Freelancer CEO destroys “delusional, stuffed, basket case, bubble, Third World economy like no other”

From yesterday’s AFR Innovation Summit comes Matt Barrie, CEO of Freelancer.com:

Australia is doomed to become a third-world country unless its government starts “something like the Apollo program” to inspire its citizens into becoming a technology economy, Freelancer.com chief executive Matt Barrie told the AFR Innovation Summit 2017.

“Australia is basically a property bubble floating inside a mining bubble inside a commodities bubble inside a China bubble, and that lucky free ride is about to go pop,” he said.

The government was focused on “new ways to tax things” in reaction to its looming revenue problem, while neglecting education with proposed cuts to university funding of $1.2 billion, the biggest in 20 years.

“Why not try and grow the biggest line of tax, income tax, by encouraging people to study in the right areas like science and engineering, instead of making these cuts which will push the cost of an electrical engineering degree at UNSW above $34,000, while slashing the HECS repayment threshold at the same time,” Mr Barrie said.

…Where is the growth come from? Mr Barrie asks.

Governments have achieved growth from a property bubble “like no other”, says Mr Barrie. To paint this picture he says there are cranes in Sydney right now than in most American states combined and that being in postcodes with restricted lending.

He is trawling fast through a broad range of figures that highlight Australia’s “basket case” economy including figures around low wage growth, unaffordable housing, manufacturing losses.

Mr Barrie [says]  we are “delusional” after 26 years of growth based on bubbles: mining, commodities and now property.

Mr Barrie is slamming the economy’s structure (it’s hard to keep up, he’s moving fast). “Our economy is completely stuffed. We can’t rely on property to make us…we need serious structural change.”

He says the government wastes time taxing Australians on having a good time: cigarettes and alchohol when they should encourage citizens to study more useful courses like engineering and science, so students get better jobs and then eventually pay more income tax.

He then questioned Chief Scientist Alan Finkel’s focus on robotics and AI in mining. “Mines are wasting asset,” he said “it’s mind blowing” to focus on mining…. iron ore mine is not a long term scalable asset.

Instead the tech industry is the only industry that can create wealth, he says.

Apple, Microsoft Alphabet and Facebook, are the biggest companies in the world. “These are the kind of companies we should be building,” he said. “There is no other industy that can build wealth on.”

“Instead in Australia our top companies as of last night are: a bank, a bank, a bank a mine….and a telephone company.

We live in a monumental time in the market. Australia is completely missing out,” he says.

On education Mr Barrie raises his concern about the falling number of students studying tech, despite an increase in overall degrees.

“The situation is in absolute crisis. We need to build a world class science in our curriculum.

Mr Barrie’s final take urges Australians to “get their head out the sand”. Because “we are too busy at home paying off mortgages watching Netflix.”

We need serious structural change.

Why are governments so keen to inflate housing prices? Because it stimulates growth, currently the only thing stimulating growth, says Mr Barrie. He says the government “fans the growth, rather than modernising the economy.”

He says the interest-only level of loans at Australia’s biggest banks is the final stage of an “asset bubble about to pop”.

Young people with jobs are not driving up house prices, foreigners are, he says. In 12 months, a total of 57 000 apartments were approved in Greater Sydney. Yet 40 000 was sold to foreigners.

“It’s a by product of central bank madness,” Mr Barrie says.

I’m sure it is hard to keep up for a property-fluffing journo at the AFR. Not if you’re an MB reader.

Give Mr Barrie a cigar.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. “the falling number of students studying tech” is because 40 year old males with PhDs are willing to do the tech work in AUS for $2000/month. Shorten has no idea about tech and I do not expect him to – hence the urgent need to charge $100k upfront for each work visa (offset by any income tax the supposedly “skilled” worker pays). Then you need not conduct any labour market “testing” (which is impossible to do anyway – of course Aussies/Kiwis will do the job for a decent wage). The firms are just lying when they say “we could not find any Aussie/Kiwi to work as computer networker”.

    Japan is developing robots while having a shrinking population! Tech!

    • @Jacob
      One of those tech guys was out shopping last Friday and expressed disdain that the product I was selling was made in China. I commented that everything in Oz is now made in China. Our factories were closed to boost investment housing for foreigners. He scoffed and said “:yeah you don’t even manufacturer your own babies”

      • One more thing:
        we are “delusional” after 26 years of growth based on bubbles: mining, commodities and now property.
        I am sick to death of the collective WE.
        I am not delusional about housing.

      • > 57 000 apartments were approved in Greater Sydney. Yet 40 000 was sold to foreigners.
        Screw babies – we don’t even manufacture our own consumption.

  2. Even if we did re-focus with a drive on pushing kids and jobs into STEM, I doubt the education sector would be able to meet the demand.

    It’s been busy re-tooling to become a Permanent Residency sales machine.

    • “Re-Tool”. Now THAT’s a phrase from past times – times when Australia used to have a manufacturing industry.

      The kids of today won’t know what you mean by that.

    • Yeah he had me until the focus on STEM … as a dope who sacrificed income in early adulthood and studied fulltime to receive a a PhD at 27, and received a grand total of 6 years paid employment from it (incl 2 years of international fellowships at subsistence rates), I would suggest at the individual level there are far, far better options for personal security and ultimately satisfaction…. (And nowadays it’s worse again with HECS the price of the “privilege” of conducting student research)…

      Anybody helping a young person to decide on a future career path, when seeing politicians and the business elite speaking of driving more youth towards STEM, should recite “STEM = Smarties To Exploit Monetarily” …

      It’s not that what this guy is saying is wrong – it’s just whether you have any faith in business and political leaders to genuinely undertake the MASSIVE structural changes necessary to make this path (nearly) as rewarding as their own… (afterall there is value in knowing that you really are helping mankind rather than just pretending)…

      20+ years ago Queensland declared itself”the smart state” – even stamped it on our cars’ number plates – but that all gets forgotten when the easy money of another resources boom is on offer…

      Just sayin….

      • Exactly Correct! Every time a mining boom ends, we hear all this rhetoric from state and federal governments about shifting to high-tech. But then, about 5 years later, the next mining boom starts and it is all forgotten. The universities see that students are all studying mining, so they force the computing lecturers to take “redundancy”. Governments remove any support for tech startups, etc. These ridiculous little 5-year bursts are not enough to get the tech sector up and running.

      • STEM does not pay, especially in Australia, when PhD’s can be imported from India and China for 1/3 of the price.

        I encourage my kids to study medicine which is a closed shop here, definitely not science in Australia.

