Over the past few weeks we’ve seen the roll-out and the fall-out of the Australian Federal budget. The haggling, the squabbling over numbers, the punches and the counter punches. But amongst it all something happened which has been burning under my skin for a week or so now, and it’s time that I wrote about it properly.
We all routinely accept that politicians spin and use numbers as they see fit. But when half-truths are spun as fact I think this borders on more than reckless or irresponsible behaviour.
It should be classified for what it is: an outright and deliberate deception.
Why this annoys me so much particularly is that there are a half-dozen or so government and legislative bodies setup to protect consumers from these exact same actions – if they were made by companies. Marketers and advertisers for organisations around Australia have to abide by dozens of regulations, rules and laws which vary from industry to industry to sell their products and services.
If companies presented ‘facts’ the same way both sides of politics do there would be outrage. If companies released information this way to the ASX, or in their marketing and advertising of the products and services they provide the organisations in question – particularly in the financial services industry – would be bang in trouble.
Not only would they be openly panned by all members of the media and government. Regulatory bodies whose job it is to protect consumers, such as the ACCC, ASIC and the Advertising Standards Bureau from deceitful or false claims by companies, would investigate and probably fine the company(ies) that made them.
The particular comment that sparked all of this for me, was in the Federal Government’s response to the Opposition’s proposal in the budget reply to leave the private health rebates the way they are and instead increase the excise (taxation) of tobacco by 12.5%.
The federal government came out all fists flying saying that there was actually a $3 billion hole in the Opposition’s plan as they hadn’t accounted for what would happen over a 10 year period and therefore their budget proposal was much better. However the budget and the budget reply were only projecting costs and benefits over a 5 or 6 year period, something the federal government failed to mention when touting their numbers against the Opposition.
Essentially the federal government was comparing an apple with an orange without any effective disclosure. Companies can’t get away with this for products people choose to buy, so why should a government when they’re planning on universally implementing something that we, as the consumers, have no choice about?
As we’re talking about billions of dollars, lets take this issue at the pointy end. Let’s assume that we’re talking about two companies, in financial services. Lets compare two loans which present virtually the same benefits and have virtually the same interest rates and fees. What would both banks marketing and advertising have to disclose?
Do you think Bank A should get away with the following:
Bank A prepares an advertising campaign comparing their $100,000 loan product with Bank B’s. Bank A’s loan goes for five years. Bank B’s goes for 10, all other aspects of the loans are virtually identical in their net result.
Bank A’s campaign proclaims loudly and proudly that their loan will save the consumer much more money by comparing their loan against Bank B. But Bank A fails to disclose that the comparison loan from the competitor runs twice as long and the only difference is the interest charged over that period.
How long do you think Bank A would get away with this? – Lets face facts the campaign wouldn’t even make it to market. In-house lawyers would block it outright. And even in some unlikely scenario it was approved – it wouldn’t take long until multiple regulatory bodies come down on them like a tonne of bricks.
Given all the scrutiny put on the marketing and advertising of everything from packets of peanuts to announcements to the ASX about trading on peanut producers I think it’s time for some rules and regulations around the promotion and dissemination of information from government departments when comparing them with other proposals or basing them on published reports.
With both sides of politics routinely expecting and asking more from companies about disclosure so shouldn’t we, the Australian public, as their consumers, expect more from them too?