PAYWALL:

A decline in living standards has become the new normal as rising interest rates, high inflation and stagnant productivity trap the economy in neutral.

Australia’s economic troubles deepened this week when the Reserve Bank of Australia raised interest rates for the fourth time this year, new inflation figures showed entrenched price pressures, and the government’s budget deficit got worse.

Australians will need to get used to this extended post-pandemic economic hangover as the new normal, which threatens to stretch from the current count of four years to become a lost decade for living standards.

Once the world’s economic poster child, Australia has belatedly caught the disease that has been afflicting other Western economies and fuelling the rise of populist politics overseas.

After lifting the official cash rate to a 15-year high of 4.6 per cent and warning that more increases were plausible, RBA governor Michele Bullock belled the cat by declaring the “bottom line is that productivity is doing nothing”.

Australia remains a wealthy nation, and unemployment is low. But economic evidence suggests a malaise has now set in.

The Albanese government appears incapable of a fundamental policy shift that economic experts say is required as a circuit breaker.

Leading academic economist and former RBA board member Warwick McKibbin can’t see anything changing under the current political structure of Labor, the Coalition and One Nation.

“It’s instructive to look at history around the world in these circumstances,” says McKibbin. “You don’t see too many success stories in countries without deliberative corrective actions.

“At some point the distortions will build and cause a political backlash that is either positive or negative.”

The evidence is piling up. The RBA’s preferred measure of underlying inflation has been above the 2 per cent to 3 per cent target for more than 80 per cent of the time over the past four years, only briefly dipping back inside the band in early 2025.

Treasurer Jim Chalmers has a point that fuel prices have soared because of the conflicts in Iran and Ukraine that are beyond the government’s control.

But Bullock made it clear that the homegrown price pressures predating Donald Trump’s February 28 strikes on Iran were her bigger concern.

The treasurer and governor are not totally at odds, but they put different emphasis on the contribution of international and domestic factors driving inflation.

The inflation data shows tradeable goods and services, which are highly exposed to international factors – such as fuel and food – rose a moderate 2.9 per cent over the 12 months to August, compared with 4.5 per cent for non-tradeable goods and services more influenced by domestic factors.

Household electricity bills have also jumped over the past four years as Australia replaces its ageing coal-fired power plants with renewable energy sources that Labor pledged would reduce prices.

Labour productivity has flatlined since 2020, which, as Bullock warns, means economic growth above a mediocre 2 per cent will fuel inflation and real wages cannot grow.

Hence, another rate rise was required on Tuesday, and there is probably more pain to come for borrowers after headline inflation rose to 4 per cent in August, according to the consumer price index released on Wednesday.

“I think the RBA leadership has lost patience and realised the costs of inflation are both economic and political in terms of 25 per cent of the Australian population thinking Pauline Hanson would make a good prime minister,” says Hogan.

“I’d be flabbergasted and despondent if the RBA doesn’t hike again in November.”

On the fiscal side, Chalmers unveiled on Monday an “underlying” budget cash deficit of $22.3 billion for 2025-26 and a “headline” cash deficit of $36.1 billion. The deficits are roughly double compared with the previous year and a sharp reversal from the two initial surpluses when Labor came to office.

On this measure, Labor’s historically high spending is adding to demand pressures and working against the RBA’s attempts to slow the economy, despite Chalmers’ insistence that the government is managing the budget responsibly to play its role in the inflation fight.

The take tax is also at a 20-year high.

The budget deterioration is occurring as tetchy global bond markets push up the cost of government debt to a two-decade high, an unnerving development that Chalmers discussed with financial regulators on Thursday.

Hogan says it is a risky time in the global economy and financial markets because of big structural changes, as evidenced by the “mini crash” in the bond market.

“The low cost of capital for the past 20 years – that world has gone,” he says.

“Governments have been undisciplined on their budget management, and now have competition for debt from big tech investment plans for artificial intelligence and data centres.”

DP Advisory Group director and former Treasury official Dimity Pascoe says Australia is experiencing the “new normal” of stagnant productivity and sluggish economic growth.

EQ Economics managing director Warren Hogan – who has been warning for more than two years that a cash rate of above 5 per cent (which would need at least two more rate rises) will be required to control inflation – says the RBA has given up on its “softly, softly” approach to taming inflation.