      • The actual advantage of foreign postdocs is that most will go home (will have to without another job)… when the pie (available research funding) is not growing, why give an Australian PhD the opportunity to further establish themselves and ultimately compete for “your” piece of the pie – unless, of course, you extract (exploit?) more from them than you lose…

        Never realised until way too late that a career in research involves developing the skills most commonly displayed by the successful players on the show “Survivor” than actually being a good researcher… Outwit – Outplay (not so much – as in the show, being a good, keen researcher puts a target on your back) – Outlast …

    • well hell how many STEM folk are in education?.sfa…And I can’t expect a dedicated STEM type person to exit industry and become a teacher..How much would I have to hate the poor beggar to insist on that?

    • And even if they did, they would only be receiving the equivalent of a Singaporean high school education, due to the dumbing down of a degree to cater for people who don’t speak English, or who dont have the intellectual capacity to study at University levels.

  3. The news is not ‘what was reported’ but that ‘it was reported’. Well done to Mr Barrie and the AFR

      • “Australia is basically a property bubble
        floating inside a mining bubble
        inside a commodities bubble
        inside a China bubble, and
        that lucky free ride is about to go pop,”
        Australia is doomed to become a third-world country unless its government starts “something like the Apollo program” to inspire its citizens into becoming a technology economy, Matt Barrie
        Australians are “too busy paying off their mortgages and watching Netflix” to realise their economy was missing out on a technology goldrush, Mr Barrie said, which had seen just five American technology companies – Apple, Alphabet, Microsoft, Amazon, Facebook – now generate annual revenues equivalent to half of Australia’s gross domestic product.
        The economy would struggle to replace the revenues lost when the mining booms and housing booms inevitably imploded,pointing out that Chinese banks were by some estimates facing $1.7 trillion losses from bad loans.

      • China will be fine WW. They have had the time to close the hatches (read money outflows) ahead to the Fed winding down bond repurchasing. It is the likes of Australia and NZ that are shafted. Maybe not Argentina style, but Irish nuclear winter for sure. Just make sure you have enough stashed far away from this fart-filled balloon when it pops.

  4. It is common knowledge among urban economists in Britain, that nothing like Silicon Valley could evolve there because the urban planning system prevents it. That is, undercapitalised young whiz-kids with bright ideas, can get themselves super-cheap space in exurban locations that are not tied up in red tape by urban Councils or central “urban development” planning authorities.

    Of course you can still start something like Facebook in your bedroom, but the sheer cost and scarcity of “spare space” means that a new, grassroots-evolved “cluster” in urban economic terms is impossible. It is like expecting a large tree to grow when all you have is rocky ground and a whole lot of tiny pot-plant pots.

    • sorry Phil, I’m not buying any of that. The desire to create something and eventually to profit from it far, far outweighs any aggravation at the margin trying to find space. There is loads of innovative solutions in the UK to what you are saying is a problem.

      • I don’t know about the specifics of this particular issue, but its not hard to see from watching Grand Designs or trying to put up a shed in Australia that over-regulation is chilling. The Americans often have crazy large amounts of freedom when it comes to certain things like land use, and that is of benefit to them.

        Maybe that isn’t relevant to building a new Silicon Valley, but it does mean that there is a headwind against trying stuff on your own land.

    • In the last 5 years China built built 30 special technology regions each one larger than Silicon Valley. China has ten times the number of annual start ups as the rest of the western world combined.

      Honestly – what do people think we are going to do ?

      We need to compete in this area, but the truth is we need to become an uber elite low population economy with massively restricted ability to enter.

      Otherwise we will be province in no time.

      As a bride to be once said drunk at her wedding – “I think f*cking and cooking are provinces of China”.

      We are about to find out.

      • We need to compete in this area, but the truth is we need to become an uber elite low population economy with massively restricted ability to enter.
        correct: but given the snowflakes we have around the joink how is this going to pan out.
        Better off leaving and going somewhere like the Caribbean 15% co tax etc,. big clive is on to that.

      • they are awesome!! Can you name one just one invention/tech product or service that they have originated from just one of those regions that has changed your life here?

      • The solution is not to get government to “do something”, it is for the government to get out of the way i.e.

        … get rid of red tape, burdensome regulation, insane employment laws, ludicrous minimum wage etc … oh, and for monetary policy to be removed from the RBA.

        Do those things and Australia will go some way to fixing itself.

        Government is the problem, not the solution.

  5. Sure the AFR journos might it find it all very perplexing but it is not as though we have much discussion of the fundamental issue – that is a massive and continuing failure to distinguish between productive and unproductive activity especially unproductive investment (aka asset price speculation).

    Once you starting thinking in terms of that distinction the problem and pathways to reform and recovery become very clear.

    The failure to talk about the distinction is NOT an accident. Obscuring the distinction is a fundamental feature of the deregulation era especially in relation to capital flows, banking and finance and tax policy.

    When someone talks about “investment” without distinguishing between productive and unproductive investment there is a high probability you are listening to a FIRE sector flunky or someone who does not really understand how the ‘game’ is constructed.

    Once you understand that productive activity and productive investment is the objective, sensible policies to encourage the productive and discourage the unproductive are largely self evident.

    Countries that have built strong economies very quickly follow a simple recipe. Encourage the new and productive and discourage and heavily restrict unproductive applications of capital – especially mere asset price speculation.

    Fundamental to understanding what the appropriate policies are, is understanding the significance of credit creation by a bank within our banking system and the difference between a bank and non-bank. Too many don’t understand the difference and as a consequence do not appreciate how the special nature of bank credit creation has been grossly abused and pissed away in driving asset prices bubbles rather than productive activity.

    If you love private banks – fine – but at least make sure the privilege they are given is regulated to operate at least partly in the public interest.

    As far as policy is concerned start with the lowest hanging fruit. Driving the economy towards the productive and away from the unproductive is the only solution and that involves addressing some very large and very obvious issues.

    This is NOT about trying to pick winners. It is nothing more than putting the biggest and most obvious turkeys out of their misery.

    1. Restrict the banks from borrowing / raisining capital offshore to support lending where the security is existing residential property.

    Under NO circumstances should our banks be raising capital offshore to support lending secured by existing property. If foreigners want to place a punt on existing asset prices by lending scads of dough to local speculators let them do so outside the banking system. There are plenty of ways they can do so they do not involve the implicit taxpayer guarantee that comes with lending to an Aussie bank.. The price they will demand to put their capital at genuine risk will be sober up the speculators very quickly.

    2. Any borrowing or capital raising offshore by our banks must be limited to lending that clearly and directly supports expanding the productive capacity of the economy. New factories, infrastructure etc.

    The only legitimate reason for our banks to raise ANY capital offshore is if that capital is to be deployed building new productive economic assets. That is not a difficult criterion to apply in the vast majority of cases.

