Scott Morrison economic reform

The Presentation Fallacy continues to plague economic debate in Australia — and not in a good way for conservatives.

For a long time after the financial crisis, most of us lamented that the dearth of economic reform in Australia was because politicians lacked the ability to sell it effectively. Most of us saying that had been around in the Hawke-Keating era, so we’d been imprinted with the idea of the genius politician talking the community to a reform nirvana. If only Wayne Swan and Julia Gillard/Joe Hockey and Tony Abbott/Scott Morrison and Malcolm Turnbull would more effectively present reform, all would be well.

But we’d ignored data that didn’t fit the facts. John Howard — supposedly another courageous reformer — had lost government because of WorkChoices, despite frantic efforts to sell the original version, and then a watered-down version cobbled together in a panic. The problem with WorkChoices wasn’t the presentation — on which the government lavished over $100 million — but the product itself. We also ignored that the media environment of the Hawke-Keating era had long since fragmented into the communications equivalent of crazy paving.

The Presentation Fallacy (that we could have lots of reform if politicians communicated better) is a convenient blindfold that means you don’t have to look at the fundamental question of why voters need brilliant communicators, marketing campaigns and manipulation to believe something is good for them. For political elites — and I’ve been one of them — it can seem a mystery why voters won’t support things that are allegedly in the national interest. But, in effect, we were asking them Groucho Marx-style who they were going to believe: a slick marketing campaign, or their own lying eyes? As they contemplated soaring power bills, falling wages and corporations paying little tax but hefty executive remuneration, the Presentation Fallacy held that they could be convinced with some better talking points.

A while ago many of us started to work out the product was poor, not the packaging. Even the Reserve Bank has worked this out. As Philip Lowe said in June, “slow wages growth is diminishing our sense of shared prosperity. If this remains the case, it can make needed economic reforms more difficult.” Good luck trying to find an effective communications strategy for slow wages growth. The remedy is to speed it up, not spin it.

But in the wake of the weekend byelections, the Financial Review opined “the pressing issue now for the Coalition is just how to make its economic argument more compelling to cut through the untruthful Labor narrative about a rotten unfairness and increasing inequality.” The Australian the following day lamented “many of the lessons relate to selling a message”.

Now The Oz’s top bloviator, Paul Kelly, complains that the government “has been unable to sell the idea that proper funding of health and education depends on economic growth or that having a competitive corporate tax system is essential to growth and jobs.” 

The Oz editorialised that “the Coalition needs to embrace and win the inequality debate: increased growth, lower taxes, reduced power prices and extra jobs help to push inequality down further. Company tax cuts, too, are designed to create more opportunity. Make the case with facts.” 

The problem is, voters know the facts perfectly well — in particular, how their wages have stopped growing and, in the private sector, gone backwards, despite constant promises from the political class that growth was around the corner. And that’s happened at the same time corporate profits have surged and executive remuneration has grown seven times faster than the pay packets of ordinary workers.

Over the last three years, both parties have been forced to shift in response to a growing sense within the electorate that the economy is working for corporate elites, not for them. But the Coalition has only done it when forced politically, while persisting with neoliberal policies like its company tax handout that will worsen inequality and, contrary to Kelly’s silliness, undermine funding for health and education.

Labor has shifted across the breadth of its policies, focusing on protecting wages and bolstering health and education funding. Labor will be very happy if the right continues to believe that all it has to do to restore neoliberalism is to hit on some killer lines for a press conference.