On Wednesday, I was interviewed by Ben Fordham at Radio 2GB where I explained how Australia’s households are mired in recession, as evidenced by Tuesday’s weak retail sales.
I also explained why Australia should slash immigration to ease the cost-of-living crisis and raise living standards.
Below are highlights from the interview alongside key charts.
Edited Transcript:
Australia’s been in a what’s called a “per capita recession” for three consecutive quarters. Per person, we’re all going backwards.
We’ve got a situation in Australia, and everyone knows it, we’re running a record immigration program. The population grew by just over 620,000 people last year, which is basically a Tasmania plus another 50,000 people. Those are extraordinary numbers”.
That massive population growth is keeping us out of a “technical recession”, which is basically when you have two consecutive quarters of falling overall economic growth. But the economy is not growing fast enough to keep up with the population growth.
So basically, we’re growing the economic pie via population growth, but everyone’s slice of the pie has been shrinking for three consecutive quarters. And households are copping it the hardest.
Per capita household disposable incomes fell by 6% last year:
So, they’re cutting back on spending. They’re cutting back on retail sales. This is all because of soaring rents, soaring mortgage rates, as well as rising taxes, and other cost of living.
So, we’re basically in a recession. It’s just not called one because of this extreme population growth…
Retail sales in aggregate only went up by 0.8% for the entire year and that’s against population growth as well as inflation of around 7%. So, effectively, sales went backwards by 6% once you adjust for those things.
Basically, households are cutting back because their incomes have fallen and their cost of living has gone up.
It’s a very, very weak economy now and we are in a recession once you adjust for population growth…
We’ve got an economy where we are bringing in more people than the economy can cope with. We’re not building enough houses. We’re not building enough infrastructure. And that’s putting upward pressure on inflation, especially through the housing market.
It’s not just rents, but also the cost of buying a house. Because we’ve got excessive demand.
The number one thing the federal government can do is cut immigration to a sustainable level. The fact that net overseas migration went up to nearly 520,000 last year is just off the charts. It’s ridiculous.
And net overseas migration is forecast to basically stay high forever according to the Intergenerational Report…
They shouldn’t have rebooted immigration so strongly post pandemic. That’s why we’ve got a rental crisis. It’s part of the reason for the cost-of-living crisis.
The federal government shouldn’t have done what it’s done. But unfortunately, it’s doubled down on the stupid policy we had pre-pandemic.