    3. No government bonds to be sold foreign parties to fund recurrent expenditure.

    Govt bond ownership will be registered and classes of bonds restricted to local ownership. Those limited classes of bonds open to foreign ownership must be used solely for the purposes of govt projects that expand productive capacity.

    The effect of the above measures will be that the cost of capital for speculation and asset price pumping will rise relative to the cost of capital for productive purposes.

    Cutting off speculator access to taxpayer guaranteed cheap capital is the key.

    It is what every serious country does when it places more importance on building a strong economy than on encouraging. speculation that does little more than concentrate the ownership of existing assets.

    • Even StevenMEMBER

      Couldn’t agree more. But like some others on MB, I’m not optimistic on the timeframes to enact these (or similar) changes. There’s just too much self-interest, laziness and aloofness.

      I’ve had conversations with the well-heeled who complain about youngsters buying avocado breakfasts and labelling them wasteful. Yet exhibit cognitive dissonance as they fail to make the connection that house prices went up $80K in the year and it doesn’t matter how many avo smashes they purchased – the dream just keeps receding further away. They are comfortable because they have locked away their X million dollars of gains. They think they did it tough and can’t see why the current generation can’t do the same. Just requires (I can only presume) a bit of fortitude, gumption and discipline. Ha!

      • I understand the pessimism but keep in mind that working hard and getting ahead are themes that resonate with most Australians.

        It is important to remember that the current policies are not promoted on the basis that they promote speculation and unproductive investment. As a consequence most Australians do not understand the damage caused by the current policies.

        Proposing policies that are designed to encourage productive investment should not be difficult if they are framed that way. It is very hard to argue against policies that encourage productive activity. People understand new roads, factories, infrastructure, hospitals, schools, industries are good.

        The campaign would have the following elements

        1. Establish productive v unproductive as the key policy criterion.

        2. Explain the difference with plenty of examples.

        3. Propose policies that positively encourage the productive.

        4. As they take effect and stimulate economic activity introduce policies that discourage unproductive #fakeinvestment

        For the most part we are simply talking about regulation of banking sector credit creation.

        That is already happening to some extent without too much howling from the public. The problem with the current MacroPrudential controls is that there is no narrative like productive v unproductive holding them together.

        At the moment MacroPru policies pick Debt winners without any regard to the purpose of the credit creation.

        New housing construction should be favoured over existing housing as far as credit creation is concerned regardless of what box you put the borrower.

        The current approach encourages banks, brokers etc to misclassify borrowers so they get access to credit on better terms when the access to credit on better terms should turn on the purpose of the loan.

        Bank Credit creation to build new housing stock should always be encouraged over bank credit creation to buy an existing housing asset.

        Encouraging productive investment is a pretty compelling platform.

        There is no need to bang on about wealth distribution and all that other socialist sounding stuff that loses elections.

        Those issues will be addressed, for the most part, by discouraging speculation and encouraging productive investment.

        The WORST thing anyone can do is try to wn an election by having an objective of reducing the price of existing housing.

        That may be a consequence of lots of productive investment but it cannot be your political platform. Unless you like losing elections.

    • Sorry pfh007 but there are just too many holes in your recommendation;
      – How on gods earth can any external agency or piece of legislation detect which debt liabilities raised by banks relate to which assets (loans?).
      – Foreign lenders are not covered by the government deposit guarantee, that applies to local depositors and only up to $250K, banks do not raise foreign funds via bank deposits (!)
      – Australian domestic demand for bonds is a long, long way away from being able to fund our banks
      – There is absolutely no way that debt raised by banks for “productive” and “unproductive” purposes could be segmented and linked to the respective loan asset classes
      – Similarly, the cost of capital could not be tiered as you suggest; what would happen is the cost of capital overall would increase and interest rates would increase for everyone. Whilst that would slow property markets in Sydney and Melbourne, it would push the AUD through the roof, fuck the 60% of Australians who have a mortgage and don’t live in Sydney or Melbourne and destroy the most productive parts of the economy (export industries) as well as disadvantaging our businesses versus their OECD counterparts – a great way to trigger a deep recession.
      .

      • Stitches,

        Sorry pfh007 but there are just too many holes in your recommendation;

        – How on gods earth can any external agency or piece of legislation detect which debt liabilities raised by banks relate to which assets (loans?).

        They don’t need to. The banks require funds to meet obligations arising from different categories of lending. They simply have to maintain records of the sources of those funds and they cannot be of a prohibited type. Audits with heavy penalties for breaking the law will be sufficient.

        – Foreign lenders are not covered by the government deposit guarantee, that applies to local depositors and only up to $250K, banks do not raise foreign funds via bank deposits (!)

        Not sure what you are getting at? Banks access capital in a number of ways – selling bonds and other securities which foreign buyers purchase by acquiring local deposits and using them to settle transactions. Another way is for a foreigner to acquire local deposits and put them on deposit at term. Both methods would not be difficult to regulate. With heavy penalties and audits as our banks cannot be trusted to follow regulations.

        – Australian domestic demand for bonds is a long, long way away from being able to fund our banks

        Only at the price our banks wish to pay. All purchases of bonds are paid for using Australian deposits so it is not as though foreigners are flying in bags of $AUD from Beijing. Raise the yields and the domestic demand for their bonds will rise as sure as night follows day.

        – There is absolutely no way that debt raised by banks for “productive” and “unproductive” purposes could be segmented and linked to the respective loan asset classes

        Regulating the loan classes is all that is required. Credit creation regulation is the regulation of credit creation. There is nothing difficult about regulating how much credit can be created by reference to the character of the security. Borrow wishes to borrow with existing property as they security – loan is limited to 50% of the value of the property or by some other measure the effect of which is that existing property does not support as much credit creation. The funding requirements arising from any loans made are known and meeting those requirements only using permitted sources would be required.

        – Similarly, the cost of capital could not be tiered as you suggest; what would happen is the cost of capital overall would increase and interest rates would increase for everyone. Whilst that would slow property markets in Sydney and Melbourne, it would push the AUD through the roof, fuck the 60% of Australians who have a mortgage and don’t live in Sydney or Melbourne and destroy the most productive parts of the economy (export industries) as well as disadvantaging our businesses versus their OECD counterparts – a great way to trigger a deep recession.

        Why do you say the cost of capital cannot be tiered? It is tiered ALL the time. Every paid interest on a credit card? Personal Loan? Business Loan? etc. Banks are very good at charging different rates for different classes of business and different customers.

        If one bank wishes to hold on to the property investor in existing housing business by cross subsidising to meet the higher costs associated with the funding restrictions on property investment lending they will be undercut by another bank who does not cross subsidise between business lines.

        Regulating credit creation is not difficult. We did it for decades before a bunch of bank economists managed to fool people into believing stopping it would be a good idea.

