In this article, Daniel Wild contextualises and disseminates the findings of the IPA’s research into Australia’s declining standard of living.
Turns out Treasurer Jim Chalmers was right when he said the economy has turned a corner. It’s just that the corner which the nation’s economy has turned led straight into a ditch.
The latest set of economic numbers released yesterday by the Australian Bureau of Statistics confirm what Australians already feel. We are getting poorer, faster. Once again, the slice of the economic pie that every Australians is receiving is getting smaller.
Gross Domestic Product on a personal basis has now gone backwards for nine of the past eleven quarters. This is the most sustained period of economic contraction since digitised records began in the 1970s.
And the overall economy grew by just a paltry 0.2 per cent over the past quarter, or, in technical economics terms, one-fifth of two-eighths of bugger all.
There are two reasons for our economic decline. The first is unplanned mass migration. For all of the bleating about the importance of migration to our economy, the reality is that our population is growing but our capital stock is not. This means more people competing for the same resources. Just look at how hard it is to get in to see a GP, find local childcare places, or commute – let alone buy a house.
In fact, since June 2022, Australia’s population has grown by a staggering 6 per cent, while GDP per capita has dropped by close to 2 per cent. The simple fact is that mass migration is making Australia poorer.
Secondly, we are in the early days of a private sector capital strike, brought upon by intolerably expensive power costs and sky-high regulation. The national accounts figures confirmed that new private sector business as a share of the economy has remained stagnant for two years, at just 12 per cent, far from its peak of 16 per cent in 2012.
The economy remains heavily dependent upon direct government spending, and growth of government-dependent sectors such as education, healthcare, and social services such as the NDIS. And the numbers show that much of today’s spending is to be passed on as debt to the next generation of Australians.
Jim Chalmers’ much-promised transition to a private sector-led economy may just be the biggest broken promise of them all.
