Fifty years ago, I found my dream job – and I’m not done yet

If a genie ever sprang from a bottle and offered me one wish, it would be to have a job as a columnist on the biggest and best newspaper in the country, The Sydney Morning Herald. If he offered me a second wish, it would be to have my columns also published in the country’s other great newspaper, The Age.

For the first seven years after I left school, I worked to achieve my dream of becoming a chartered accountant. Not any old accountant, a chartered accountant. Unfortunately, by the time I achieved that exalted qualification, I’d realised I didn’t enjoy being an accountant and wasn’t particularly good at it.

I had a premature midlife crisis at the age of 24 and, after some casting around, on February 7, 1974, found myself as an over-aged cadet journalist on the Herald.

It took me only a few weeks to realise I’d stumbled into the only job I’d ever want. One I was good at and found greatly interesting and rewarding. I’d dropped a lot of money to become a mere cadet, but that didn’t matter. I was the square peg that had fallen into a square hole.

I wasn’t much good as a reporter, but the old boys who ran the Herald had the wit to steer me towards the feature and column writing I was good at. After three years, and having written many unsigned editorials, I got my first column. A year later, I was made economics editor, and by 1983, I had the three columns a week that I’m still writing, on the same day and in the same section of the Herald, 40 years later.

That’s all you need to know to see why I’ve stayed in my job at the Herald for 50 years, ignoring the usual retirement age when it flashed past 11 years ago. I’ve never been able to think of another paper I’d prefer to work for or another job I’d prefer to have.

Editor of the Herald? I have a lot more fun than he or she does, with much less responsibility.

Doing it my way

Perhaps because I was older and starting a second career, or perhaps because my upbringing in that strange uniformed Protestant sect, the Salvos, had made me a bit of a loner, I decided to join Frank Sinatra and do it my way.

I wouldn’t try to impress my peers, or even the editor, but would write a column that better met what I thought the readers were looking for. Later, I realised this could be my moral compass: Serve the Reader.

Because nature had intended me to be a teacher, I decided that, while all the others were off chasing scoops, I’d concentrate on explaining to the reader what on earth it all meant. I’d try to figure out how the economy worked, and when I’d got something figured, I’d tell all.

Because economics has so much potential to be boring, I’d pull every trick I could to make it simple and readable. I’d write in the first person, in an easy, conversational style. I’d even put myself and my doings in the story.

Because the world gets ever-more complex, I’d try to ensure the young people we hired to write about the economy had some formal education in the topic. Then I’d teach ’em the tricks of the trade. I’ve had the privilege to mentor a couple of dozen of the Herald’s ablest recruits.

An unrecognisable economy

Over 50 years, I’ve written well over 5000 columns, and worked for 16 editors – one of whom lasted for about 24 hours. I’ve covered 50 federal budgets, 19 federal elections, and seen 11 prime ministers and 16 treasurers come and go, starting with Gough Whitlam and Frank Crean, Simon’s dad.

In that time, I’ve seen huge changes in the economy, in politics and economic policy, not to mention – which I will – changes at the Herald. One of the latter is that, these days, newspapers prefer to refer to themselves as “mastheads”, in recognition that far more of our readers do so on our website than on dead trees.

I want to recall some of those changes, so let’s start with the shape of the economy. If a Rip Van Winkle fell asleep in 1974 and woke in 2024, I doubt he’d recognise our economy.

Every economy is changing continuously, partly because our customs and practices change and partly because government economic policies change. But the greatest source of change is advances in technology, and the past 50 years have seen the spread of computers, a revolution in telecommunications and the birth of the internet.

When I was first in the workforce, everyone was paid weekly, in notes and coins stuffed into little brown envelopes. Any money you didn’t want to spend immediately had to be taken to your particular branch of your bank, with your deposit recorded by hand in a little passbook.

City workers would go out in their lunch hours to pay their utility bills in cash at the company’s office. Bills came in the mail, and you’d write a cheque and post it back. In 1974, the banks combined to introduce the first credit card, Bankcard.

You had to beg your bank to lend you less than you really needed to buy a home. Until the Whitlam government’s Trade Practices Act of 1974, it was legal for businesses to collude in setting the prices they charged, or agree to carve up the territory between them, limiting competition.