      • @pfh007 – The differing pricing on credit cards, personal loans, business loans etc as it stands relates to credit risk and product-level competition, not to the method or channel used to raise capital. Regulation always sounds good in theory, but Australia doesn’t have a great history with regulated (including government-owned) banks, in fact all of them (State Bank of NSW, State Bank of SA and State Bank of NSW) collapsed in the late 1980s recession and were eventually bailed out by taxpayers. This is the only historical evidence that we have that privately owned banks are run more prudently than their government owned counter-parts. Ultimately it takes individuals to over-extend themselves on property, and the fundamental problem is not foreigners, banks or the tax system, it’s mostly locals trying to ride the only gravy train that they know.

      • Stitches,

        The differing pricing on credit cards, personal loans, business loans etc as it stands relates to credit risk and product-level competition, not to the method or channel used to raise capital.

        So it doesn’t matter if we stop the banks selling bonds or accepting term deposits from foreign parties with access to zero interest capital? Are you saying that if that channel for raising capital is shut down it would have no affect on rates? The banks are very quick to howl about how every single requirement will affect the pricing of their debt products. They know exactly how much different lines of business cost and if APRA told them that for certain lines they were restricted to certain ways of raising the required funds or particular types of assets for capital adequacy purposes they would pass on the costs to the affected products very quickly and tell everyone that it was the gummints fault. If they cross subsidize and their competitors don’t they will lose business.

        Regulation always sounds good in theory, but Australia doesn’t have a great history with regulated (including government-owned) banks, in fact all of them (State Bank of NSW, State Bank of SA and State Bank of NSW) collapsed in the late 1980s recession and were eventually bailed out by taxpayers. This is the only historical evidence that we have that privately owned banks are run more prudently than their government owned counter-parts. Ultimately it takes individuals to over-extend themselves on property, and the fundamental problem is not foreigners, banks or the tax system, it’s mostly locals trying to ride the only gravy train that they know.

        This is not an argument about public ownership of banks. I have no interest in public ownership of banks. The issue is the regulation of credit creation by banks and reducing the amount of credit creation that is unproductive. The simplest way of doing that is by removing bank credit creation completely and turning the banks into pure intermediaries …. just like they claim they actually are. BUT if we are going to tolerate banks having a special privilege with regard to credit creation it should be regulated to ensure that it is not abused like it has been for the last 30 years. The banks had the chance to demonstrate that deregulated credit creation could work and they blew it. Not that it was ever going to succeed as the pursuit of profit demands that they abuse their franchise

        I think you might enjoy this article

        https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2820176

        Although it describes pretty accurately the misconceptions about how ‘private banks’ operate it still concludes there is a role for them ….providing they are properly regulated.

  6. Now we await new legislation banning freelancer and the gig economy as it is an attack on traditional values and freedom of enterprise of traditional organisations.

  7. Pfh, there are a lot more educated and smart people who know what the problems are who are not in government. Since the government is full of the blind and those who could not care less, nothing is going to change soon. Nothing.
    Australia will need a political and social upheaval before big changes happen. Its sorry but its true. As a nation, we couldn’t give a sheet.

    • Swmcl,

      Eventually pollies do respond if they think their job depends on it. If everyone who understands makes sure everyone they know understands before we know it pollies will start to take notice and act.

      There is a powerful reason for pollies to take notice. Driving the economy away from speculation and towards the productive is powerful positive politics and will guarantee they will stay in power for decades. But it does involve change and most pollies are not leaders they are ‘sales people’ who reflect back what the customer wants. They need to know we want it.

      In my experience, once you explain how our current model works most people are shocked and outraged – even those who have found themselves sitting on large unearned asset price paper gains. I find I encounter very few who seriously try and claim that they ‘deserve’ the asset price gains.

      Pretty much everyone knows that something changed and has gone badly wrong but most are not sure what.

      When ideology is dressed up as some sort of nature law and buried in bulldust it can be hard to spot.

      • Going to need a lot of weed killer, PFH

        I thoroughly agree with you, but…until we kick our politicians out and have a direct democracy there is no chance of anything changing. The vested interests own them

      • “In my experience, once you explain how our current model works most people are shocked and outraged – even those who have found themselves sitting on large unearned asset price paper gains.”

        Not my experience at all, but not everyone can explain it as clearly as you can… certainly not me.

    • The government isn’t blind – the government was taken over by FIRE, including FIRE’s fifth column aka the RBA. The blowing of ever bigger bubbles was entirely deliberate. It lasted as long here, as in Canada, because of the accident of the China boom. Today we are in a far, far worse position than Spain and Ireland in 2008, because they still had substantial industrial bases j- next month for instance, we close the car industry that will have a knock on effect on a couple of hundred companies in the supply chain all to save a pittance (well done Wrecker!). Meanwhile, over the last ten or so years, our most talented people have been leaving in droves and there’s no reason for them to come back. So all that’s left, now mining has passed its peak is the FIRE sector Ponzi, and that can only continue with faster and faster population growth and selling off all our assets, including housing, to foreigners and that means ever declining living standards, a growing divide between a shrinking rich crowd and the rest, and growing social and political hatred. Australia is done.

      • We have become a Latin American commodity economy and hence society. There is a reason homelessness is booming in this supposedly uber rich country

      • Yes, but nothing that cannot be fixed.

        Hopefully fixed sooner rather than later.

        Keep in mind that Germany, Japan, Korea, China all dragged themselves out of the mud in a couple of decades after complete destruction simply by making sure that their few resources were directed to building productive capacity.

        Building productive capacity is what people naturally do when policies are not designed to encourage unproductive speculation….especially unproductive debt driven speculation.

        The changes required do not require ‘great brains’ picking the next big thing.

        The are simply removing some of the positive incentives to speculate and other forms of unproductive activity.

        Remove the biases towards speculation and the productive will fill the spaces as the weeds die out.

  8. mild colonialMEMBER

    What we may need to accept is that we are one big functional primary school, uni campus and retirement village for lots of people to the north of us, that’s our comparative advantage. But once we admit that we need to drastically swing the conversation back to honesty, to planning properly for this and to sharing proceeds fairly. There’s no great need to reinvent the wheel here. There never is. As Even Steven said yesterday, you set up taxes and then you redistribute their collection to reduce inequality. We need the correct conversation, we need the wealth sharing taxes and we need unfortunately, now, because it has turned into such a mess, disruption of nearly every immigration set up we have in place and to start again with openly announced, transparent, uncorrupted, auditable, enforceable programs. and in MB’s case start to see the dignity in wiping bums instead of mocking it all the time. I’m serious.

    • Mild colonial,

      “….What we may need to accept is that we are one big functional primary school, uni campus and retirement village for lots of people to the north of us, that’s our comparative advantage….”

