{"id":620568,"date":"2026-06-04T10:08:09","date_gmt":"2026-06-04T10:08:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/620568\/"},"modified":"2026-06-04T10:08:09","modified_gmt":"2026-06-04T10:08:09","slug":"australias-gdp-figures-are-meaningless-when-the-boom-in-datacentres-means-destroying-jobs-and-the-climate-greg-jericho","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/620568\/","title":{"rendered":"Australia\u2019s GDP figures are meaningless when the boom in datacentres means destroying jobs and the climate | Greg Jericho"},"content":{"rendered":"

The March GDP figures<\/a>, not for the first time, showed that the focus on economic growth seems rather foolish when you place it within the context of the climate crisis. While the economy did grow in the first three months of this year, the big driver was investment in datacentres, which a new report on Wednesday revealed is greatly increasing the risk to the climate and Australia\u2019s environment.<\/p>\n

You probably could do worse than say that the March GDP figures suggest Australia\u2019s economic growth will \u201cpush up power prices, prolong the use of polluting coal power stations, increase gas generation, and derail the progress we are making towards our climate goals\u201d.<\/p>\n

That quote, however, was not about the GDP but by the Climate Council talking<\/a> about the boom in datacentres.<\/p>\n

But, to be honest, it almost comes to the same thing.<\/p>\n

In the March quarter Australia\u2019s economy grew 0.3% \u2013 not a great result, but given the annual growth of 2.5% still fairly solid:<\/p>\n

If the graph does not display click here<\/a><\/p>\n

But the real issue is what drove that growth.<\/p>\n

In March, the biggest contributor to growth was private investment in machinery and equipment. Indeed, it was larger than total growth. This is because Australia\u2019s net trade went backwards (we imported a lot more than we exported):<\/p>\n

If the graph does not display click here<\/a><\/p>\n

Ironically a lot of the increase in imports was for the machinery and equipment that go into datacentres.<\/p>\n

The surge in private investment was essentially all in the \u201cinformation technology and communications industry\u201d, which covers those datacentres, and the increase was overwhelmingly in machinery and equipment rather than new buildings.<\/p>\n

If the graph does not display click here<\/a><\/p>\n

That matters because building the datacentres is what employs people. Anyone waiting for a jobs boom from actually running the datacentres will be waiting a very long time. The whole point of datacentres is to not employ people (and to reduce human work in other industries).<\/p>\n

The increase in datacentre investment was so large that, without it, non-mining investment would have actually gone backwards in March and would have increased only marginally over the past year:<\/p>\n

If the graph doesn\u2019t display click here<\/a><\/p>\n

So the big driver of the economy are things which the Climate Council estimates will go from accounting for 2% of our national electricity use to 6% by 2030 and 12% by 2050.<\/p>\n

That is rather important given last week\u2019s quarterly greenhouse gas emissions<\/a> figures (which really should get as much attention as the GDP figures) show that falling electricity emissions are the major reason why we have had any fall in emissions (if you exclude land use).<\/p>\n

If the graph does not display click here<\/a><\/p>\n

We either will need to massively increase our use of renewables and batteries or datacentres will effectively destroy our ability to reduce emissions to net zero.<\/p>\n

Destroying the climate while destroying jobs \u2013 but hey, at least GDP is rising!<\/p>\n

Profits also fell in the March quarter but it was all due to mining. Non-mining sector profits rose:<\/p>\n

If the graph does not display click here<\/a><\/p>\n

Household spending rose in the March quarter \u2013 but half of the increase was due to a jump in spending on electricity and gas as the government rebates ended.<\/p>\n

If the graph does not display click here<\/a><\/p>\n

But spending on your electricity bill is good for the economy because GDP increases!<\/p>\n

When you take into account population growth, per capita household spending fell. So well done to the RBA for raising rates twice in a quarter where households were already on average cutting back:<\/p>\n

If the graph does not display click here<\/a><\/p>\n

We can also thank the RBA for reducing household living standards. Real per capita household disposable income fell 0.7% but nearly half of that was due to the increase in interest rate payments.<\/p>\n

And that leaves us wondering about what actually is important in the economy and whether we are really capturing it.<\/p>\n

Households generate growth by spending more on electricity and investments in datacentres will increase greenhouse gas emissions. Meanwhile growth is slowed due to lower mining industry profits and exports not matching the jump in imports of equipment for datacentres.<\/p>\n

If you\u2019re starting to think GDP might not really capture what matters in life, you very much are not mistaken.<\/p>\n

Greg Jericho is a Guardian columnist and chief economist at the Australia Institute<\/p>\n","protected":false},"excerpt":{"rendered":"The March GDP figures, not for the first time, showed that the focus on economic growth seems rather…\n","protected":false},"author":2,"featured_media":620569,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":["post-620568","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/620568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=620568"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/620568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/620569"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=620568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=620568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=620568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}