Money Finance News How to filter out the noise that is slowing economic reform
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How to filter out the noise that is slowing economic reform

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Good economic policy is being torn down via social media. Photo: Getty
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Former Turnbull government minister Peter Hendy made a good argument on Wednesday that one reason economic reform is grinding to a halt is because “social media makes it exceptionally hard to build and prosecute an argument”.

He wrote in the Financial Review: “… ideas can be hijacked by social media within hours and the turbo-charged negativity that comes with that social media can kill decent ideas for reform in as quickly as a 12-hour news cycle.”

Mr Hendy thinks that the “quality press” must do more to fight back.

He’s right, but there’s no going back to a world in which journalists and high-circulation mastheads were the fount of all knowledge.

‘Citizen journalists’ and informed readers have a crucial role in cutting through “crap”, as former PM Julia Gillard called it.

In the sphere of economics, that can be tricky. Many people are too busy with other roles to do their own research, and often their skill sets do not overlap with those of economic boffins.

There’s also the problem of voters becoming trapped in social media ‘echo chambers’.

Good policies should benefit wide cross-sections of the community, but how can that happen if voters, particularly in disadvantaged groups, are constantly clobbered with fake news?

As William H. Hutton, a US professor of media and information policy, wrote in The Conversation recently, “the least politically interested people and the least skilled internet users are most susceptible to fake news, filter bubbles and echo chambers online”.

That’d be younger voters, older voters, recent migrants, and pockets of disadvantage in the urban and regional landscapes – all groups courted by politicians with the help of social media activists.

So what questions should these people be using to protect themselves from “crap”?

Ask yourself – who am I?

The first is pretty basic: what is my life-stage and family situation?

That matters a lot because an indicator such as ‘mortgage stress’ is very different for a couple with two kids compared with an ambitious uni student scraping together repayments on a studio apartment.

Life-stage and family situation have been central to the argument over the Fair Work Commission’s recent penalty rate cuts. Those favouring the cuts argued that a 20-year-old living with their parents won’t worry about them too much, while those fighting the cuts have focused on struggling parents who will find them devastating.

So answering the basic question “who am I?”, though sometimes an unpleasant exercise in self-awareness, can cut through the spin.

Know about your slice of pie

The second question, which few people seem able to answer clearly, is how their own household budget is divvied up.

For instance, Australia’s eight-year political war over carbon pricing and energy prices is wildly out of proportion to what we spend, or might spend, on those two things.

Even after going “up and up and up”, as former PM Tony Abbott put it, domestic power bills are only our 12th largest area of household expenditure (see below).

By comparison, a small change in mortgage rates or food prices has a far larger impact – but where are the social media warriors then?

Real household incomes

The third big test of whether a piece of economic news is “crap” is what it will do to your real income, or to the real incomes of other Australians.

Healthy real-income growth means the combination of your rate of pay and hours worked are staying ahead of the consumer price index – that is, you can buy slightly more stuff this year than last, and hopefully not just by doing ever-longer hours.

Again, real income affects a worker’s wellbeing differently depending on life-stage and family situation. A part-time parent is not ‘doing it tough’ if their spouse is earning a good full-time wage. However a part-time solo parent or student may be.

Know how to vote for the reform you want

Very few voters put a party first on their ballot paper solely based on their own needs.

However, many are voting based on ideas that have been ‘liked’, ‘retweeted’ or shared without questions such as those above being asked.

The “quality press” used to ask those questions, and The New Daily works hard to continue that tradition.

But in the social media era, everyone needs to ask them before sharing “crap”. If we don’t, that’s all we’ll get in return.

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