      Perhaps but I doubt it. People prefer to live and die with their families and communities. The people to the north will build what they need in those areas where they live as soon as they can and that will be the last we hear of them. Beach holidays and fuzzy animals petting zoos should remain a goer.

      Trying to pick what is our ‘comparative advantage’ is a mugs game. Our comparative advantage is nothing more than a lot of unearned commodity wealth and whether we choose to consume it or instead convert it into income producing productive assets.

      If we adopted the simple criterion of productive v unproductive the answer is pretty clear.

      Consume only a fraction of our commodity wealth and invest the remainder into income producing assets in Australia or abroad – if we cannot find productive uses for capital there are plenty of people around the globe who can.

      We don’t have to piss our wealth against the wall but we will when we don’t understand the difference between real productive investment and debt driven speculation.

    • Comparative advantage cannot work is such a set up. Our so called “education” sector exports is built around permanent residency – it’s little more than a feeder of the FIRE Ponzi and cheap labour supply, and the FIRE Ponzi, including its exploding population, sucks in ever more imports – as Jacob constantly reminds us. A true education export sector would not use permanent residency as an inducement for education here, but imagine the shake out of that dodgy sector if that were imposed. Not going to happen! Forget “conversation”, we know what “conversation” means these days in the FIRE owned corporate media – we have discussed it ad nauseum. Apart from the occasional crumbs that fall off the table giving us false hope, it’s not going to change because too many people, in politics, the RBA, the banks and the whole RE sector and suppliers are deeply invested in it.. Spain and Ireland were lucky – yes lucky! – to be hit by the GFC when they were hit – before the FIRE sector cancer had eaten up the rest of their productive economy. For the last three or four years they’ve had the strongest growing large economies in the OECD. We still have a lot of talent, but plane loads of it is overseas because of the increasingly Ponzi structure of our economy. Unfortunately, the only change will follow a monumental crash that completely destroys the credibility of this system.

  9. Too late, just take a look at India, massive population of young people, highly educated, skilled and willing to expand their collective barriers. Then look at the top Australian companies, all willing to tap into that human capital market. Then have a look at the Australian government policy, tax and fee the next generation of Australian youth to dead, and also dump climate and environment problems on them as well.

  10. The great irony of Matt Barrie encouraging people to get tech degrees is, once they get them, they probably won’t use them, as the work they’ve trained for has already been outsourced to India on freelancer.com.

    Part of the problem masquerading as part of the solution?

    • Meanwhile we close off opportunities to locals by importing swarms of 457s to do run of the mill IT work. Any surprise locals have been shunning IT as a career option?

    • Correct – both/all of you.
      The sooner you realise you cannot develop IT in this country with India & China doing the same at half the price the sooner you can clearly see the future trajectory of his country. Add that to the astonishingly poor educational performance of our young – how the [email protected]@k are they supposed to compete with their equivalents in say, Singapore?
      Decades of an entitlement mindset and soft touchy feely “more civil servants will fix everything” nanny Lefty government (which faithfully reflects the entitlement mindset) –are about to get the inevitable payoff. Australia forgot that evolution is competitive. It’s no good complaining to the lions if you’re an overweight zebra who couldn’t be bothered to stay fit.
      I see a lot of bloggers are saying the same……

      • Actually Rob, what you are saying is incorrect. The problem in the developed countries and in particular English speaking is the idea that The state should get out of the way or disappear completely. However, without the infrastructure, physical and otherwise, private enterprise cannot (will not) make the jump to the next big thing. These blue-sky projects are high risk, no return money pits that sow the seeds of the next revolutions: Silicon Valley, the Internet, television, the highway system, space exploration… they all started as government backed initiatives. Only when there was a potential for return did private money pour in, first the productive kind (the products of which are FB, Google, MB, Invidia) and now the rentier one (Uber, Freelancer). If Australians want to at least grab the coat tails of the next one they must demand the infrastructure and government focused support. Instead we have the NBN and the energy debacle. It isn’t rocket science but Australians can’t seem to grasp it.

      • JasonMNan
        I do not disagree that organizations like the CSIRO are a good idea. Unfortunately, for every CSIRO there are more than 900 (In Canberra alone) government departments producing the likes of this:
        https://www.accc.gov.au/system/files/Hot%20water%20bottles%20safety%20alert.pdf
        Good work ACCC. Why, without this inspiring article I’m sure many Australians would have ignored the fact that such articles are all over the internet and poured the bloody thing over their heads.
        There has to be a limit to Nannying. Now that we’ve got rid of manufacturing with the help of the Fair Work Act, would someone mind telling me what the lucky country is going to do? Here’s a “difficult” question from the OECD’s ‘Programme for International Student Assessment’ (PISA) level 6 ( In the U.K. and the U.S. only 3% and 2% of 15-year-old students respectively achieve level 6, I assume Aus will perform similarly):
        ”Helen rode her bike from home to the river which is 4Km away. It took her 9 minutes. She rode home a shorter way, 3 Km. This took her 6 minutes. What was Helen’s average speed, in Km/h for the trip to the river and back?”.
        Wow, 7 km in 15 minutes. I wonder how many that is per hour? Gosh, my head is hurting already. It’s not surprising that only 3% of Australia’s peer countries’ students achieved such intellectual prowess…. derr
        We’ll show these Asians a thing or two when the work force migrates to the new high tech era, right? (or should I say “Left”)? Well, realistically, we could certainly do something around food. Over and above that I’m assuming a service based economy will fill in the other 98% when the dirt runs out.
        It’s going to have to…….. As to those of you still desperately hanging on to your beliefs about which end of the political Left is the “right” one, no more needs be said. Somewhere, the realization that life, from cradle to grave is, sadly, competitive, got lost in translation from Asian to English.

      • Granted Rob that there are plenty of government departments that we could all do without and maybe I misinterpreted your comment. I just feel it is importnt to highlight the positive contribution that government can make to a country´s future. I also agree that trashing the education system is counterproductive, however the complicit attitude of the population in this regard is equally if not more reprehensible. Bread and circuses all round.

      • what about atlassian? campaign monitor? etc. there are a few tech companies in Australia, although not promoted at all by govt. The NSW govt sold off the Australian technology park to be CBAs back office rather than look at what atlassian wanted to do.

    • Yep spend years and thousands learning so that you can get casual short low paid gigs. The contract/casualisation in many fields is a kick in the nuts for those who want full time well paid employment to afford a good lifestyle.

      Also why innovate/engineer great solutions for a pittance and let someone else enjoy the spoils off your IP?

      The problem here is not the government but investors, most people aren’t willing to invest in a great idea, they would rather just plow the money into an investment property, leverage up and negative gear. Maybe the government is at fault since they make this path to prosperity the only logical option.

