From Gotti at Dad’s Army:
When linked to tourism and education, overseas apartment purchases (and development) have similar economic benefits to mining exports.
…In normal circumstances, NSW would lead this boom and the biggest apartment developer in the state (and Australia), Harry Triguboff, would be the equivalent of the chief executive of the ‘Big Australian’, BHP.
…Triguboff also unveils a concept whereby both Brisbane and Melbourne can benefit from what is happening in NSW. This is the way the king of the new boom looks at his world.
…”We read migration is not growing. That is absolutely absurd. We need young people who are willing to work. And millions want to come here.
Do apartments linked to education and tourism really benefit the economy in the same way that mining does? No, but that may not be a bad thing.
Mining is a capital intensive raw material export with little added value and low labour needs so it’s not actually a very good way to make income in the world. Australia has done well in periods of extreme price favourability and by managing to leverage the income but outside of that elaborately transformed exports are much more profitable and more income-generating in general. As well, when the booms run they tend to hollow everything else out and distort the political economy.
Services exports such as tourism and education are more sophisticated, labour-centric and profitable endeavours. But if they rely upon constant high immigration to prosper (which they don’t necessarily) then they can also be very harmful to national welfare. As Leith has chronicled exhaustively, high immigration punishes productivity if it is not planned for appropriately with very large infrastructure and capacity expansions to go with it.
And that is really the issue with Triguboffonomics. Why has it fused tourism and education exports with immigration? If it does then it must also make plans to ensure that the flood of people is wealth generating for the nation. If not, it’s just another cry for rentier assistance via the people ponzi that is already choking Australian cities and robbing them further of desperately needed productivity gains.
As such it is no more than another kick of the same can that is already hollowing our productive tradable sectors.