Pascoe blames 15 years of policy inertia from successive Labor and Coalition governments following the Howard Coalition and Rudd Labor governments in the 2000s.

“Even if there was a policy change today to the best possible economic reforms, it would take at least a couple of years to implement and about three to five years for the benefits to start to flow through.”

“And if we don’t change policy, a [lost] decade is not unreasonable.”

McKibbin says a circuit breaker is required.

“If nothing changes and the AI boom is not what the most optimistic people think, we will get back to a ‘banana republic’ speech at some point that jolts the political system to reform the economy again.”

McKibbin’s rekindling of the “banana republic” term refers to the landmark radio interview former Labor treasurer Paul Keating gave in 1986, warning that if Australia did not reform and modernise its old-world economy, people’s living standards would suffer.

“If this government cannot get the adjustment, get manufacturing going again, and keep moderate wage outcomes and a sensible economic policy, then Australia is basically done for,” Keating said.

“We will just end up being a third-rate economy... then you are gone. You are a banana republic.”

Keating created the necessary political urgency for the then Labor government to push through tough economic reforms, including slashing tariffs, financial deregulation, privatising government assets, and cutting spending to turn the budget from deficit to surplus.

In contrast, Prime Minister Anthony Albanese and Chalmers assure Australians that the current Labor government’s policies have the nation on the right trajectory.

Albanese is inherently cautious, preferring to assure Australians of his sensible middle-ground approach to managing challenges.

He allowed Chalmers to take a big political risk on contentious tax changes to negative gearing, capital gains tax and discretionary trusts in the federal budget in May, but another big U-turn is highly unlikely.

Piecemeal cost of living handouts

Labor’s record shows it is more likely to focus on piecemeal cost of living handouts, the October 1 ban on credit card surcharges, and industry bailouts such as the latest $200 million federal-state lifeline for the Bell Bay aluminium smelter in Tasmania.

After Bullock called out the productivity problem, Chalmers insisted that his last budget had the “biggest and broadest productivity package in any budget for some decades”.

This included cutting an estimated $10 billion in compliance costs for business, such as for project approvals, tax system compliance, financial sector red tape, international trade and building regulations.

He listed efforts to speed up foreign investment screening, overhaul environmental approvals for major projects, freeze the national construction code until mid-2029 to give builders certainty and work with the states on competition reforms and more consistent rules across borders.

To be sure, there are some useful under-the-radar changes happening. But it is a struggle to find an economist who thinks the government’s current agenda will revive flatlining productivity.

Pascoe says a personal tax system that rewards risk-taking and greater efforts to boost competition and cut red tape are required.

McKibbin says some of Labor’s policies are making the productivity problem worse, despite the government’s claims.

“There is a lot of showcasing and selling things that aren’t true, but not a lot of reform,” he says.

“Government is becoming too large a share of the economy and that is distorting private sector decision-making.

“The labour market reforms were always going to cause productivity problems. Taxes are being raised and destroying incentives.

“Even if you want to keep the revenue base, you need to switch from relying on distorting income tax on hard work to a consumption-based GST.”

For Chalmers, the politics is turning nasty and personal.

Hanson called on him to adopt One Nation’s proposal to turn superannuation into higher take-home pay, and then dutifully resign as treasurer.

The Coalition recycled old social media posts and videos of Chalmers as shadow treasurer heckling then prime minister Scott Morrison and treasurer Josh Frydenberg for interest rate increases and weak productivity.

Angus Taylor accused Chalmers of continuing to act like a media adviser – his role when working for former treasurer Wayne Swan – more focused on spinning the message than fixing the problems.

In response, Chalmers demanded that Taylor specify where the Coalition planned to cut government spending and warned that the conservatives would unleash cuts to Medicare and other services. He also pointed out that Taylor had opposed Labor’s tax cuts at the last election and had pledged bigger budget deficits – at least for the first two years.

The frustration is growing within Labor. In Canberra, a small group of Right faction Labor MPs privately say the government needs to do a better job on economic reform, budget management and productivity.

The Left of the party, which now has a majority in the Labor caucus, has less interest in economic policy and is more intent on blaming the RBA for the government’s problems, says an MP from the Right.

This week, NSW Labor Premier Chris Minns took a veiled swipe at the Albanese government over inflation, saying his administration has been careful with public money, including making difficult decisions to offset new spending, so as not to exacerbate the situation.