The prices of bread, eggs and petrol were set by the state government. You bought your electricity from a government monopoly. Annual inflation of consumer prices averaged 10 per cent in the 1970s and 8 per cent in the ’80s.

People stay a lot longer in the education system than they used to, and emerge with higher qualifications. This is related to the much bigger role that women now play in the paid workforce. More girls are staying longer in education, doing better than boys academically, and getting a growing share of the good jobs.

Over the past 50 years, the size of Australia’s workforce has far more than doubled, to well over 14 million, while the industry structure of the economy has changed greatly. In round figures, agriculture’s share of total employment has fallen from 7 per cent to 2 per cent. Despite successive resource booms, mining’s share has risen only from 1 per cent to 2 per cent.

Manufacturing’s share has fallen markedly from 22 per cent to 6 per cent. With construction’s share unchanged at about 9 per cent, that means the services sector’s share has jumped from 61 per cent to 81 per cent – something that has favoured the increased employment of women.

The huge decline in the proportion of workers needed to grow, dig up or manufacture goods is explained by continuous advance in labour-saving technology. But where have the many additional jobs in the services sector come from? They’re mainly in health and aged care, education, and professional, scientific and technical services.

My career at the Herald has seen many major changes in government policies, though most of these presumed “reforms” occurred long ago under the Hawke and Keating governments. First came the decision in December 1983 to allow the Australian dollar to float, then the deregulation of the banks and, later, many other industries.

The removal of the high import duties protecting our manufacturing industries was begun under Bob Hawke, but completed under John Howard. But this does less to explain the declining employment in manufacturing than many imagine. Automation and the rise of China should get more of the blame – or, for consumers, the credit.

The privatisation of government-owned businesses began under Hawke-Keating, but continued under Howard and state governments of both colours. The outsourcing of government-provided services, a much more debatable “reform”, continues to this day.

For many of my early years as a commentator, our centralised wage-fixing system delivered pay rises of the same percentage and on the same day to virtually every worker in the country. People like me wrote unceasingly about the evils of excessive wage rises.

At the time, I thought Keating’s move to wage bargaining at the enterprise level a big improvement. Now, having seen the way employers have used the less regulated system to chisel workers’ wages, I’m less sure about that.

Do you realise that in 1974, all capital gains and employee fringe benefits were untaxed? Keating’s reforms in 1985 changed that. And Howard’s introduction of the goods and services tax in 2000 gave us the same sensible indirect-tax system most other rich countries had long had.

We had spent a quarter of a century trembling at the thought of such a tax since it was first proposed in the Asprey report of 1975. Today, it’s no big deal.

Labor gets the credit for introducing our first universal healthcare system, and compulsory employee superannuation which, more than 30 years later, ensures most couples will live more comfortably in retirement than they would under just the age pension.

Palace revolutions and digital disruption

But now, a remembrance of a topic no other people still working on the Herald can say they lived through at close quarters: the many changes at this august organ.

I’ve hung around long enough to see all the palace revolutions that have progressively turned this 193-year-old paper from being owned by the two branches of the Fairfax family – each led by cousins, Sir Warwick and Sir Vincent – to now making up about a third of the Nine Entertainment media conglomerate.

I wasn’t here long before, at the urging of management, the ageing Sir Warwick was replaced as company chairman by his elder son, James. James was far less interventionist, allowing the editors of the various papers to make their own decisions and leading, I believe, to Fairfax’s Golden Age.

But the retirement of a powerful general manager soon saw the Herald’s new editor-in-chief, David Bowman – who’d done most to advance my career – deposed and replaced by the former managing editor of The Australian Financial Review and The National Times, Vic Carroll.

Urged on by the new chief editorial executive, Max Suich, Carroll set about belatedly dragging the Herald into the modern age. I hate to admit it, but the great transformation of Australia’s broadsheet newspapers was spurred by the advent in 1964 of Rupert Murdoch’s startlingly clean, good-looking and energetic national broadsheet, The Australian, when I was still a schoolboy. Under its great reforming editor Graham Perkin, The Age was the first quality paper to take up the challenge.

When I joined in 1974, and until Carroll began his changes in 1980, the Herald’s failure to move with the times was reflected in its declining circulation. It saw its mission as ensuring news was reported the way it always had been.

