Australia’s per capita recession to roll on and on

January 22, 2024

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The New Daily’s Matthew Elmas has followed the well-worn Australia trope of obscuring Australia’s deteriorating per capita living standards by focusing on aggregate data.

Elmas argues that “strong” migration will “save Australia from recession in 2024”, but at least admits that households will suffer “continuing financial pain” and that Australia’s rental crisis will likely worsen on the back of the extreme population growth, “because supply can’t shift to meet demand”.

“Analysts predict a per-capita (population-adjusted) downturn will likely continue into 2024 as consumers, which account for two-thirds of the economy, struggle with financial pressures”, Elmas writes.

“But Oxford Australia’s head of macroeconomic forecasting Sean Langcake said that budgetary pain will be tempered in aggregate because population growth is set to remain quite strong”.

“In other words, while individual families are doing it tougher and spending less on goods and services, there are enough new people coming into the economy to ensure growth continues”.

“That should translate into annual GDP growth remaining above 1%, Oxford predicted, which would be well below the 2.1% posted over the year to the September quarter”.

“It’s still very much a population growth story”, Langcake said of Australia’s growth prospects”.

Who cares if Australia’s economy grows in aggregate when everybody’s slice of the economic pie continues to shrink and the housing crisis continues to worsen? This is pure Ponzi-economics.

The reality of the situation is that Australia’s per capita GDP has fallen for three consecutive quarters to be down 0.3% over the year to September 2023:

This 0.3% annual decline in per capita GDP was driven by a sharp 1.9% fall in per capita household consumption:

This followed a record 6% collapse in real per capita household disposable incomes over the same period to be tracking around 2011 levels:

The only thing keeping the Australian economy from plunging into a technical recession is the nation’s unprecedented immigration-driven population growth, which is projected to remain turbo-charged in 2024.

Thus, 2024 will be another year where the nation’s economic pie does not expand as quickly as the population grows, meaning everyone’s slice of the economic pie will continue to shrink and living standards will continue to fall.

Sadly, by focusing on aggregate outcomes over per capita, politicians and the media deliberately obfuscate the destruction of individual living standards.

Running a mass immigration policy is the easiest way for policymakers to paper over the economy’s cracks.

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January 22, 2024

0 2 minutes read