Something has gone wrong at Deloitte Access Economics. Although they can’t quite bring themselves to say it out loud, they are now in full agreement with MB, that the immigration-led economy is now disaster for Australians.
“Meanwhile, the outlook for the Australian economy remains soft. When data for the December quarter of 2023 is released by the ABS, Deloitte Access Economics expects it will almost certainly show Australia’s economic growth rate has dipped below 2% for the first time in three years.
“That shouldn’t come as a surprise given the RBA lifted the cash rate by 425 basis points through 2022 and 2023, with many Australian households struggling as a result.
“While the spending of migrants and older Australians who have avoided mortgage rate pain is helping to stave off recession, the outlook for growth in the Australian economy is modest at best.
“If realised, and excluding the pandemic period, the forecast growth of 1.3% in calendar year 2024 would be the weakest since the early 1990s recession. Deloittte Access Economics therefore expects 2024 to be a year when the mindset of economists and policymakers shifts from lowering inflation to raising economic growth.
…“It’s a mouthful, but real household disposable income per capita is one way of measuring how the economy ‘feels’ to everyday Australians. It is calculated after taking account of inflation and population growth, and after taking account of taxes and mortgage payments. The boost during the pandemic was helped by stalling population growth, but it was also helped by government payments designed to support households and businesses.
“It’s no surprise, therefore, that when those payments were withdrawn, and population growth returned at full throttle, real household disposable income per capita declined. Deloitte Access Economics estimates that households are experiencing a total peak-to-trough fall of almost 9%, measured on a financial year basis. In fact, real household disposable income per capita is expected to remain below the trend seen between the 2008 financial crisis and the pandemic for at least the next five years.
“That means economic conditions will keep feeling pretty tough for a while yet.”
“And so, as the disruption of COVID-19 recedes from view, the Australian economy is likely to be heading back to where it was before the pandemic stole the headlines. That will likely mean that by the end of 2024, the primary economic challenge for the country will not be lowering the rate of inflation, it will be lifting the rate of growth.
“What then? Lower inflation, the return of real wage growth and the potential for interest rate cuts in the second half of 2024 will have Australian households breathing a sigh of relief. But more robust longer term growth prospects would require some economic reform. Tax policy tops the list, as it has done for more than two decades – the last major tax reform was the introduction of the Goods and Services Tax in 2000.
Sure, that would be good. But let’s begin by not doing ourselves more harm and get real household disposable income per capita moving again:
Cutting immigration to 100k or below would deliver a range of immediate and material benefits:
- inflation will fall faster;
- wage growth will stay stronger;
- interest rates will tumble;
- housing construction will accelerate
- productivity will rise with debottlenecked cities;
- pressure will come off rents and building costs.
Real household disposable income per capita will boom higher.
Cut immigration to boost growth and living standards!