Its language was very formal and its reporting largely devoid of explanation, context, interpretation or emotion. I concluded that the chief subeditor saw his job as taking a story and draining all the colour out of it, to make it fit for publication.

Most news stories were anonymous, being “by a staff correspondent”. We were committed to being “a paper of record”, which meant keeping stories short so as to cram in as many as possible. This produced a paper that was black and white in both senses and visually messy. It simply failed to match the competition coming from radio and, particularly, television.

Carroll changed all that. While he was at it, he reformed me – more with kicks than pats on the head. He freed me from my self-imposed duty to ensure my economics fitted with the proprietors’ commitment to endorsing conservative governments before elections.

Since Carroll, my opinion really is my opinion. He was, without doubt, the best of all the editors I’ve worked for.

Not many years later, we were hit by ructions within the Fairfaxes, as Sir Warwick’s other son by a different marriage, Young Warwick, sought to avenge his father and please his mother by borrowing heavily to buy up all the company’s shares, paying far more than they were worth.

His new managers closed our afternoon paper, The Sun, and sold off whatever assets they could, but it was no use and by 1991 the company was in receivership.

The business continued to trade as normal, and remained profitable, but not sufficiently profitable to cover all the money Young Warwick had borrowed to buy it.

Kerry Packer’s plans to buy the business failed to eventuate – thanks to the machinations of some financier called Malcolm Turnbull – and the Canadian media baron Conrad Black ended up with a minority but controlling interest.

Keating wouldn’t allow a foreigner to increase his interest in the company, so Black eventually sold out. Like so many Australian companies, Fairfax’s ownership ended up being shared between a host of superannuation funds and other “institutional investors”, making it a plaything of the stock exchange.

All this, however, was nothing compared with the challenge from the digital revolution. At first, the move from typewriters to screens, and from “hot metal” to digital offset printing was just a nice money-saver. We were able to greatly reduce the number of printers we employed, move our printing plant to the outer suburbs and escape all the “restrictive work practices” – lurks and perks – of the militant printers’ union.

But then we – like every newspaper – discovered that the rise of the internet had taken away most of our advertising revenue. Before the revolution, every big city had a broadsheet newspaper with a virtual monopoly over classified advertising. A monopoly it exploited to the full.

This “river of gold” kept Fairfax profitable, even though most of the money was used to employ more journalists and compete for the best journalists by paying them well.

But when it became obvious that people wanting to sell houses or cars, or fill job vacancies, could do much better by advertising on the net, the river of gold ran dry.

From the beginning, newspapers’ business plan had been strange but simple: use your news to gather an audience, then charge advertisers for access to your audience. To maximise the audience, keep the paper’s cover price nominal.

At first, we – and other newspapers around the world – just tried to move the same formula online. We put all our editorial content online and freely available, hoping to attract enough digital advertising. We tried using “clickbait” to get as many people momentarily clicking on our site as we could.

It didn’t work. Eventually, we realised that almost all the digital advertising revenue was being scooped up by Google and Facebook. Following the lead of The New York Times, we moved to putting much of our online content behind a paywall and charging readers a subscription for access to it.

Since the internet remains replete with free news, it’s a business model that works only if your news is different and better than the free stuff.

I was never confident a company as old as Fairfax could bring itself to make the radical changes necessary to survive in the strange new world of digital news. Without the classifieds’ river of gold, we had to lose a lot of journalists, cut a lot of costs and change a lot of practices.

I give much credit to former Fairfax chief executive Greg Hywood – a former editor-in-chief of the Herald, who I’ve known since we worked in adjoining offices in the Canberra press gallery in 1975 – for ensuring the survival of the Herald and other great mastheads.

Some other chief executive might have secured the company’s survival by ditching all those terrible old newspapers, but Fairfax without its mastheads was of no attraction to a life-long journo like Hywood.

Ably assisted by Antony Catalano, who belatedly established Domain to capture a large chunk of the online property classifieds market, Chris Janz, who devised the mastheads’ rescue plan, and Michael Stevens, whose one goal is to prolong the life of our print editions (and is the man to credit – or blame – for attracting all those Harvey Norman ads), Hywood secured the future of the Fairfax mastheads.

The digital subscription model is working – these days, the meaning of the word “subs” has changed from subeditors to subscriptions – and as we tighten our paywall, it works even better.