Minns declined to defend Chalmers from allegations that his spending was helping drive inflation and higher interest rates.

The premier’s divergence followed fresh criticisms from former RBA governor Philip Lowe, who said the government should be running large budget surpluses and cutting spending to take pressure off inflation and interest rates.

“Australians enjoy one of the highest standards of living in the world,” Lowe told a podcast hosted by The Institute of Public Affairs.

“The problem as I see it is that living standards have stagnated. For seven years now, there’s been no net growth in per capita income. Now that’s staggering.”

There is no love lost between Chalmers and Lowe, who had his seven-year term as governor and 43-year career at the RBA terminated by the treasurer.

Chalmers did not reappoint Lowe after his infamous forward guidance about interest rates being unlikely to rise until 2024 – they rose in 2022 – and replaced him with Bullock to implement the findings of an independent review of the RBA.

But Lowe is hardly alone in his criticisms. Former Treasury secretaries Ken Henry and Martin Parkinson have issued similar warnings about how the budget should be in surplus during a revenue boom and the need to lift productivity to boost living standards.

Of course, Australia could get lucky again, just as it did from the China-driven mining boom of the past 20 years.

“AI could help us win the lottery on productivity,” says McKibbin.

But don’t bet on it.

“My guess is the extreme upside on AI is very low probability,” he says.

PAYWALL:

The government, the opposition and business have rushed to condemn One Nation’s immigration policy as economically reckless but Pauline Hanson said such reactions from “vested interests and elite economists” were to be expected.

As the major parties scramble to finalise details of their own respective plans to reduce Australia’s immigration surge, One Nation has caught both on the hop with a policy that largely mimics that of the Canadian government and aims to reduce the number of temporary and illegal residents by 766,000 over three years.

With an estimated 3 million temporary visas holders in the country – a million more than when Labor came to power – One Nation’s policy primarily targets those on student visas as well as family reunion programs associated with both student visas and the skilled migration scheme.

It ultimately aims to reduce the temporary migrant population to about 2.1 million after three years, which was the level in 2017. After that three years, net overseas migration (NOM) would be capped at 130,000 a year, well below the current rate of 306,000 and Labor’s target of 225,000. The NOM would be negative over the next three years.

The policy does not target the demand-driven primary temporary skilled visa program or the Pacific Labor Mobility Scheme and the Working Holidaymaker scheme, both of which are critical for rural labour.

Temporary skilled migrants would no longer be able to bring in spouses, children and other dependents under One Nation’s plan. Of the 140,000 temporary skilled visas granted in 2026, half were for family members.

“We don’t want [them] coming in as well,” One Nation MP Barnaby Joyce said.

The estimated 80,000 overstayers would be given three months to leave before being deported and hit with lifetime bans.

Australian Chamber of Commerce chief executive officer Andrew McKellar said a cut of 750,000 people and a long-term NOM of 130,000 would impose a shock on the economy worse than the pandemic and drive the economy into deep recession.

The NOM was also negative during the pandemic, but there were economic offsets in the form of hundreds of billions of dollars of government support and stimulus.

“This is a COVID-level shock to the economy without any of the offsets,” McKellar said.

He also said, unlike Canada, Australia’s economy was already so weak it could not absorb such a hit.

“We can’t afford to take a further external shock.”

Health Minister Mark Butler made a similar case. “This is going to smash industries like construction; it would devastate the health sector and aged care and disabilities, which rely heavily on migrant workers, particularly in rural and regional Australia.

“What we need is a careful balance between the ability of the country to absorb migrant numbers and the needs of our economy.”

But the Institute of Public Affairs sided with tthe policy.

“The three-year negative net overseas migration intake is a necessary period of adjustment after record-breaking migration since the end of the pandemic,” the IPA’s Deputy Executive Director Daniel Wild said.

“A massive migration cut will not trigger a recession, as Australia is already in a per capita recession. Instead, cutting migration will boost living standards and ease infrastructure pressures as the Canadian experience demonstrates.”

Opposition Leader Angus Taylor complained the policy had no associated economic modelling.

“I am deeply concerned about what it means for individual farmers, for individual business builders, for public owners, for cafe owners,” he said.

“If they’re going to announce policies like this, they’ve got to be across and … need to come out and explain the answers to those questions.”