  11. Straya : Bullshit is Us
    The financial collapse of Toys “R” Us this week is an ominous message for Australian bricks-and-mortar retailers including surf retailers, preparing for the arrival of Amazon.
    Ed Husic, shadow minister for the digital economy, asks why has it taken so long for Australian businesses to wake up to the fact they had to engage digitally with customers. Many say Australia had dropped the ball on the global innovation stage due to sheer laziness. And re the impact of global giants such as Amazon on retailers who knew disruption was coming but never did anything about it

    Finkel>> the chief scientist >>says well things are not working out how we planned,, so we need to change how we measure it. Remind you of anything??

    • LOL, do you reckon Husic might have offended a few of his bricks and mortar benefactors with that one? Sure they can engage digitally with their customers whilst their 100s of billions worth of assets slowly grind into the dirt.

    • darklydrawlMEMBER

      Fat zebra’s indeed… As a personal example – I need to get some stuff printed up from a US based company. They suggested (given the shipping and exchange rates) it might be cheaper to get the stuff printed here and we just pay for the license for that to happen. The did the quotes for us. Printing and shipping from door to door from the US was $545 USD. The local print quote (with out shipping) was $455 USD. She was shocked. I then told her about the ‘Australia Tax’. 🙂

      • Exactly, it’s the Australia Tax.
        When all these Aussie STEM graduates complain about cheap Indian IT grad’s taking their jobs what they’re really complaining about is the Australia Tax. In Australia we all pay this tax and it’s the tax that prevents alternatives from existing or developing.
        Yesterday I think it was, someone posted an advertisement or a house for sale in some pissant West Victorian town for $800K. The house itself with land / sewer/ water/ electricity/ roads/ schools….wouldn’t have cost more than $200K in Texas. So why the F does it cost $800K in Horsham Vic.
        Both directly and Indirectly it’s the Australia tax, these taxes start with Sydney/Melb prices and just get added on to the further one lives from the capitals. If the prices for lumber and other building supplies at a Dallas Home Depot store were NewYork prices plus 20% than there’s no way that we’d ever see $200K all up house prices in Dallas. Dallas building supply prices are a fraction of New York prices (often less tan half) and Dallas construction labour is also priced at less than half NY construction labour costs. It’s the sum of these savings that enables Dallas to deliver value while Horsham Vic delivers…well damned if I know what I’d call an $800K prefab house that’s six hours drive from the nearest Aussie capital city, but it definitely wouldn’t include the phrase “good value” ..

      • darklydrawlMEMBER

        Meh, Should have checked for Typos. Local print price was $555 USD. It was cheaper to print in the US and ship it here than it was to merely print it locally in Oz! On this note, there are plenty of products I found in Walmart that are way cheaper than the same produce here in Oz – Some products like Corn cobs I can understand ($0.15-0.25 USD vs $1.50 AUD) – they grow a lot of corn in the US. But why were Aussie produced products cheaper? WTF?

  12. I couldn’t agree more, I’d only add that the biggest change needs to happen at the cultural/social level. Aussie parents need to learn to love STEM and develop a love for Technology in their kids. Unfortunately for Australia this change needs to start with a major rewrite of our Primary school education syllabus, we have so many Aussie kids starting Middle school without the math skills they need to understand and embrace the Sciences. Through their actions these kids are already planning a lifetime of Careers that don’t include Technology, In effect we have 8 and 10 year olds deciding on what choices their 40 something year old selves will have, In all honesty what 40 year old person would ever entrust their most critical decision to their 8 year old kids. This is exactly what we are doing when we allow our kids to flunk out of math while still in Primary school.

    • And those in STEM have been leaving Oz in ever greater numbers for the last 15 odd years as this Ponzi went ballistic. We have heaps of talent OS, but if even our run of the mill IT jobs are being given to 457s, what use (except to the exceptional) a full blown STEM education? But your point is spot on, that reform you call for must accompany a total re-orientation of the economy and it must start now. I suggest people look to Portugal; in 2000 their education results were pathetic, and since then they’ve steadily improved, now they score quite well and they’re determined to keep improving, even while former education stars like Finland have stagnated..

      • “We have heaps of talent OS”. Apart the national disgrace of foreign workers driving wages down by scooping up IT jobs on mass, the other reason many stem graduates leave our shores is the painfully high cost of living in Australia. Why bring up a family in Melbourne or Sydney when cities overseas offer far more opportunities and way better bang for the buck.

      • So bloody true Schillers, unless you live in Silicon Valley/San Fran, then its comparable, minus the opportunities of course.
        Fisho, the reason I brought up Portugal is because they are pretty much doing a lot of what you say needs to be done in education..

  13. ‘……….that lucky free ride is about to go pop’.

    What’s he suggesting? What does he know? The unfortunate truth is that pop is exactly the tonic needed to clear out the excesses and hubris that’s led us to this basket case of an economy and society we now live in.

    • Yep, the ‘pop’ seems inevitable and the cruisy / hopeful delusion that a ‘better’ future awaits those who kneel and chant the pledge of debt-servitude while ignoring the peril it brings has become our swinging rope bridge across the chasm.
      Economic recessions do wonders in cutting out the deadwood and making room for fresh new ideas that can flourish. They keep society vibrant, alert and willing to make changes.
      After so long without a reason to modify our approach to local and cross border economic arrangements that hold promise, it’s likely that the ‘post pop’ era will see nascent recoveries purposely strangled as the collective objective will be to re-build what just spectacularly failed. If our leadership cannot devote resources and strategic thinking to anticipate the outcomes of the many threats we face currently, I’m not encouraged by how they will respond when the crisis comes over the nearby hill.

      • Few people can see the big picture
        And only a rare few of them are willing to do so and don’t lust after power

  14. Kids aren’t studying tech because there’s no IT jobs for them to come out to. That’s because we give them away to Harvinder and Gurpreet with their rubbish IT “qualifications” by the thousands.

  15. At the moment investors have a choice of gearing themselves into property or investing in a smart idea. What would you choose? I hope Matt Barrie sparks some action but somehow I doubt it…

    • Its worse than that, heaps. there are trillions washing around the planet looking for even a 3 to 4 % return
      this money is mostly in superannuation funds who without a return cant pay their managers NOR the investors
      no return from your super fund is like running out of gas in an airplane. HUGE problem

      • Worse than running out of fuel is when some one pinches your juice and saws a half inch off your dip stick.:
        DETECTIVES have raided a series of Gold Coast businesses over concerns of investment fraud.
        Officers from Queensland Police and ASIC executed warrants on three separate businesses including Camori Investments and Paradise Financial Group in a Surfers Paradise high-rise yesterday morning.
        It is believed the three firms are owned by the same person.
        The search warrants allowed authorities to look for any evidence of investment fraud including the misappropriation of client funds.
        Officers reviewed computers and confiscated files while staff were questioned.
        The full investigation is expected to take a number of months.

