McCrann backs Henderson in making up facts
Terry McCrann, the writer well qualified to cover economics for the Herald Sun and Daily Telegraph, has found time to leave the Sandown dog track to come to the defence of Gerard Henderson who made a series of humiliating factual errors in an article he wrote for the Sydney Morning Herald a few months ago.
McCrann’s comment, which was published on Henderson’s webpage, is reproduced below in blue.
It is cute to see McCrann’s comment come in the same week that HSC students sat their economics exam. If McCrann’s effort was an essay in that exam, I suspect he would have trouble getting a pass mark from even a generous examiner.
Like Henderson, McCrann delivers a few howlers, he fails to understand the context of my initial comment on Henderson misleading his readers with factual errors and he possibly pressed some wrong buttons on his calculator when trying to make a point.
So, here we go.
McCrann claims that I sprung “to the defence of the 1974 Whitlam budget”.
Sorry Tezza. As I pointed out to Henderson, at no stage did I ever provide a critique of the economic record or Budget settings of the Whitlam government. I was simply pointing out to Henderson the factual errors in his article that happened to cover the fiscal settings of the Whitlam era.
Not a good start.
Next up, McCrann says: “Koukoulas thundered that your [Henderson’s] ‘howler of howlers’ was to claim the budget deficit increased substantially in 1974-75. When instead, the government recorded a budget surplus.”
McCrann goes on: “Actually … the 1974-75 budget had a deficit of $2.57 billion. In today’s terms, that does not sound much, but it was equivalent to 4.3 per cent of that year’s GDP. Today such a deficit would be around $65 billion.”
Whoopsie Tezza. It the 1974-75 budget delivered a surplus. The current Budget documents, at Budget Paper No 1, Statement 10, Table 1, page 10-6 shows that the 1973-74 Budget recorded a surplus of $1.150 billion or 1.9% of GDP which was followed by a SURPLUS of $181 million in 1974-75 or 0.3% of GDP.
Surplus, not a deficit.
Treasury have noted for many years that “data have been revised … to improve accuracy and comparability through time.” And before Mr McCrann does a Jack Welsh and accuse Treasury of fudgng the numbers to suit some agenda, a quick glance at the 2000-01 Budget papers, delivered by Peter Costello some 12 years ago, recorded the fact that the 1974-75 Budget was in surplus.
To his credit and as his should, McCrann has often cited and used revised data in his columns. To my knowledge he has done this without question. It is clearly best to use the most up to date facts when assessing economic events. On the issue of the Budget numbers and the Whitlam Government, McCrann strangely rejects the accurate and up to data information. I suspect he has an agenda which is based on bias and not factual evidence. More of that below.
This is where McCrann’s next humiliation comes. He notes that “Back in 1974-75 though, the Whitlam budget lifted government spending by an almost incomprehensible 45.8 per cent in a single year. Koukoulas claimed it was “only” 39.6 per cent.”
Terry, get out your calculator and type in the following:
Government spending in 1974-75 was $15,463 billion. Divide that by government spending in 1973-74 which was $$11,078 billion. After you do that, subtract 1 then multiply by 100 to get the percentage change.
What do you see Terry?
I make it 39.6%. If you pressed the correct buttons, you would too!
I am not sure where McCrann’s 45.8% comes from (other than it was used by Henderson) but that sort of error is almost incomprehensible!
Next McCrann kicks a series of own goals. He notes: ‘Showing just how clueless he is, Koukoulas ridiculed the difference between your [Henderson’s] reference to the increase being almost 50 per cent and his “correct” figure for the increase, as – “worth around $36 billion in a single year”.
Well Terry, I am right. While you have your calculator there, follow these instructions:
50 minus 39.6 equals 10.4. That is the percentage difference between Henderson’s claim that spending rose by almost 50% and the fact that it rose 39.6%.
Terry, then take the 2012-3 outlays from the budget papers which are $364.208 billion and add 10.4% (Henderson’s error).
That is 364208 times 1.104 which equals 402086.
Then take 364208 from 402086 and you get 37878.
This means the difference between the made up 50% growth number and the 39.6% fact is, in 2012-13 dollar terms, $37.878 billion. Allowing for the “almost” in the almost 50% used by Henderson and McCrann, the error is somewhere around $36 billion or $37 billion in today’s dollar terms.
It looks like I am right again.