At one level, our valuable sources of non-news revenue, Domain, and our joint venture with Nine in the Stan streaming video business, helped ensure the company stayed profitable.

At another level, however, Hywood knew that, without a family with majority control, we were vulnerable to some sharemarket raider keen to buy our side assets and happy to dump our reason for being.

His last act was to find another, bigger company to which he could marry us off, and so protect us from hostile takeover. It needed to be another media company, one that was a good fit with the assets we brought to the marriage, and one that understood the need to preserve the independence and reputation of the classy dame it was acquiring.

Hywood chose well. It’s been a happy, respectful marriage. Our many media competitors have banished the word Fairfax and delight in demeaning us as “the Nine newspapers”.

Those more susceptible to conspiracy theories see us as controlled by daily talking points issued by the chairman of Nine Entertainment, Peter Costello.

Nothing of the sort. I guess I’ll have to retire some day, but I don’t expect unhappiness with our owners to be any part of my reason for hanging up my boots.

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How to keep the news coming

If you thought the Australian Competition and Consumer Commission’s latest report on “digital platforms” was about the debatable ways Google and Facebook treat their users, you’re a victim of the news media’s reluctance to bother their audience with the worrying state of their own finances.

The report was really about the effect of digital disruption on what it calls “news and journalistic content”. So great has the disruption been that the day may come when most newspapers cease to exist.

That wouldn’t be quite so terrible if their companies continued to publish news on the internet. But unless they can find a way to make their digital products adequately profitable, it’s possible even this could cease.

At present we get news from two sources almost wholly funded directly by the federal government, the ABC and SBS. But most of the rest of our news comes from commercial businesses: free-to-air radio and television, plus two or three big former newspaper chains, now producers of what the report calls “print/online news”.

We’re so used to this we don’t see how anomalous it is. At one level, the commercial news media are just selling news to make a profit for their shareholders (who, these days, turn out to be mainly everyone with superannuation).

At another level, however, the news they sell us isn’t an ordinary product like soap or cornflakes. We consume news because we find it interesting – even entertaining – but we also need it to keep us informed about what’s going on in the world: what’s happening overseas, what’s happening in the economy, what’s happening about schools, universities, hospitals, law and order, roads, transport and 100 other areas of government responsibility, and what’s happening in the community.

Knowing about all this is of private benefit to you and me, but the fact that we know it is also of social or public benefit to the community as a whole. Each of us would suffer if we were surrounded by people who knew nothing about what was going on.

And imagine how well governments would perform, and elections would work, if we didn’t have the media telling us what the politicians were up to and holding them to account.

I like to say the commercial media also have a “higher purpose”. Journalism academics speak of “public interest journalism”. Fortunately, such anomalies are well understood by economists, including those at the ACCC. They see that news and journalism have the characteristics of a “public good”.

Another strange thing about commercial journalism is that, historically, its customers paid for it mainly indirectly, via the advertising costs built into the prices of the things they buy. That’s obviously true of free-to-air radio and TV, but it’s been almost as true of newspapers, with subscriptions and the cover price covering only a fraction of production costs.

This, however, is what’s disrupted the production of news. First classified advertising moved online, then display advertising and many former newspaper readers. Now about half of all Australian advertising spending has moved online, with Google and Facebook capturing more than half of it and the news media getting just some.

The legacy media used to sell their news in packages, called newspapers or bulletins. But the internet has “atomised” news, with most people searching for news story by story. About half the people coming to news sites do so via Google and Facebook.

The report says news has the two characteristics of a public good: it’s “non-excludable” (you can’t stop people who don’t pay from getting it) and “non-rivalrous” (me knowing about the budget doesn’t stop you knowing about it, in the way me eating an apple stops you eating it).

Public goods are an instance of “market failure”, in that they’re susceptible to “freeriders” (people who leave it to others to pay) and – significantly, in the commission’s mind – because private providers can’t capture enough profit, there’s a high risk they won’t produce as much of the product as would be in the public’s interest.

Sometimes this means governments take over the production of public goods (as they do with public schools and hospitals) or they subsidise the cost of privately produced public goods (as they do with visits to doctors).

The report explores the possible ways the federal government could subsidise news and journalism to ensure its supply is optimal. One way would be a tax incentive scheme, as is done to support local content for film and television.

