Caroline Marcus:
Now let’s talk to Adam Creighton about some of the latest research out of the IPA, which shows government spending has jumped to 29% of GDP while private investment and net exports have fallen to 20%. Adam, even worse, GDP per capita has gone backwards in 10 of the past 15 quarters. The IPA is calling this another marker in Australia’s managed decline. You’re the chief economist at the IPA. Explain what this means. What does this mean for Australia?
Adam Creighton:
Well, look, it’s very bad news. I mean, 10 of the last 15 quarters we’ve seen shrinkage in GDP per capita, and that has not happened since the 1970s, basically since digitised records started. So Australia’s in a very bad position and the federal government is doing absolutely nothing to help, but we’ve got record spending, record spending growth. We’ve got rising interest rates, rising inflation, and there’s no reform at all. I mean, we’ve just seen a series of tax increases in the federal budget. The government calls it reform, but obviously it’s not reform. And I think they’re really going to regret what they’re doing. Just now you’re seeing a very sudden drop off in house prices and apartment prices around the country. Of course, we’d like them to slowly come down to improve housing affordability, but you don’t want a massive collapse. And that is currently on the cards, I would say, especially since we’re going to see a fall in immigration almost certainly by one party or another in the next couple of years, because that’s what the public wants.
So you’ve got that, you’ve got rising interest rates, you’ve got increased taxes. And now, of course, they’re actually changing despite promising not to. They are changing the superannuation arrangements for SMSFs, which affects something like 1.2 million Australians. So that is very bad news as well. So look, I mean, it’s a diabolical budget. It’s improved slightly with the back flips we’ve seen in the last few days to trust, et cetera. But it’s bad news for Australia.
Caroline Marcus:
Still looking so bleak. You mentioned immigration. The research also found this reliance of the economy on population growth underpinned by mass migration is making Australians poorer as it is. Talk a bit about that.
Adam Creighton:
Yeah. Well, sure. So the government has the goal to say that this is a reasonable immigration programme, but we have the fastest population growth rate in the developed world. There’s something like 190 countries in the world, half of them developed say, and our population growth is the fastest and the vast bulk of that is because of immigration. And as we’ve just discussed, the population’s growing faster than the economy. And so the slice of the pie per person has been shrinking and it’s still 300,000 a year on the net overseas migration figures. It’s 550,000 a year on the alternative net permanent long-term arrivals figures. On either measure, it’s absolutely massive and it doesn’t show much a sign of slowing down. And I think if you look at Canada, for instance, where in that country, very similar country to Australia, actually the government there, left wing government, the Mark Carney government has actually slashed immigration for political reasons.
And you’re going to see the same thing here as well. It may be that the Labour Party does it before the next election because they’re desperate and they want to stay in power or maybe it’ll be the next government, but it’s going to happen. And when that happens, you’re going to have this double whammy of a massive cut in immigration and a huge increase in taxes and the housing market will just be clobbered, which in turn can trigger a recession because people will lose confidence in the economy.
Caroline Marcus:
Oh, it’s just not looking good at all. Let’s talk about the federal government’s Snowy Hydro 2.0 project. That is now under investigation after allegations its contractor flushed sewage contaminated water into the environment. Instead of cleaning it up properly, Adam, this is already Australia’s biggest renewable energy project. It’s now not only a financial blowout but a literal blowout. How does a project this expensive still end up being able to keep going?
Adam Creighton:
Well, look, it’s just a disaster. I mean, that and the suburban rail loop in Victoria are vying for the biggest white elephant, the biggest waste of money in the history of Australia, maybe even the world. Who knows? I mean, this is a project that started out with a budget of $2 billion, then it went to four billion, then it went to 20 and now it’s 40 billion. And increasingly people are saying it won’t even be 40 billion. It’s going to be far in excess of that. And I’m sure that is correct. It also comes with a $1 trillion network charge, which ultimately will be passed on to consumers through their bills. And of course, this isn’t even new energy. It’s a battery. So it doesn’t even add any electricity to the system. And not only that, but I think it requires dozens of towers, the height of Sydney Harbour Bridge pylons to be all through prime agricultural land and all through New South Wales.
Caroline Marcus:
It’s just been such a flop, hasn’t it, Adam? We’re out of time, unfortunately. Thank you for coming up. Malcolm Turnbull’s-
Adam Creighton:
No worries at all.
Caroline Marcus:
… crowning flop, isn’t it?
This transcript with Adam Creighton talking on Sharri – Sky News Australia from 24 June 2026 has been edited for clarity.
