
A more honest chart would have compared all economies classified by the UNDP as having high and very high development. On this list of 77 economies for which data is available, Australia ranks 15th. Not third. See blue chart, below.
To be fair to Deloitte, not all 14 countries ranking higher than Australia had released their first quarter 2021 data when their chart was published. But many had, certainly enough to show Australia was nowhere near third. They had all released their data by the time the ABC had to decide whether or not the Deloitte graph was deceptive. It was, they should have, but they didn’t.
But wait, it gets worse still.
When did the pandemic hit economies?
Why did Deloitte measure the growth over five quarters starting at December 2019 instead of over four quarters starting March 2020? For most countries, the pandemic had little economic impact until the second quarter of 2020, or very late in the first quarter.
Job numbers in Australia climbed to an all-time high in January 2020, then a new high in February and remained virtually unchanged in March. The first significant decline in job numbers was in April 2020.
The same pattern is evident in Belgium, Chile, Costa Rica, Denmark, Estonia, France, Greece, Hungary, Ireland, Japan, Lithuania, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Spain, Switzerland and elsewhere. All these economies had higher March 2020 job numbers than in March 2019.
On GDP changes in the 2020 first quarter, many developed countries experienced a decline. But not all. Positive growth was recorded in Romania, Bulgaria, Turkey, Bosnia and Herzegovina, Chile, Bolivia, Paraguay and elsewhere – despite the ravages of the pandemic.
In countries which did contract in the 2020 first quarter, it is not clear this was due to the pandemic. Most were in decline anyway through 2019, with Germany, France, Japan and more than twelve other developed economies having gone backwards also in the fourth quarter of 2019. That was not due to the pandemic. The decline in the following quarter may not have been either.
Annual growth in GDP over four quarters
So what would have been the results if Deloitte and ABC News had performed the simple, straightforward task of comparing annual GDP growth rates from Q1 2020 to Q1 2021, which is what economists normally do?
Among the 77 high development countries, Australia’s puny 1.11 per cent annual growth ranks a miserable 27th. If we narrow this down to the 38 OECD member countries, Australia ranks eleventh.
So it doesn’t matter which group of countries we choose or what time period we examine. Australia is nowhere near third.
The ABC offered no satisfactory answer to the question why it had omitted Ireland, Estonia, Luxembourg and Turkey from its chart. MWM contacted the ABC’s head of media Sally Jackson with two questions to news director Gaven Morris.
The first asked why ABC News relies on Deloitte for information, given court judgments confirming its “outrageous and contumacious” conduct and its failure to “act with integrity and objectivity”, its millions in fines for serious dishonesty in several countries and the multiple integrity matters currently being pursued in Australia’s courts, as outlined here:
Court actions against Deloitte, EY, KPMG and PwC (afr.com)?
The second asked why Deloitte’s graph has not yet been removed, or flagged as fraudulent, given it clearly is.
That was on 28 July, more than two weeks ago. Should we receive a reply, this report will be updated.
Editor’s Note: the ABC typically has a higher standard of fact checking and independence than its commercial media peers and the story in question did source Deloitte. Media however generally fails to pick up and disclose conflicts of interest when citing external analysis.
Alan Austin is a freelance journalist with interests in news media, religious affairs and economic and social issues.