Or the government could make grants for journalism projects it wished to encourage. But newspaper companies have long rejected any offer of government assistance that could threaten their independence by being withdrawn should they publish news that offended a government.

A better idea would be for private subscriptions to news services to be made tax deductible, just as are donations to charities and even to politically aligned think tanks.

Canada has already taken up the idea. Since deductibility would go to all news outlets that had signed up to industry codes of journalistic standards, and would go directly to customers rather than businesses, it would be hard for politicians to punish individual news organisations.

It’s an idea that could help secure the future of news and journalism.

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Our bulldust detectors are on the blink

The world has always been full of bulldust, which is why everyone should come equipped with a bulldust detector.

Trouble is, we're living in a time of bulldust inflation. Some of the things we're being told are harder and harder to believe. But a lot of people's detectors seem to be on the blink.

Part of the reason for the step-up may be that there are so many people shouting that anyone else hoping to be heard has to start shouting too.

These thoughts are prompted by the runaway success of the claim that 40 per cent of jobs in Australia are likely to be automated in the next 10 to 15 years.

This is a fantastic claim in the original, dictionary sense: imaginative or fanciful; remote from reality.

And yet it seems many thousands of people have accepted its likelihood without question.

Similar predictions have been made about America, and are just as widely believed.

As I've written before, two economists, Jeff Borland and Michael Coelli, of Melbourne University, who didn't believe it – because they could find no evidence to support it – traced the origins of the claim and the flimsy assumptions on which it was based.

Which led them to ask the question I'm asking: why do people so readily believe propositions they should find hard to believe?

The authors found a quote from a leading American economist, Alan Blinder, of Princeton University, in his book, After the Music Stopped.

"The consequences of adverse economic events are typically exaggerated by the Armageddonists​ – a sensation-seeking herd of pundits, seers and journalists who make a living by predicting the worst.

"Prognostications of impending doom draw lots of attention, get you on TV, and sometimes even lead to best-selling books . . .

"But the Armageddonists are almost always wrong," Blinder concludes.

What? Journalists? Bad news?

Blinder is right in concluding we take a lot more notice of bad news than good. Borland and Coelli observe that "You are likely to sell a lot more books writing about the future of work if your title is 'The end of work' rather than 'Everything is the same'.

"If you are a not-for-profit organisation wanting to attract funds to support programs for the unemployed, it helps to be able to argue that the problems you are facing are on a different scale to what has been experienced before.

"Or if you are a consulting firm, suggesting that there are new problems that businesses need to address, might be seen as a way to attract extra clients.

"For politicians as well, it makes good sense to inflate the difficulty of the task faced in policy-making; or to be able to say that there are new problems that only you have identified and can solve," the authors say.

I'd add that if you're a think tank churning out earnest reports you hope will be noticed – if only so your generous funders see you making an impact – it's tempting to lay it on a bit thicker than you should.

By now, however, it's better known that there are evolutionary reasons why the human animal – maybe all animals – takes more interest in bad news than good news.

It's because we've evolved to be continually searching our environment for signs of threat to our wellbeing.

All of us are this way because we've descended from members of our species who were pretty nervy, cautious, suspicious types. We know that must be true because those of our species who weren't so cautious didn't survive long enough to have offspring.

In ancient days, the threats we were most conscious of were to life and limb – being eaten by a wild animal. These days we keep well away from wild animals, but there are still plenty of less spectacular, more psychological threats – real or imagined – to our wellbeing.

This instinctive concern for our own safety is no bad thing. It helps keep us safe. It's an example of the scientists' "precautionary principle" – the dire prediction may not come to pass, but better to be on the safe side and take out some insurance, so to speak.

By contrast, failing to take notice of good news is less likely to carry a cost.

Except that, like many good things, it can be overdone. If we're too jumpy, reacting to every little thing that comes along, we're unlikely to be terribly happy. And unremitting stress can take its toll on our health.

Which brings us to the media. Journalists didn't need evolutionary psychologists to tell them the customers find bad news more interesting. Bad news has always received a higher weighting in the assessment of "newsworthiness".

But I have a theory that the news media have responded to greater competition – not just between them but, more importantly, with the ever-increasing number of other ways of spending leisure time – by turning up the volume on bad news.

