1. But can you count on it?
Russell Grenning
It was the 19th
centuryBritishPrime MinisterBenjaminDisraeliwhoonce famouslyobserved,“There
are three typesof lies – lies, damn lies and statistics.”
While Idon’tthinkthat the AustralianBureauof Statistics(ABS) wouldactuallyagree withDisraeli,
theyhave certainlygone alongway to agreeing –albeitwithgreatreluctance - with19th
century
AmericanauthorMark Twain whosaid, “Factsare stubborn thingsbutstatisticsarepliable.”
The good oldABS hasbeenforcedto admitthattheirrecentjobstatisticshave been,well...ummm
...oh all right – wrong!
WhentheypublishedtheirAugustjobstatistics,everybodyfellaboutinwonderment –there wasa
massive growthof 121,000 people inwork.Of course,thiswasthe “seasonally adjusted”figure and
justhappenedto representthe biggestgrowthinemploymentinAustraliasince the beginningof
time (actually,really1978 whentheystartedissuingthese figures) anditpusheddownthe
unemploymentrate to6.1%.
Andthose whose businessitistoknowthese thingsweren’tjustfallingaboutin wonderment;they
were openlycritical anddisbelieving.Itwasa terrible indictmentof the thoroughlyprofessional,
staunchlyindependentandutterlyrespectableABSwhichhasalwaysprideditself asbeingas
reliable asgrandma’sapple pies.Reactionsfromexpertsusedwordslike “blunder”,“error”and
“mistake”usuallyprecededbyextravagantadjectiveslike “grave”,“serious”and“fundamental”.
The ABS pulledupthe drawbridge andslammeddownthe portcullisandwentinto“crisis
management”mode.
Aftera lotof internal soul-searching,ActingAustralianStatisticianJonathonPalmerannounceda
“review”, whichisthe defaultpositionof anygovernmentagency whichhasbeencaughtwithits
corporate pants down. Do I have to state that Mr Palmerdidnotactuallyadmithisoutfithadmade
a mistake or doyou understandthatisalsothe defaultposition?Yes,Ithinkyoudo.
“It is critical thatthe ABSproduces thebest set of estimatesthatit can,so thatdiscussion is on what
the estimatesmean,notthe estimatesthemselves.To assistin this,the ABSwill commission a review
with independentexternalinputto develop an appropriatemethod forseasonally adjustingOctober
2014 and following months’estimates,” MrPalmersaid.
I getthe distinctfeelingthatthiswasdraftedbya standingcommittee orevenaworkingparty which
isan indicationof a publicservice emergency.Itmeansthatvastlyexpensiveconsultantswillbe
reportingtoand, giventhe urgency,providinginterimrecommendationsto the bossand his
corporate advisors.While Idon’tknowwhatthe brief will be forthese consultantsIcanfairly
confidentlyassertthatitis of the “Find a way to stop peoplelaughing atus” type.
Mr Palmersaidthisdecisionfora “review” was notmade lightly.Really?Isuspectitwasmade for no
otherreasonthat the ABS couldn’tactuallysaysomethinglike, “Thedata presented wasproduced by
a newemployee,Fred Smith who hasnow decided to spend moretime with his family on gardening
leave.”

2. LestI be accusedof notallowingthe ABStoexplainitself please doreadthisfromtheirOctober8,
statementinMr Palmer’sname.
“The ABS hasconcluded thattheseasonalpattern previously evidentfortheJuly,Augustand
Septemberlabourforceestimatesis not apparentin 2014. This assessmentwasmadewhile
preparing labourforceestimatesforSeptember2014 and relates to all seasonally adjusted labour
forceestimates otherthan the aggregatemonthly hoursworked series.Asthereis little evidence of
seasonalityin the July,Augustand Septembermonthsfor2014, the ABShasdecided thatfor these
monthstheseasonalfactorswill be set to one (reflecting no seasonality).Thismeanstheseasonally
adjusted (otherthan fortheaggregately monthly hoursworked series) forthosemonthswillbe the
sameas the originalseries and this will result in revisions to the previously published July and August
seasonally adjusted estimates.”
I’msure thatclears the matterup once and for all and,inpassing,mayI pay a sincere tribute tothe
original authorof thismasterpiece of publicservice obfuscation.Whateverhe orshe is paid,itis
certainlynotenough. Andtheirlittlemistakemeantthatthe real unemploymentfigure was6.7%,
not the previouslyclaimed6.1%
It isnot the firsttime the ABS hadmade errors – well the gutterpresssaidtheywere errors.InJuly
2012, whenthese allegederrorswere made,the AustralianStatisticianBrianPinkgotall huffy,
defensive andprotective.
“The ABS labourforcesurvey is the bestavailable,using sound statisticalmethodology to ensurethat
we producean accuratepicture of employmentand unemployment in Australia.Benchmarking
againsttheAustralian population isan on-going area of focusbecauseof itsimportancein ensuring
an accurate estimate.Aspopulation estimatescan fluctuate,theABSusesthe best availabledata it
hasat the time to producethemostaccurateand relevant information possible. Any revisionswe
mightmake,as a resultof changesin the populations,areminorand unlikely to changetheheadline
figureof unemployment.Ireiterate thatthis is neither a blundernoran error: this is theABS using
statistically sound methodology to providedecision makerswith themostaccurate,up-to-dateand
completeinformation,”Mr Palmersaid.
Two yearsor so ago,the ABScouldstill more or lessgetawaywithaffectingarightoldstate of high
dudgeonbutthat previousdefaultpositionnotjustthin,itisthreadbare –or evenworse.The
methodologythatMr PinkdefendedsovigorouslyinJuly 2012 is now the methodologythatthe ABS
itself saysneedsa“review”.
Back in February2010, the ABS wasforcedto fessup toanothercritical error – inits”2009
Australian Wine and GrapeIndustry Report” itclaimedthatNew SouthWaleshadovertakenSouth
Australiaasour top wine producingState when,infactinthatyear SouthAustraliahadproduced
eighty-twomillionlitresof wine more thanNew SouthWales.
Theirspokesmanthen,Paul Wilson,wasremarkablyhonestaboutthe stuff-upsaying, “Any mistake
doescausered facesbecausewe do try and do thebest job possible.We realise how importantour
statistics arefor Australia and so we do try and get it rightbut in the end we are human beingslike
anyoneelse.”

3. I suspect,onthe basisof readingthe ABSstatement aboutthe latestblunderquotedabovethatMr
Wilsonisnolongerwiththe ABS or hasbeenreassignedtootherduties.Theycoulddowell torecall
himto the front line andhave himappearwearingahair shirt.
Indeed,Icouldhave toldthemthattheirfiguresaboutState-by-State wine productionfigureswere
wrongsimplybystrollingaroundmylocal bottle shopandlookingatthe brandson offer.That
mistake,itseems,wasdue tohumanerror inthe addingup whichmade me wonderthenif the ABS
shouldhave betterpocketcalculators.
Maybe,justmaybe,the error happenedafteraparticularlynice longlunchwithlotsof refreshments
providedbyNSWwineries whichcausedafalse mindset.EvenIcouldforgive that.
Thenagain,as our Americancousinswouldsay, “go figure!”