One Nation pointed out its policy was similar to that enacted by the centre-left Canadian government of Prime Minister Mark Carney. Beset with similar problems to Australia, Canada imposed caps on foreign students and tightened access to worker visas, causing the size of the overall population to temporarily shrink slightly.

Slower population growth dragged Canada into a technical recession – two quarters of negative economic growth – in mid-2026, which Carney described as “short-term pain” to build a more sustainable economic foundation.

But per-person real GDP – a measure of living standards – turned positive after previously declining for two years.

Asking rents declined for 18 consecutive months by between 4 per cent and 6 per cent in major cities such as Vancouver, Toronto and Calgary.

Speaking at The Australian Financial Review Business Summit in March, Canadian Finance Minister Jean Philippe-Champagne said his country’s cuts were driven by an overriding determination that people should have a hospital bed when sick and to be able to afford a house.

Hanson made the same point. “A larger economy on paper means nothing if Australians are poorer per person and cannot afford a home, find a hospital bed or get ahead. A larger economic pie doesn’t mean anything if individual Australians’ slice of it is getting smaller.”

Link to non-paywalled version of article: https://archive.md/HxwfW

It's been interesting looking at & hearing the discourse from and around the rapid surge in people who have indicated they are intending to vote for One Nation at the next possible chance, and from what I've seen there are several distinct categories such people fall into.

These are as follows:

• The original 5-7% One Nation voterbase: these are the relatively small percent of 'traditional' ON voters who have always been there; these are the ones who fall into the category of things like strict nationalists, Hanson fans and possible xenophobes, misc actual 'cookers' and various other rusted-ons.
• The 'will vote for anyone who lowers immigration the most' group: these people don't seem to particularly care about things like race or ethnicity much if at all, they're just desperate for any party who will actually lower immigration rates below long-term averages and perceive ON as the most likely to do it, regardless how accurate that actually is.
• The 'my suburb has rapidly become more Indian and I don't like it' group: seems to be mostly voters in outer-suburban areas that have experienced the highest percentages and volumes of rapid demographic change since the pandemic. Some of them will code the language around this, and some will just blatantly state this being the reason outright. These seem to be people uncomfortable about their suburbs rapidly changing, whether it's out of a sense of actual racism or simply some kind of sense of self-preservation.
• The 'want less competition for my job/housing' group: mostly frustrated renters/those working in sectors that face the most direct competition from migrant labour, given the perception that it affects them most directly. This has also significantly grown in the tech sector in particular, due to high amounts of imported competition in IT roles.
• The 'anti-major party/want to burn everything down' group: basically wildcards that are so frustrated with the current system for whatever reason they will vote for whatever third party is likely to be able to attain some power, and ON just happening to be that party rather than any particular specific love for them or Hanson herself.
• The 'pro-fossil-fuels/anti-renewables group': seems to consist of actual people who work in or have vested interests in the fossil fuel industry, or who don't believe for whatever reason that renewables would actually be cheaper.

Between those, that covers about the vast majority of the discourse I've seen and heard both online and in the real world.

Are there any others that I'm missing? I was going to put a 'Those who want a MAGA here and love Trump', but weirdly in Australia polling has shown that there's a lot of people who like Hanson but dislike Trump, so god knows how you would even classify that.

Anyway, add all those disparate groups up and it's probably mathematically resulting in the aggregate polling numbers we're seeing for ON at this point in time.

PAYWALL:

The AI gold rush is hoovering up talent across the spectrum, from investment bankers to sparkies. The big loser may be Labor’s plan to build 1.2 million homes.

Data centres in Sydney and Melbourne are offering overtime-pay-fuelled $200,000 incomes for electricians with just two years’ experience, eclipsing the average $80,000 salary for early-career accountants, lawyers or teachers.

The artificial intelligence boom, the largest capital investment shift in generations, is driving an unprecedented demand for skilled trades. Like the energy transition and mining boom before it, the AI gold rush is hoovering up talent across the spectrum, from investment bankers to sparkies. Of electricians who are members of the Electrical Trades Union, 10 per cent are working on data centres – from almost none just a few years ago.

This rapid expansion, which is now butting heads with two other economic transformations, is set to stretch Australia’s technical workforce to its limit. Supporting the data centre rollout, the Albanese government’s target of 1.2 million new homes by 2030 and the energy transition will create severe labour constraints for electricians, plumbers and mechanics alike.