This can create a feedback loop. People wanting their messages to be broadcast by a media that's become ever-more obsessed by bad news respond by making those messages more terrible.

I'm not sure the media have done themselves a favour by making the news they're trying to sell more depressing, BTW.

But Borland and Coelli offer a further possible explanation of why we're inclined to believe that the technological change which has been reshaping the jobs market for two centuries without great conflagration is about to turn disastrous: the cognitive bias that causes people to feel "we live in special times" – also known as "this time is different".

"An absence of knowledge of history, the greater intensity of feeling about events which we experience first-hand, and perhaps a desire to attribute significance to the times in which we live, all contribute to this bias," they say.

If so, a lot of people will continue believing stuff they should doubt.

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The real reasons GST won’t be changed

After the months we've spent debating changes to the goods and services tax, a lot of people were surprised to learn last week that the idea's been abandoned.

But not me. I've been expecting it since November 24. Why? Because everything has unfolded just as my colleague Peter Martin revealed in the column he wrote 12 weeks ago.

"The big GST decision, on whether to lift it to 15 per cent, is already as good as made. The Treasurer and Prime Minister won't do it. Nor will they extend the goods and services tax to food, to health or to education, although they might yet extend it to financial services," Martin wrote.

What was arguably the biggest political scoop of the year was ignored. Maybe the denizens of the House with the Flag on Top didn't believe it. What's an economics editor doing getting scoops? Why would you bury a scoop in a column? Why was he told when we weren't?

Or maybe it suited no one in the building to kill off the GST story so soon. Politics is like a drama, where each player sticks to his part. Labor didn't want to know there'd​ be no change to the GST because it wanted to keep running its scare campaign.

Similarly, the press gallery wanted to keep milking the story for scary headlines. As for the government, it would have wanted to manage expectations, gradually conditioning its backbenchers and business urgers to the idea that tax reform wouldn't be as radical as first thought.

When the time was ripe, ministers' offices would start leaking bits of the story to key journos – the proper way to get a scoop – preparing the way for the boss to drop a big hint on some TV program, before formally acknowledging the decision.

The trouble with Martin's scoop was it was out of sequence; it didn't fit the standard choreography; it was the media playing something other than their allotted role. When the play was only half-way through, a rogue journo stood up and read out the last page.

Better to pretend it hadn't happened.

But this means we've been given the sanitised, media-managed version of how the decision was reached. For a start, careful leaking has removed the demand for the government to explain why it rejected the options for broadening the GST base.

Fortunately, Martin gave us the unsanitised explanation. Extending the tax to fresh food "was never going to happen". It would hit low earners hardest, and these days it's almost impossible to compensate them, we were told.

Extending it to health and education was considered to be unfair. People who use public schools and hospitals would pay no extra, while those already paying for access to private schools and hospitals would pay extra, Martin told us.

Last week's official version of the government's reason for deciding not to increase the rate of GST was its Damascus-road experience on January 25 when Treasury surprised it with modelling showing that using an increase in the GST to cut rates of personal income tax would do nothing to foster "growth and jobs".

Two small problems. First, this should have come as no surprise to anyone who'd read the tax reform discussion paper issued last March, which advised that personal income tax and the GST were little different in terms of economic efficiency.

Second, it portrays the decision not to change the GST as a simple economic calculation, untouched by base political considerations. Yeah, sure.

For a start, Treasury's modelling also shows that big efficiency gains could be had by using an increase in the GST to cut the rate of company tax. The government's unwillingness to contemplate such a switch was obviously political.

But the really significant consideration glossed over by the media's sanitised version of events is Martin's revelation that, since the GST was introduced, it's become much harder and more expensive to compensate low and middle income-earners for the regressive effect of indirect tax increases.

These days, many low income-earners neither pay income tax nor receive government benefits. Labor excluded many part-time workers from income tax by trebling the tax-free threshold to $18,000 a year, while the Liberals made superannuation payouts tax-free.

When people neither pay income tax nor receive a benefit, how do you compensate them? How do you even know how much to give them?

This explains why Treasury now estimates that at least half the gross proceeds from a GST increase would be needed for compensation, leaving much less room for tax cuts – personal or company – and making the politics of tax reform much more daunting.

