As an old economics teacher, every now and then I read something and think: something here doesn’t quite smell right.
For months we have been told, almost relentlessly, that Australia’s economy is in dire straits. Debt is “out of control”. Government spending is supposedly reckless. Businesses are struggling. Households are being crushed. The Treasurer has lost control. A recession is perpetually just around the corner. Turn on the television, open a newspaper or scroll through social media and the message is remarkably consistent: economic disaster awaits.
So I did what I used to tell my economics students to do: I went looking at the numbers. And that is where things become rather interesting.
An article by economist and journalist Alan Austin in Independent Australia recently argued that there is a substantial disconnect between Australia’s economic data and much of the reporting about it. Austin’s language is considerably stronger than mine, but his central proposition was worth checking rather than simply accepting. So I checked.
Take government debt. The Commonwealth’s own financial statements reported net debt of $537.4 billion at the end of May 2026. Importantly, that wasn’t some carefully selected media estimate; it came from the Department of Finance. The same figures showed that the year-to-date underlying cash deficit was $10.9 billion, considerably better than the $18.5 billion revised budget profile for that point in the year.
Does that mean debt doesn’t matter? Of course not. Does it mean Australia has suddenly discovered the economic equivalent of the magic pudding? Obviously not. But some perspective wouldn’t hurt either. On the IMF’s internationally comparable measure, Australia’s general government gross debt is around 51 per cent of GDP — less than half the average for advanced economies and well below the G7 average. Australia certainly has debt, and governments are right to be held accountable for how they manage it, but describing our position as some uniquely Australian fiscal catastrophe simply isn’t supported by the international comparison.
Then there is economic growth. The latest ABS National Accounts show the Australian economy grew by 0.4 per cent in the June quarter and 2.1 per cent over the year. GDP per capita was 0.7 per cent higher over the year. That’s hardly an economic boom, and productivity remains a serious weakness, but neither is it the picture of economic collapse so frequently painted for us.
Employment tells a similarly more complicated story. Unemployment has risen and reached 4.6 per cent in August. That deserves attention. But employment also increased by about 39,500 people that month, participation reached 67.1 per cent and employment was still 238,100 higher than a year earlier. Again, not perfect. But not disastrous either.
Inflation is probably the clearest example of why economics should not be reduced to political slogans. Annual CPI inflation was 3.5 per cent in July, while underlying inflation remained higher than the Reserve Bank wants at 3.6 per cent. Wages, meanwhile, grew 3.2 per cent over the year to June.
Indeed, just this week the Reserve Bank increased the cash rate to 4.60 per cent, explicitly saying inflation remains too high. The RBA also noted that output growth has slowed and the labour market has eased. But in the very same statement it observed that business investment growth remains strong and that economic growth had been somewhat stronger than expected.
In other words, the real economic story is complicated, which is precisely the point.
There are genuine problems in the Australian economy. Housing affordability is appalling. Productivity growth is weak. Inflation is still hurting households. Interest rates are painful. Cost-of-living pressures are very real, particularly for people on lower and middle incomes. Nobody should pretend otherwise.
But acknowledging those problems is very different from pretending every economic indicator is flashing red. That is what bothered the old economics teacher in me.
Economics is about trends, comparisons, trade-offs and evidence. You don’t decide first that the economy is a disaster and then go searching for whichever statistic supports the headline. Nor should you decide that everything is wonderful and ignore evidence pointing in the other direction. Yet increasingly our economic debate seems to operate exactly that way.
Austin points to a series of extraordinarily gloomy headlines: “worst economic crisis”, “desperate Treasurer”, “sea of red”, recession warnings and the like, and contrasts them with indicators showing continued employment growth, investment and economic expansion.
That doesn’t prove some grand media conspiracy, but it does raise a perfectly legitimate question about selection and emphasis. Bad economic news is news, certainly, but shouldn’t unexpectedly good economic news also be news?
If unemployment rises, report it. If inflation rises, report it. If the RBA raises interest rates, report it prominently. But when GDP grows, when employment grows, when a deficit comes in better than its budget profile, when investment strengthens or when some economic indicators outperform expectations, shouldn’t Australians hear that too?
Constantly presenting one side of the ledger has consequences. People make decisions about spending, investment and employment partly according to how confident they feel about the future. Businesses do too. Economic confidence isn’t created by pretending problems don’t exist, but neither is it helped by treating every piece of economic news as another instalment in the apocalypse.
And there is another issue here. Governments should be judged on their economic record. Absolutely. They should be challenged when policies fail and scrutinised when the numbers deteriorate. But that judgement should be based on the whole record, not a collection of selectively gloomy headlines.
Perhaps that is the economics teacher in me again. If one of my students had presented an essay describing the Australian economy using only the statistics supporting their predetermined conclusion while ignoring everything pointing the other way, I would have written three words in the margin:
Where’s the evidence?
Maybe it is time we started writing the same thing in the margins of some of Australia’s economic journalism. The economy is not perfect, and no sensible person would claim that it is. But neither is the reporting of it.
Denise McHugh is an experienced educator in Tamworth. She is Chair of the NSW ALP Education and Skills Committee and Deputy President of the Independent Education Union (IEU).
All opinion and comment on New England Times Engage is the opinion of the writer and not New England Times.
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