The Burning Glass Institute, a think tank specialising in the future of work, estimates the shortfall is likely to peak at 5,433 (and could easily be higher) in the third quarter of 2028. That’s when energy grid connections are busiest, data centre projects progress through planning stages and housing construction reaches its fastest pace.

“None of them were scheduled with the others in mind. Australia is running three generational builds at once that all need the same workers,” Burning Glass economist and data director Nik Dawson says.

His analysis highlights the ambition and risk of an economy undertaking three hugely ambitious transformations simultaneously while grappling with near-record-low productivity growth.

Australia’s productivity growth rate over the past five years was a measly 0.1 per cent, a far cry from the 1.5 per cent it averaged in the 2000s. The Reserve Bank has said it means the economy cannot grow much faster than 2 per cent without running into supply constraints and fuelling inflation.

“The ambition is good and these three projects are important in their own right. The issue is that they’re all concurrently happening and their peak levels will happen at the exact same time,” Dawson says.

Neither solution, importing skilled labour nor training locals, is an easy fix, and following the money makes one outcome clear: home building, with its squeezed profit margins, is likely to lose the bidding war for talent.

Can we import tradies?

Compounding the shortages is a rising tide of anti-migration sentiment. With Pauline Hanson’s One Nation neck-and-neck with Labor in the polls, importing tradies to fill the gap becomes a less politically palatable solution.

Home Affairs Minister Tony Burke ordered his department last month to change the order in which applications for temporary skilled visas are processed, and at the bottom are applicants who apply from overseas.

At a Labor fundraising dinner at Royal Perth Yacht Club last week, builders told Treasurer Jim Chalmers it was getting harder to attract the skilled construction workers the industry needs to meet housing targets.

While the number of apprentice electricians rose to about 65,000 in 2023-24, the number of fully-qualified electricians has stayed relatively flat, suggesting many junior sparkies either don’t make it through their apprenticeship or aren’t staying in the industry.

Dawson estimated the shortfall in tradespeople in 10,000 different scenarios, all with different assumptions for migration levels and the number of apprentices. In half of those possible futures, the shortfall peaks at more than 5433 electricians and in half, it is below.

For plumbers, the median shortfall is 2354.

How fast can we train tradies? “We’re in a supply-constrained economy ... so if we have more demand due to housing construction, data centres or the energy investment, we just can’t get all of that done in the short run,” National Australia Bank chief economist Sally Auld says.

She says that in an efficient labour market, worker shortfalls cause wages to be bid up, which sends a signal to other workers and school-leavers to choose those higher-paying professions.

That’s the free market and economist Adam Smith’s idea of the “invisible hand” (which moves resources to where they are most needed using price signals) at work. It should help ease shortages and wage inflation.

But the reallocation of resources in the economy is not instantaneous because it takes several years to train in a new profession. “There’s not a lot you can do about supply constraints in the short run,” Auld says.

It takes four years to study and work as an electrician to become fully qualified. If a young person reads this and decides to be a part of the solution, they won’t reduce the shortfall until 2030 – two years after 2028, which Dawson estimates will be the crunch point.

There are also what economists call “information asymmetries”, which is when the imperfect flow of information affects market efficiency. For example, news of pay bumps for electricians may not seep into career counsellor chats with students deciding what to study after they graduate.

These worries are shared by the RBA, which in its latest monetary policy statement warned investment in data centres may contribute to price pressures “by drawing on resources in the construction industry”. However, it noted worker availability was not currently a “significant constraint”.

It’s a reminder that the biggest forces driving our economy depend on jobs that AI can’t replace. It’s also one small way that AI may add to demand for some professions and create jobs, rather than replace them.

Dawson says the government should begin thinking about making trade-offs between these three linked goals – AI, housing and energy investment – rather than assuming they are separate and can be maximised independently.

In an AI gold rush, housing loses

Of the three goals, meeting Labor’s target for 1.2 million new homes by 2030 – which is already behind schedule – is most at risk of delays from shortfalls in trade workers.

“Electricians that are working on data centre projects are earning a big wage premium relative to other big construction builds. So if you’re a housing developer, and you’re on a really tight budget, then you’re naturally at the end of the line for workers, and that translates to delays,” Dawson says.