  16. what the f^*k is wrong with you people??? i will agree that most things are messed up, but the point of opening ones eyes and examining the truth is because it provides options. there are always alternatives. when did you all become such defeatist pussies?

    jesus – when i called pasco as defecting the other day, i did not believe the capitulation would be so quick. fall of singapore all over again??? is it just because you are all old and have fewer tomorrows than me?

    • Ha ha. Like. Big difference between defeatist and cynical though mate. Probably comes from having experienced a few more ‘tomorrows’ than you!

    • 100%

      God knows how the Japan got their act together after WW2 in less than 20 years. Think about that. In the time that has passed since the Sydney Olympics Japan went from bombed out wreck to an economic powerhouse.

      Can you imagine Australians in that situation! No resources, everything bombed to the ground, millions dead. We would still be sitting in the ashes now ‘working through the issues’ and whinging.

      The thing that really irritates me is that even when you spell out what we are clearly doing wrong and what needs to change to fix it all I hear “yeah no”..

      It is not as though what I go on about was not national policy in most of the World until about 30 years ago.

      It is almost as though people resent having their narrative of hopelessness disturbed.

      It is soooo defeatist.

      Oh and if want to know how Japan recovered from WW2 in about 15 years watch this movie.

      Regulation of banking sector credit!

      https://theglass-pyramid.com/2015/09/07/film-night-at-tgp-central-banking-from-the-black-lagoon/

      You know by being “money cranks”.

      • WW,

        Good link

        Not hard to imagine that encouraging banking credit creation towards industries pursuing the Deming approach rather than a bunch of white shoe property developers speculating on their connections to a local council planning department would result in an economy that is not just a bag of wind.

        For decades the Japanese government limited the credit creation that was available to residential housing in order to ensure that more resources could be directed to things a bit more productive than an electric lime splashback.

      • One other point about the Japanese experience.

        Once Japan hit full employment (this applies to any country that hits full employment) the allocation of resources is not merely theoretical it becomes critical. Resources allocated to unproductive crap are resources that are not allocated to productive activity.

        Think how much of Australia’s human resources are allocated to unproductive activity?

        Think how much of Australia’s human resources are allocated to nothing at all and are unemployed or underemployed.

        It is an outrage on a massive scale.

        Fixing it will take some time but the fundamental starting point is to massively restrict banking system credit creation that is being directed to unproductive purposes. That parasitical #fakeinvestment is starving productive activity as the capital inflows supporting the unproductive credit creation drives up the exchange rate and that alone undermines all forms of productive economic activity.

        The old expression starve the beast is most appropriately applied to starving the fake speculative activity in the economy of access to cheap taxpayer underwritten capital.

      • Japan was one of the western most (from American perspective) outposts against the flood of Communism (go a bit further West and you hit China, Northwest = Russia, Southwest = North Korea, Vietnam) so it received enormous funding from the Americans.

        Culturally speaking Japan also benefitted from certain behaviours which make for excellent factory workers (but isnt working so well for them in other industries).

        Finally, Japan was always since a certain declaration by a/the Meiji emperor focused on improving and modernising itself. So again culturally speaking they were more ready for a government that says “Lets go for modernisation round 2”.

        Australia has never suffered for its choices, so it wouldn’t embark on any big efforts in a new direction. If our house-obsession led to a war that almost got us exterminated, I’m sure we’d re-assess.

    • I’ve seen lots of yesterdays but I still get up each morning and marvel at the tomorrows that we’re in the process of inventing. The trick is to avoid Technology whiplash by remaining a part of the development process for as long as you can.
      To be honest ten years ago I thought there was a chance for Australia but than along came China and the GFC the rest as they say is history.

    • 100%

      God knows how the Japan got their act together after WW2 in less than 20 years. Think about that. In the time that has passed since the Sydney Olympics Japan went from bombed out wreck to an economic powerhouse.

      Can you imagine Australians in that situation! No resources, everything bombed to the ground, millions dead. We would still be sitting in the ashes now ‘working through the issues’ and whinging.

      The thing that really irritates me is that even when you spell out what we are clearly doing wrong and what needs to change to fix it all I hear “yeah no”..

      It is not as though what I go on about was not national policy in most of the World until about 30 years ago.

      It is almost as though people resent having their narrative of hopelessness disturbed.

      It is soooo defeatist.

      Oh and if want to know how Japan recovered from WW2 in about 15 years watch this movie.

      Regulation of banking sector credit!

      https://theglass-pyramid.com/2015/09/07/film-night-at-tgp-central-banking-from-the-black-lagoon/

      You know by being “money cranks

    • Pessimism and cynicism sound smarter than optimism. Probably related to the fact that depressed people are more detail orientated than happy people.

      To answer your question, I can sit here and lament the future because if I’m right I’m right and if I’m wrong its a good thing. If I sat here pushing “Jobson Growthe”, “Agile Innovation” then I’d look like a fucking idiot when it doesn’t happen. The grasshopper that thinks summer will last forever.

      To be honest, its just depressing. Our politicians are so blatant. They don’t even try to kiss babies anymore. They will pork barrel to our faces. They will suppress industries in blatant support of their donors. They will walk straight into their ‘regulated’ industries after ‘regulating’ them, on sweet gigs (after having made decisions for those industries that were beneficial to said industry at the expense of the citizenry). They will do all this and more. They will get away with it. They will retire with good pensions, nice houses, and a legacy. Probably have some streets or suburbs named after them in the future. Meanwhile all the people they fucked over are just sore bitter losers who can’t get good jobs. (Even if things went to shit, they’d just retire overseas)

      • ok. look, this is how i see it. we need to go through this to emerge on the other side. but until we have this all blow up, nothing can happen. in essence, we need a good forest fire to sweep through our political economy.

        the more blatant, the closer it is to change. the last few, most blatant actions, are those of a dying system undergoing an extinction burst. what comes after remains to be seen, but either we innovate or perish. also, i would not be so sure that the politicians will keep any of their lucre. why would whatever comes after tolerate that, easy way to raise money and give the populace some closure. if the pollies are very smart, they will run. but given the internet, i do not believe they will be able to hide.

        the hopeless-ness is the narrative changing. this needs to happen as part of the organic process of civilization. if we succeed, it will go down as my generations gallipolli. if we fail, australia ends as a sovereign country. the stakes could not be higher.

        think about it this way. without hitting rock bottom, we cannot start to crawl up. in the meantime, this too shall pass.

