The Australian Economy: A Weak Record Under Labor Leadership
ft.com
The Australian economy has been faltering under the Labor Party’s leadership, marking a period of economic stagnation and hardship for many citizens. Over the past two and a half years, Australians have faced deteriorating financial conditions, with key economic indicators painting a grim picture of the nation’s trajectory.
Slowest Growth Since 1991 Recession
Australia’s annual economic growth has been dismal, recording the slowest pace since the 1991 recession. Seven consecutive quarters of negative per capita growth underscore the troubling reality that economic activity has failed to keep up with population increases. This sluggish performance highlights a fundamental weakness in the Albanese government’s economic management.
The Reserve Bank of Australia (RBA) had forecast stronger growth, but the economy has fallen short of these expectations. While global challenges and inflationary pressures cannot be ignored, domestic policies and mismanagement have compounded these issues, leaving Australian households worse off.
Employment Growth Driven by Public Sector Expansion
Despite a strong labour market on the surface, the employment gains have largely been fuelled by government-funded initiatives such as the National Disability Insurance Scheme (NDIS). According to the Australian Bureau of Statistics (ABS), the unemployment rate dropped to 3.9% in November, accompanied by a 52,600 increase in full-time jobs. However, this apparent success is heavily reliant on unsustainable public sector spending, rather than organic growth in the private sector.
The underemployment rate also saw a marginal decline, reaching 6.1%. Yet, these figures mask the economy’s overdependence on public expenditure, which reached a record-high share of GDP in Q3, as reported by the ABS. The Labor government’s approach of ramping up infrastructure investments and public consumption spending may provide short-term relief, but it burdens future generations with soaring debt levels.
Ballooning Public Debt
Analysis by Westpac reveals that federal and state government borrowing is set to almost double by 2024-25, reaching approximately 6% of GDP. This explosion in debt reflects a worrying trend of fiscal irresponsibility, as public spending accelerates without commensurate economic returns. While infrastructure and social programs like the NDIS are essential, the lack of strategic prioritization and efficiency in these investments raises serious concerns about long-term economic sustainability.
Soaring Migration Without Adequate Planning
Labor’s open-door migration policy has added to the strain on the economy. Initially forecasting net overseas migration (NOM) of 470,000 for FY23 and FY24, subsequent budgets revised this figure upwards significantly. Over one million net overseas migrants have arrived, exacerbating housing shortages, infrastructure congestion, and cost-of-living pressures.
While migration can drive economic growth, its benefits depend on robust planning and investment in housing, transport, and services. The Albanese government’s failure to adequately prepare for this influx has left many Australians struggling to find affordable housing and access basic services.
Australians Are Worse Off
The combination of slow economic growth, spiralling public debt, and uncoordinated migration policies has left Australians feeling the pinch. Cost-of-living pressures have intensified, wages have stagnated, and the dream of home ownership is slipping away for many.
The Labor government’s reliance on public spending to prop up the economy is a temporary fix that masks deeper structural issues. Without significant reforms to encourage private sector growth, streamline public expenditures, and manage migration effectively, Australia risks falling further behind in global competitiveness.
Conclusion
The past two and a half years under Labor leadership have highlighted critical failures in economic management. As the government continues to prioritise short-term fixes over sustainable strategies, Australians are left bearing the brunt of higher costs, fewer opportunities, and mounting debt. The nation needs a bold and visionary approach to steer the economy back on track and restore prosperity for all citizens.