McCrann then makes up some of his own points for arguments sake, it seems, by saying “Being completely unaware that his [Koukoulas’] 39.6 per cent would be like lifting budget spending now by a mind-numbing $140 billion or so in a single year.”
Here McCrann brings into the argument some bizarre figuring that has nothing at all to do with my pointing out of Henderson’s howling errors in the original article about the Whitlam government. (I do note that government spending will fall by a record amount in 2012-13 when we see the MTEFO numbers soon, but you won’t see McCrann covering that inconvenient fact I am sure.)
Then poor old Terry, who since his days covering greyhound racing for the Truth (I think, but I am happy to be corrected) has only ever written a few hundred words every second or third day for the economic journals of choice for economists who follow greyhound racing, says: “Koukoulas’ … [has] just taken his numbers out of the current budget papers. These are a reconstruction of the real numbers, to try to put them on the same basis as the way the modern numbers are done. To my mind, the real numbers are, well, the real numbers.” (My emphasis.)
Oh Terry! Here is McCrann emerging from his kennel to slag and bag me for using the latest, most up to date numbers available. Huh? Like Henderson, McCrann prefers some other numbers, one’s he calls the real numbers because they are, “well, the real numbers”.
This has to be one of the more remarkable comments in McCrann’s illustrious but obviously rapidly fading career. He doesn’t believe the current data. It doesn’t fit his bias. Maybe McCrann needs to go down the same path as Alan Jones and have someone check his facts before he goes to print.
Maybe McCrann is living in the era of a Bex and a good lie down. Maybe he doesn’t believe the new fangled medicine because it’s not real medicine.
McCrann obviously has a problem with facts or at least the facts that don’t fit with his biases. I wonder how many other facts he has made up over the years as he works to lead his readers down the garden path.
CORRESPONDENCE: TERRY MCCRANN CORRECTS STEPHEN KOUKOULAS’ HOWLERS ON THE WHITLAM LABOR GOVERNMENT
Terry McCrann to Gerard Henderson – 19 October 2012
Gerard, it takes an impressive level of clueless stupidity for even a Labor apologist to spring to the defence of the 1974 Whitlam budget – the budget that defined that government as the worst and most destructive in Australia’s history. Until that is, first Kevin Rudd came along to top even Gough Whitlam in sheer bumbling awfulness. For him of course, subsequently to have to cede the title of Australia’s worst ever prime minister, to Julia Gillard.
But up stepped former Gillard advisor Stephen Koukoulas to pompously ridicule your criticisms of the 1974 budget and the numbers you used [See MWD Issue 158]. And get it absolutely and totally wrong. Apart from one minor mistake, which you have acknowledged, your numbers were correct.
Koukoulas thundered that your ‘howler of howlers’ was to claim the budget deficit increased substantially in 1974-75. When instead, the government recorded a budget surplus. Actually, and I quote from the 1975 budget papers, the 1974-75 budget had a deficit of $2.57 billion. In today’s terms, that does not sound much, but it was equivalent to 4.3 per cent of that year’s GDP.
Today such a deficit would be around $65 billion. Fancy, that, much like the deficits that Gillard and her treasurer Wayne Swan, who Koukoulas used to, ahem, advise, have presided over. And they’ve done it every year. Back in 1974-75 though, the Whitlam budget lifted government spending by an almost incomprehensible 45.8 per cent in a single year. Koukoulas claimed it was “only” 39.6 per cent.
Showing just how clueless he is, Koukoulas ridiculed the difference between your reference to the increase being almost 50 per cent and his “correct” figure for the increase, as – “worth around $36 billion in a single year”.
Being completely unaware that his 39.6 per cent would be like lifting budget spending now by a mind-numbing $140 billion or so in a single year. Something I think that even the team of Koukoulas, Swan and Gillard would draw some breath at.
Koukoulas’ mistake was the simple one of someone that understands little of budgets and even less of history. He’s just taken his numbers out of the current budget papers. These are a reconstruction of the real numbers, to try to put them on the same basis as the way the modern numbers are done. To my mind, the real numbers are, well, the real numbers, and are as I and you have stated.
Koukoulas exposes himself by making a snide reference to the author of the source you quoted. W.E. (Bill) Norton was a distinguished head of the Reserve Bank’s research department – an economist who actually knew what he was talking and writing about. Unlike your unfortunate correspondent.