      • @T the ‘cleansing fire’ you’re thinking of- its an out of control wildfire once it starts. You imagine the fairytale version of revolution. Where justice prevails in the end, even if you handwave in some stuff about ‘not knowing’.

        If the fire looks scary but we’re saved by a cold front after minimal damage, yeh we might learn and build something better.
        If the fire starts burning a lot of people, things can go sideways in a big way. Modern propaganda is highly effective, as is modern domestic intelligence capability. You don’t want society going through too many waves. I remember watching the protests build up in Ukraine. It looked bad, but not civil war bad. Now they have to redraw their maps. And they got fairly lucky. If Western Ukraine wasn’t right up against NATO aligned nations, if it was instead a nation that sits entirely landlocked between Russia and China, the nation would’ve been consumed whole.

  17. proofreadersMEMBER

    “Give Mr Barrie a cigar.”

    Rather, give Mr Barrie a lifetime supply of the finest Havana cigars for calling Straya out for what it is: morally bankrupt, soulless and inept.

  18. I’ve been at home paying my mortgage and watching Netflix and all this time I should have been structurally changing the Australian economy,

    • Can you help me find one of these gigs where you get paid enough to pay an Melbourne mortgage for sitting on your butt watching TV too?

      • We can’t afford Netflix, can’t afford a mortgage, can’t afford TV, we sit in our rental, pay rent (read as dead money) and pick our bottoms.

    • @Robert and if you find said gig, let me know too because I can only afford a mortgage in Perth… just. Even if I found a good paying gig in Melbs, I wouldn’t live there for reasons LVO can divulge.

  19. You need to all resign yourself to the fact that nothing will actually happen until a crisis of epic proportions hits our economy. There is no point getting all flustered about it. Politicians in this country don’t look past the news cycle, and neither do the people who dish up the news cycle.

  20. I m supposed to be workng today cept I found out Araldite is not water proof, so am waiting for some water proof silicon sealant to arrive
    meanwhile i have the chance to read this stuff. How about this: Avago =Avocado:
    The government’s Chief Scientist, Alan Finkel, says Australia is too harsh on itself and our culture of innovation is suppressed by negativity in the media.
    He and other speakers point to the string of innovation success stories in healthcare, mining, financial services and education.
    Finkel highlights the boom in the avocado industry as one example.
    The big unanswered question is what can the government do to help?
    WW i am lost for words.

    • Yeah – bloody negativity!! Positive thoughts, that’ll get us up and running again! Animal spirits and all that jazz!

      • they tried that and scared the horses:
        The minister overseeing development of the government’s innovation plan admitted that Prime Minister Malcolm Turnbull “has had other priorities” since he famously declared two years ago there was “no better time to be an Australian” because the country could be on the forefront of what some commentators call the fourth industrial revolution.
        Sinodinos, said expectations had been raised too high to be fulfilled.
        “There were all these expectations at the time that suddenly there would be a revolution in Australia,” he said
        WW the punters picked up a wiff they were all about to be replaced by AI. so now sinodinos has some time to tell 3.5million just what their future looks like. Its all happening.

    • Yeah – if you tell them they’re going to get fired – you’ve got your revolution! But if you fire them on the quiet and make all the baby soothing noises … awwww! who’s fault is it you got fired? It’s woo, isn’t it! It’s wooo… it’s all good. That will get you re-elected pretty damned quick!

  21. In regards to creating a software juggernaut company to rival USA’s titans…. nope. Almost impossible as they are just to big and has influenced global coders and software development. I’m afraid we are limited to small software startups/custom needs unless one of those companies decide to start a department or a sub-head quarters here.

    Gadgets and electronic development?… same as above. Japan, USA and China dominate and their influence and ability to come up with products are just to far ahead.

    Automotive?… LOL… we convinced GM, Ford and Toyota to have head quarters here… Global leaders…. and we scared them off and told them they arent needed. They also helped develop local plastic, composite, steel panel, fabric development and knowledge amongst the hundreds of LOCAL and Global branch suppliers here. Now 20,000 thousand jobs gone by end of this year and throughout next year. Design and R&D already gone since last year… big mistake long term… should have atleast convinced the OEMs to produce premium cars here so manufacturing cost got offset by the retail price…. tax benefits and R&D incentives go a long way…… SHAME.

    Space?
    Lol… NASA, Russia and China dominate this and Australia’s best.. or atleast graduates move over to those countries if they want to work in their field.

    Civil and Construction???….. SURE…. Concrete, Mortar, labour and SALES MEN.
    Actual finished products?… HECK NO.
    China is the biggest source of steel products…. MASSIVE numbers over 20 Billion dollars a year imported.
    Engineering and Mining Equipment like Dumptrucks, Bulldozers, Cranes?…. All from Germany, Japan, USA or Europe… BIGGEST imported market from the sector in the last 5 years…. something like 60-70 Billion a year… Numbers might not be right but its on the BIS Statistics source.

    Australia is a banana republic with big banks that thrive on depth…. funny.

      • Like the old mantra “We all have to live somewhere”, the new mantra is “We all have to eat something”.
        .
        .
        .
        Waiting for the day when that gets replaced by yet another mantra “We all have to **ck someone…”

    • SpaceX is smashing everyone with their reusable rockets despite SpaceX not being allowed to hire foreigners. Go figure.

      • They are also not in Australia, and there are plenty of foreigners generally in the US to ensure the availability of skilled people is generally good.

  22. Governments have achieved and maintained the illusion of growth from a property bubble is more the point.

  23. Australia is drifting badly and the current LNP ‘innovation’ initiatives are a complete waste of time and resources. They will contribute very little to national ‘competitiveness’. Those that propose these programs have no clue as to why Australia is not ‘competitive’ and zero idea how countries like Germany, China, Japan, South Korea operate by leveraging technology to create ‘competitive’ advantage and strong national economies. While we focus on debt finance (competing via cost arbitrage) those countries operate at the most fundamental layer which is through the acquisition, manipulation and management of technology to create ‘competitive advantage’. They all have some form of ‘technology-based planning’ and a real long term ‘Grande National Technology Plan’ that promotes ‘sector’ development and allocates R&D, innovation, funding, skills to deliver against those national objectives. The idiots that ‘run’ Australia really do think they can compete with Asia on cost. The US and UK suffers from the some delusion.

  24. While he is completely right that Australian economy is just floating in one huge bubble he appears to be blind that IT and engineering is in one even bigger bubble that is going to burst soon as well.

    Growth mantra is over, we cannot grow economy anymore, it’s too big already (per capita GDP is currently more than what is needed to provide livelihood for a small village).
    It’s time for redistribution of wealth period like the one in mid 19th century during Springtime of the Peoples. Despite my personal hope, there is no way our current overlords are going to learn something from the history – it’s going to be violent again.