In the short run, wages reallocate workers between different projects, and the ones with the thinnest margins can bear the brunt of the shortfall.

“It’s overtime that can really drive up our members’ remuneration. If you’re working long hours, which are definitely more common in data centres, you could easily be earning more than $200,000 due to that overtime,” Electrical Trades Union national secretary Michael Wright said.

“But they are not working 38 hours a week; they are working a hell of a lot of hours. That will drive their wage up, as it should. As a result, we are absolutely seeing the residential sector getting stripped.”

In terms of what can be done to fix this, Auld says that more labour market flexibility would allow workers to easily move to states where shortfalls are worse, which Dawson says will be NSW and Victoria.

But expanding the pool is also important, such as by increasing the pipeline of apprentices. Dawson says importing tradespeople from other parts of the world could help, noting it is a competitive field to attract these workers.

“This problem is not just unique to Australia,” he says.

“If you increase migration, then you also need to reduce some of the regulatory burdens around licensing so that we can get them into the workforce quicker and that they’re accredited in their trades.”

Dawson says the biggest risk is not that those three goals are not achieved. The energy transition will happen at some point. The risk is that it is delayed due to a supply-constrained economy that is being asked to do too much.

If that’s right, threats to meeting vulnerable housing targets are not just tax settings and red tape, but the unavoidable reality of the economy that makes economists so unpopular at dinner parties: trade-offs.

PAYWALL:

The Master Builders proposal for a priority migration pathway for construction apprentices is a way to target the migration program to fill genuine skills gaps.

The Albanese government’s decision to delay the release of its immigration policy came down, in part, to the economic cost of slashing migration numbers. It underscores how deeply intertwined Australia’s immigration policy is with prosperity.

Former Treasury secretary Martin Parkinson cautioned last week that sharp cuts to migration would drag on an already fragile economy. Parkinson, who chaired the 2023 review of Australia’s migration program, has urged the Albanese government to pivot the system towards attracting and selecting people who can contribute to Australia, rather than focusing on temporary, low-skilled workers.

A real-life example of that tension is unfolding over construction work for the Brisbane 2032 Olympics. Grappling with tight timeframes, ambitious housing and hotel targets and labour shortages, Master Builders Australia is pushing for a priority migration pathway for construction apprentices. That is a targeted way to fill skills shortages, as opposed to using migration to add a few percentage points to economic growth without undertaking the productivity-enhancing economic reforms needed to lift declining per-capita living standards.

According to The Australian Financial Review’s Queensland reporter Brittney Levinson, the lobby group has called for a dedicated apprentice visa pathway that allows foreign students to undertake trade apprenticeships that are currently reserved for Australian citizens and permanent residents. Master Builders Australia has long championed a specialised migration stream that explicitly recognises construction as a national priority sector.

Queensland is forecast to suffer a 46,000-person shortfall in construction workers by mid-2028, according to analysis by project advisory firm WT in February. The decision to spread the Olympic Games venues around the state is ramping up building costs and leaving other critical infrastructure projects short of workers.

“Local apprenticeships have perilously low completion rates, in part due to poor financial incentives.”

Predictably, the Queensland Council of Unions opposes the Master Builders’ proposal on the basis that an influx of skilled foreign tradies threatens the prospect of higher wages and better conditions for blue-collar workers and undermines job opportunities for local apprentices.

QCU also argues it puts further pressure on the state’s housing, hospitals and public services and creates a new class of workers “vulnerable to exploitation”. It’s a reversion to protectionist orthodoxy at the time of Federation, which was strongly backed by a labour movement founded on improving pay and conditions for union members.

QCU general secretary Jacqueline King’s insistence that “Queenslanders should be able to access Queensland jobs and Queensland training opportunities in the first instance” leans into Pauline Hanson’s anti-immigration rhetoric. It’s a stance that ignores the economic realities of a state’s skilled trades shortage.

Foreign tradies are the very people who would help build the infrastructure and housing projects needed to accommodate a growing population and ease the concerns of local Queenslanders. Skilled migration also has a role to play in offsetting the diminishing apprenticeship completion rates, which are perilously low, in part due to poor financial incentives.

Boosting skilled migrant workers in construction and specialised trades would generate a substantial fiscal dividend for the Australian community. Treasury research published in 2021 found most primary skilled migrants paid substantially more in taxes over their lifetimes than they received in government services and welfare. Primary holders of permanent employer-sponsored visas were estimated to contribute a net $557,000 to the budget over their lives, while skilled independent visa holders contributed a net $386,000.