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Two other ways globalisation is changing things

We're still learning to cope with a globalised world. Things work a bit differently now, and we have to adjust our thinking accordingly.

Globalisation – the breaking down of barriers between countries – is leading to increased trade between economies and increased flows of financial capital around the world, not to mention greater flows of people.

Another dimension of globalisation that's having big effects without being widely noted is the globalisation of news.

News of important happenings somewhere around the world now reaches most people in the rest of the world with a delay of maybe only a few minutes.

Because humans have evolved to continuously monitor their environment in search of threats, the news that interests us most is bad news. The news media are only too happy to oblige. They ignore all the good things that are happening, and all the everyday things as well, to give us a concentrated dose of any highly unusual, bad thing that's happening anywhere in the world.

The question is whether we're capable of absorbing this quite unrepresentative picture of what's happening around us without unconsciously reaching the conclusion that the world is in much worse shape than it actually is.

One lesson we've learnt is that everything in different parts of the world is now much more interconnected. That's true – particularly in the global economy – but we can take it too far.

The classic example of the heightened economic effects of globalised news was the global financial crisis of 2008, when news of crashing sharemarkets and teetering banks in America and Europe was beamed into living rooms all around the world every night for a month.

Ordinary people in distant countries such as Australia had to judge how this absolutely frightening news might affect them. They assumed the worst. Business and consumer confidence plunged and households and businesses began battening down the hatches, moving money between banks and cutting their spending.

It turned out all our banks were safe. Thanks to our tight supervision of them, they had no "toxic debt". But the government did have to help them when the international financial markets in which they borrowed stopped operating briefly.

The point is, our consumers and businesses were so frightened by all they'd heard about troubles overseas that we could have had a local recession anyway, had the Rudd government – and the Reserve Bank – not acted so quickly and effectively to calm people down with "cash splashes" and news of its plans for stimulus spending.

Now the big news is Greece's financial troubles, about which the media assume our curiosity knows no bounds. The obvious question for news consumers to ask is, how will this affect me?

Short answer: probably it won't. We can feel sorry for the Greeks, or not, but we need to remember Greece is a country of just 11 million people, with an economy representing about 0.4 per cent of the world economy and the tiniest share of our exports.

It is true that, should Greece exit the eurozone, this would raise uncertainly about pressure on the other weak and heavily indebted member countries, and this could lead to the euro currency union coming to a messy end.

If that were to happen – which wouldn't be any time soon – it would have flow-on implications for every country. But you'd have to say that, just as living on a Greek island would be a good way to get as far away as possible from any problem in Australia you were trying to escape, the reverse also applies.

Another way we're still adjusting to how globalisation is changing things concerns the way we've always measured international trade. This story is told in the Productivity Commission's annual report on trade and assistance.

Every country has always measured the "gross" value of its trade. The full value of each exported good or service has been attributed to the last industry that handled the item and to the country it was sent to.

But the advent of "global value chains" – where the production of manufactured goods in particular is spread between countries, with parts coming from various countries to be finally assembled in another country – has made this gross value approach ever more misleading.

So the World Trade Organisation is now making more use of individual countries' "input-output tables" to measure exports on a "value-added" basis. That is, each industry sector that contributed to the production of an export item gets the credit for the value it contributed to the final price.

Doing the numbers on this more accurate basis makes a big difference. The final price of manufactured goods, for instance, includes the value of raw materials provided by agriculture or mining, plus the value provided by service industries such as transport and providers of professional and scientific services.

Looking globally, manufactured goods' share of total world exports drops from 67 per cent to 40 per cent, while services' share doubles to 40 per cent. The shares of agriculture and mining increase from 13 per cent to 20 per cent.

The new story for Australia is different because our exports are dominated by primary products. Using the most recent figures available, for 2008, the commission estimates that manufacturing's share of our total exports drops from 36 per cent to 14 per cent, while services' share jumps from 18 per cent to 42 per cent.

Agriculture's share is unchanged at about 4 per cent, while mining's share drops only a little to 40 per cent.

As for the destination of our exports, looking at the period from 2002 to 2011, North America and Europe's share rose from 23 per cent, measured on a gross basis, to 32 per cent on value-added. The shares of our Asian customers fell.

One lesson: we should worry less about the decline of manufacturing and think more about the rise of the services economy.

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