{"id":324635,"date":"2025-12-03T09:17:11","date_gmt":"2025-12-03T09:17:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/324635\/"},"modified":"2025-12-03T09:17:11","modified_gmt":"2025-12-03T09:17:11","slug":"australian-businesses-love-the-ponzi-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/324635\/","title":{"rendered":"Australian businesses love the Ponzi economy"},"content":{"rendered":"

In mid-2023, just as Australia\u2019s net overseas migration was ramping up toward record levels, the mouthpiece of big business, The AFR Chanticleer<\/a>, proclaimed that Australian businesses were \u201clicking their lips\u201d at the prospect of higher migration, \u201cwith few doubting that a bigger Australia is better\u201d.<\/p>\n

\u201cIt is boosting retailers\u2019 sales, increasing landlords\u2019 ability to collect rent, helping miners and contractors find staff, bolstering the big four banks\u2019 customer numbers, lifting pathology providers\u2019 testing volumes, filling up Macquarie\u2019s IT department\u201d, the AFR Chanticleer wrote.<\/p>\n

\u201cYou name it, chief executives are talking about it. For a lot of them, migration is the new growth\u201d.<\/p>\n

On Tuesday, Alex Joiner, the chief economist at IFM Investors, published the following chart<\/a> on Twitter (X) showing how real non-mining sales of goods and services in Australia have grown by 51% since 2002. However, when adjusted for population growth, real sales have remained flat, growing by just 2% since 2002:<\/p>\n

\"Real<\/p>\n

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\u201cA key political agenda to maintain population growth is unambiguously support the interests of big business first and foremost\u201d, Joiner wrote in relation to the above chart.<\/p>\n

Indeed, Australian real corporate sales revenue would barely have grown and profits would be far lower without the strong and continuous influx of migrants into Australia, which accelerated from the mid-2000s.<\/p>\n

\"Cumulative<\/p>\n

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Meanwhile, labour productivity and per capita growth have collapsed alongside the surge in immigration:<\/p>\n

\"Productivity<\/p>\n

The economy\u2019s dependence on immigration, rather than productivity growth, has piqued the interest of Martin Conlon, head of Australian equities at Schroders, who is \u201cbetting against<\/a> Australia\u2019s great Ponzi scheme\u201d\u2014i.e., the economy\u2019s unsustainable mix of high house prices and immigration:<\/p>\n

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An economy driven by, and dependent on, very high house prices that are supported by what Conlon says are unsustainable levels of immigration, is not healthy, and cannot last in the long term.<\/p>\n

\u201cIt\u2019s easy to stand back and say, oh, don\u2019t worry, we can keep on importing people to hold up a Ponzi scheme. No one\u2019s ever been able to hold up a Ponzi scheme forever,\u201d Conlon says. \u201cAffordability has to matter, global competitiveness of wages has to matter. It gets more dangerous when you move a long way away from sustainable policy\u201d.<\/p>\n

Conlon is seeking to short companies and sectors exposed to housing growth, such as banks heavily reliant on mortgage lending and developers\u00a0and property-linked businesses.<\/p>\n

While his view about Australia\u2019s Ponzi economy is certainly correct, Conlon\u2019s\u00a0contrarian stance is risky because government policy often intervenes to support housing. Mass immigration is also used by policymakers as a growth driver.<\/p>\n

However, Conlon argues that high debt levels and affordability constraints will eventually force a correction.<\/p>\n

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Private businesses like toll road operators, retailers, banks, property developers, and education providers love mass immigration because they get to enjoy the easy growth in revenue and profits that comes from an ever-expanding customer base.<\/p>\n

Meanwhile, households suffer from the increased competition and reduced bargaining power at work, rising housing costs, rising infrastructure costs, a degraded environment, and longer and more expensive commutes.<\/p>\n

The hidden costs of a \u2018Big Australia\u2019 essentially consist of massive private taxes, which the government conveniently ignores.<\/p>\n

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Now the Albanese government is doubling down<\/a> on this junk policy by attempting to push immigration higher<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"In mid-2023, just as Australia\u2019s net overseas migration was ramping up toward record levels, the mouthpiece of big…\n","protected":false},"author":2,"featured_media":324636,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":{"0":"post-324635","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/324635","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=324635"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/324635\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/324636"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=324635"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=324635"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=324635"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}