The government should focus on finding ways to ensure that more Australians who embark on apprenticeships actually complete them. The most common reasons apprentices quit are interpersonal issues with their employer, lack of training, poor working conditions and pay. The government has sought to curb lower wages via incentives as part of its national review into the apprenticeship system. While the government’s $10,000 Key Apprenticeship Program attempts to cushion low wages, throwing cash at the pipeline only goes so far.

Despite the Albanese government’s $1.5 billion injection into fee-free TAFE, barely a third of students have completed their qualifications. Taxpayers deserve a real return on investment. That means focusing not just on initial enrolments but on overcoming the barriers to course completion.

The Master Builders proposal is a way to target the migration program to fill genuine skills gaps in the construction industry. Many international students stay on after earning their degrees and use the student visa as a gateway to Australia’s workforce. Extending a similar pathway to trade apprenticeships is a commonsense move given how vital construction is to the broader economy.

The current scarcity of skilled workers is partly due to a large swath of tradespeople retiring over the past decade while too few apprentices have taken their place. It’s a prime reason construction costs have risen dramatically and put upward pressure on residential housing prices.

Wanted to post this as it's an inevitable fact that governments & countries including Australia are going to need to suck it up and accept the reality that population decline is going to happen at some point.

My main concern is it seems like there is zero will to do any of the groundwork to adjust our economy to this reality and make proper, substantial changes to the existing system or investment infrastructure in order to make it more sustainable.

Seems to me like our authorities regardless of who is in power just want to keep stretching the current system to its limits as its underlying fundamentals get worse & worse on a per capita basis... allowing the wealthiest to enjoy the rest of their lives in luxury before everything collapses and they leave younger gens holding the bag after passing away.

Specifically noting how the article cites this can be offset via "investments that raise productivity, such as education, skills, technology, and infrastructure" and that "migration is not a quick fix."

Article is very long so can't post the full text here, but link to non-paywalled version here: https://archive.md/u03Xn

Data in it does check out though... stats show that the Australian Public Service (APS) employment numbers went from around 141,000 employees in June 2022 to 198,500 in June 2025 (source - https://www.apsc.gov.au/initiatives-and-programs/workforce-information/research-analysis-and-publications/state-service/state-service-report-2024-25/aps-workforce/aps-workforce-size-and-location), so nearly a ~40% increase in just three years which is pretty crazy.

PAYWALL:

Anthony Albanese has intervened to head off a damaging internal Labor Party brawl over immigration by killing off a plan to reduce the annual refugee intake by a third, further complicating the government’s efforts to craft a policy to reduce arrivals.

After The Australian Financial Review revealed the government had decided to reduce the annual humanitarian intake from 20,000, where it has been since 2023, to the long-run base figure of 13,750 next financial year, Albanese said late on Thursday that the annual quota would stay at 20,000.

Only hours earlier the office of Home Affairs Minister Tony Burke had confirmed the fall to 13,750, while the refugee sector had been previously advised of the reduction by the Home Affairs Department. Labor had also changed its policy platform at its national conference in July to give itself the green light to reduce the number below 20,000.

But as unrest stirred inside and outside Labor after the news broke of the cut to the humanitarian intake, Albanese intervened.

“The refugee intake needs to be renewed in the coming budget as the 20,000 places was available for four years,” Albanese said in a text message to the ABC late Thursday afternoon.

“This intake number remains government policy and will be continued in future years, consistent with Australia’s humanitarian commitments and sits beside our strong border security measures.”

Albanese’s decision not only overrides Burke but affects the target set in the May budget to reduce net overseas migration to 225,000 by 2027-28, as this factored in a reduction in the refugee intake.

Resettlement services

A government source who spoke on condition of anonymity said further reductions would now have to be found elsewhere as the NOM remains well above projections at 306,000.

The Financial Review reported that the decision to let the quota fall back to 13,750 was partially based on a need to lower the NOM, but also because there were inadequate resettlement services for so many refugees.

A senior source, speaking on condition of anonymity, claimed the increase to 20,000 was only ever a temporary measure, although this was not communicated in August 2023 when the government announced it was increasing the quota.

