Big worries loom for ordinary Australians as economic home truths start to bite

With productivity at its lowest level in 60 years and China facing a downturn, the Australian economy and regular families face a rude shock unless the government does more to stimulate growth and cut the public servce, writes Maurice Newman.

Maurice Newman says Australia faces increasing demand for public services and a declining financial base to support it. Picture: NewsWire / Martin Ollman

China, Australia’s largest trading partner, is facing a structural slowdown in growth. This should deeply concern Australian mineral exporters and government policymakers.

Already, while other reasons are given, an oversupply of steel has resulted in Beijing banning steel manufacturers from buying BHP iron ore. Iron ore is Australia’s biggest export, valued at more than $100 billion a year.

In time, China’s growing economic problems will be felt by all Australians, not just those employed in the mining industry. Last year, around 35 per cent of Australia’s merchandise exports went to China, equal to the next five trading partners.

Yet, when it comes to public policy, it seems Australian governments assume mining revenues and private investment are somehow immune from the political and economic vicissitudes of the nation’s largest customers.

When business leaders like the boss of BHP, Mike Henry, warn that Australia’s complex regulations, slow reform and dangerously high energy prices are harming Australia’s international competitiveness, they are ignored.

Mike Wirth, the CEO of one of the world’s largest energy companies, Chevron, has gone so far as to effectively rule out any additional investment in Australia.

Perhaps energy intensive businesses like BlueScope, the Mt Isa copper smelter and Tomago and Portland aluminium smelters will go broke before governments listen.

And it’s not just big business feeling the pinch. Last financial year there were 12,257 corporate insolvencies - up 45.6 per cent on the previous year.

Mike Wirth, CEO of Chevron, has effectively ruled out any additional investment in Australia.

Increasingly, start-ups are leaving Australia for the US, UK, Singapore and Canada. Over the past twenty years 11,000 have done this, taking their intellectual property and employment opportunities with them.

While the private sector may be struggling, public service employment is booming. At federal state and local government levels it now stands at 2.6 million for an annual cost of $254 billion. Total government expenditure has grown to around 38 per cent of GDP. Gross debt exceeds one trillion dollars.

Understandably, for most voters, these developments and accompanying statistics are beyond comprehension. They have grown up accepting the ideological Robin Hood argument that bigger government is necessary to achieve equality and to protect them from greedy capitalists.

So established has this narrative become that more than 50 per cent of voters rely on government for their main income whether it be in cash or in-kind benefits like health and education.

What the political class won’t tell them is that with the pressures of an ageing population, together with inflation, workers in their 40s today will likely see their retirement age stretched before they can claim a pension. Also likely, their present level of benefits will be reduced.

Indeed, Australia faces the perfect storm of increasing demand for public services and a declining financial base to support it.

Meanwhile, an estimated 14.2 percent of the population now live in poverty compared to around 8.2 percent in 1975. According to the Productivity Commission, the number of people experiencing long-term homelessness has surged by over 26 per cent in the five years to 2024.

Today’s zero emissions policies are hastening this wealth transfer. Ordinary workers are supporting well-placed renewable energy rent seekers.

BHP CEO Mike Henry has warned that Australia’s complex regulations, slow reform and dangerously high energy prices are harming our international competitiveness.

But what about immigration? Surely aspirational new arrivals will take up the slack?

Well, not so far.

Despite a bipartisan immigration policy which has seen some 2.6 million migrants welcomed to Australia over the past decade, living standards have continued to fall and productivity is at its lowest level in 60 years.

Clearly, Australia’s long established public policy position, pushed by both sides of politics favours big government.

Despite a surge in immigration and a sustained commodities boom, a so-called “progressive” agenda, has meant prioritising today at the expense of tomorrow.

Accordingly, the country is fundamentally incapable of defending itself.

No political leader or party can be unaware of this. However, they know there are 2.6 million well-paid bureaucrats who vote and will not support cuts to the public service.

At the federal level alone, since 2005, they have overseen an 88 per cent rise in business regulations and remain deeply committed to red, green and black tape, DEI in the workplace and non-nuclear zero emissions policies.

There is no escaping this reality. Australia urgently needs a political leader who will hold a candid conversation with the people and, instead of the fables being relentlessly fed to them by grifters and Marxists, explain to them what truly gives.

Originally published as Big worries loom for ordinary Australians as economic home truths start to bite