Oops, Treasurer Jim Chalmers has been caught out telling a ‘lie’ that only an economically trained country might pick up. To put it respectfully, this faux pas reminded me how switched-on Australians are to economics.

After escaping academia in 1991 to go into the media and later financial planning, I’ve always been fascinated about how interested Aussies are in the big subject of economics, you know, inflation, interest rates, unemployment, the value of the dollar and economic growth.

And we’re even more stock market interested because our retirement incomes and wealth largely depend on stock prices over time via our big commitment to superannuation.

For this increased awareness about economics and money, I blame (or more correctly thank) Paul Keating, who was the power force behind deregulation of the dollar and financial services, as well as the dismantling of excessive trade protection.

This helped change the attitudes of unions and businesses and partly explained why we grew without a technical recession from the early 1990s until the pandemic in 2020 changed all that. However, even that one only lasted two quarters!

This is what the New York Times wrote about us in September 2020: “Australia’s economic engine has run without a major hitch for nearly three decades. Propped up by rich natural resources, fast-growing trade with Asia, a talented work force and vibrant immigration rates, the country even avoided stumbling during the 2008 global financial crisis.”

But the Coronavirus changed all that. “…Australia officially fell into recession — defined as two consecutive quarters of negative growth — for the first time since 1991. Australian officials said the economy shrank 7 percent during the three months that ended in June, a steeper fall than the previous quarter and its worst performance since the government began keeping records in 1959.”

After that time, for reasons I’m not certain about, we’ve been served up a lot of economics. I’ve never come across a country where all TV channels covered the annual Budget! This happened until recent times but even now the annual bookkeeping exercise by the Treasurer gets prominent media exposure, with newspapers and related websites leading the charge to educate us economically after the Budget is revealed on the second Tuesday in May.

Who knows that kind of date? People who’ve been educated in matters of money! I’ve always been surprised to realise that countries we compare ourselves to, such as the US, UK and EU countries, don’t give the economy and events such as the Budget and the monthly interest rate meeting of the Reserve Bank such media prominence.

I think it’s a good thing. But it means our political masters must be careful about what they tell us, because we’re a tough audience.

It’s why Ben Fordham on 2GB this morning wanted me to look at a ‘mistake’ Treasurer Jim Chalmers made. Economic ‘errors’ by the likes of Dr Jim in a more economically savvy place like Australia (in the age of Twitter or X, Facebook and so on) can lead to the creation of a big story out of something that the media in other countries might ignore.

What was the mistake?

Well, some would have it that Dr Jim ‘lied’ when he told us via Twitter that under the Albanese Government the average worker was earning around $3,700 a year more and that was his government’s plan “to ease the cost-of-living pressure”.

But Sky News reporter Amy Landsey says reactions on Twitter’s Community Notes saw a surge of angry Twitter users point out the error in his economics. (Twitter says: “Community Notes aim to create a better-informed world by empowering people on Twitter to collaboratively add context to potentially misleading Tweets”.

The fact-checking saw this assessment of Dr Jim’s tweet. “When wages rise at a slower rate than the rate of inflation, real wages decline,” the fact check read. “Wages in Australia increased by 3.6% over the last year, however, the inflation rate during the same period was 6%. Wages may have gone up, but they didn't compensate for the cost of living."

So, to sum up, Dr Jim didn’t actually tell a ‘lie’ because statistics on money wages for the average worker tell us that they have risen by $3,700 a year, but in real wages terms, the average wage earner is poorer not richer. Money wages tell you what a worker was paid, while real wages when adjusted for inflation show us what we can actually buy!

If inflation rises faster than money wages, you can buy less. And that’s why Dr Jim has copped it. I reckon only in an economically savvy place like Australia would the nation’s number one bookkeeper be accused of telling a ‘lie’ by not addressing the real wages story.

If it was a lie, as Christine McVie of Fleetwood Mac might have sung, it was no more than a “tweet little lie!” Mind you, as someone who has been a part of the group that has economically educated this country, along with the likes of Ross Gittins, Alan Kohler, Ross Greenwood, Effie Zahos and others, and I can’t leave out our celebrity banking economists like CommSec’s Craig James and AMP’s Shane Oliver, it makes me a very proud economist/educator to see my country so economically interested.