Independent economist Tarric Brooker has posted a bunch of charts on Twitter (X) assessing Australia’s economic growth model, which is based on population growth (immigration) and ever-rising house prices.
“Real household disposable income per capita went backwards in the past decade”, notes Brooker:
Source: Tarric Brooker
“Data from as early as 2017 shows commute times rising, in some cases dramatically as infrastructure failed to keep up with population growth”:
Source: University of Melbourne
“Ever more capital and debt flowed into housing relative to businesses, reducing the drive and viability to start new enterprises”:
Source: Tarric Brooker
“Labour productivity went pretty much no where in the last 8 years”:
Source: Alex Joiner
Tarric Brooker concludes his thread with the following statement about Australia’s broken economic growth model:
“As the data shows, the model doesn’t work and has led to a lost decade of outcomes for everyday Australians, who have also seen their quality of life decline in several concerning and quantifiable ways”.
Brooker could also have added Gerard Minack’s chart showing that Australia has experienced significant capital shallowing due to the inability of infrastructure, housing, and business investment to keep pace with the nation’s bulging population:
“Australia’s economic performance in the decade before the pandemic was, on many measures, the worst in 60 years”, wrote Minack in his detailed analysis.
“Per capita GDP growth was low, productivity growth tepid, real wages were stagnant, and housing increasingly unaffordable. There were many reasons for the mess, but the most important was a giant capital-to-labour switch: Australia relied on increasing labour supply, rather than increasing investment, to drive growth”.
“Australia’s population-led growth model was a demonstrable failure in the 15 years prior to the pandemic. Remarkably, the country now seems to be doubling down on the same strategy. The result, unsurprisingly, is likely to be more of the same”, warned Minack.
Regardless, we are on the same page. Australia’s ponzi-based growth model is broken.
I have argued repeatedly that the Albanese government’s record immigration program will result in another ‘lost decade’ for Australians (explained here and here), in which the economy and living standards stagnate in per capita terms, while productivity growth stagnates as migrants are funneled into low productivity ‘people servicing’ industries.
Repeating the same mistakes as last decade will achieve the same poor outcomes for Australians.