Paul Power, the chief executive of the Refugee Council of Australia, said his organisation had been advised by Burke’s department to prepare for a reduction to 13,750.

He said that was a surprise as there was “no indication” until then that the 20,000 quota was temporary. He welcomed the government’s backdown.

Since 2015, Labor’s national policy platform has committed the party to a progressive increase in the refugee intake to 27,000 a year.

“Labor aspires to progressively increase Australia’s government-funded humanitarian intake to 27,000 places per year,” said the party’s policy draft platform taken to the July National Conference.

But on the Saturday morning, while everyone was distracted with the row over Palestine and Israel, this was amended to provide leeway to cut the quota.

“Labor will seek, in the short term, to maintain Australia’s government-funded humanitarian intake numbers at 20,000 places per year while also continuing to aspire to achieving 27,000 places per year,” it now says.

Immigration expert Abul Rizvi said the reduction made sense.

“Inevitable they would do this; 2023 decision to increase intake was a mistake without massive increase in settlement services,” he said on social media.

“Money saved should be used to increase immigration compliance to start dealing with 110,000 unsuccessful asylum seekers in OZ.”

Messy episode

Albanese’s intervention is the latest in the messy episode that has become Labor’s planned immigration policy. Burke was scheduled to announce a suite of measures to reduce migration three weeks ago, but the speech was postponed following disagreements with ministerial colleagues over the impacts of the policy changes.

This included the economic ramifications of reducing the NOM to the budget target of 245,000 this year and 225,000 in subsequent years, as well as domestic political and diplomatic implications.

The government is under pressure to reduce migration from its post-pandemic high as it grapples with the rise of Pauline Hanson’s One Nation amid concern in the community about the impacts of immigration.

Its planned changes to Australia’s migration system will especially target the three million temporary residents on student and worker visas who have applied for other visas after the original one expired, and who often make use of family reunion provisions while in the country.

The government’s backdown came as NSW Premier Chris Minns clashed with his South Australian counterpart Peter Malinauskas over immigration, saying governments had to stop relying on importing foreigners to drive productivity and growth.

“We have to be broader than that,” said Minns, who is backing federal government efforts to curb migration. “That means reducing red tape. It means building new housing. It means being more efficient with energy and infrastructure.

“For too long the country has relied on flicking the switch for inbound migration to juice up the productivity numbers. Australia’s got to get more creative in that.”

Malinauskas said his state needed thousands of workers and that failure was one of housing policy, not migration policy.

Was by far one of the fondest gaming (and PvP) experiences I had during my gaming youth, and blows my mind - how has nobody really made a modern Star Wars game that focuses on the actual lightsaber combat like Jedi Knight 2: Jedi Outcast / Jedi Academy?

Not just a 'modern Star Wars action game where you happen to have a lightsaber' like we've occasionally seen, I mean a game built around the kind of awesome, skill-based lightsaber combat that JK2 had.

The single-player modes were obviously cool & the stories pretty standard but interesting enough, but the multiplayer was where the combat really showed how much depth there was.

You could duel another player and actually feel like you were fighting another lightsaber user rather than just trading health bars, or be in maps like a Quake-type style where you could also grab all the guns/sniper rifles etc. or switch back to your lightsaber, 'force push' people off cliffs, force-kick people in the face, Force Choke people, wall run and all sorts of cool stuff.

And then there was the actual Force skill system where you could allocate points between Light Side, Dark Side and neutral Force powers, which meant you could build your character around different abilities. You could have someone heavily invested in Force Push/Pull and defensive abilities, someone going all-in on Dark Side powers like Force Lightning or Drain, zip around with Force Speed and all other stuff.

It created this weird combination of arena fighter + RPG character build + Star Wars fantasy that hasn't come close to being replicated in any modern SW games and feels like a waste of the IP.

And the thing is, we have vastly better technology now... I would LOVE to see a modern version of this. Surely it would be easy to sell as well, with the SW brand + pushing basically the most popular weapon in cinematic movie history?

You could basically take the concept of JK2's multiplayer and build an entire modern competitive game around it. And I'm not talking about Battlefront's lightsaber combat which is kind of shoehorned in and clunky, but it's fundamentally a third-person action/shooter with heroes who happen to have lightsabers.

Plus the recent 'Jedi' games are designed around fighting AI enemies and progressing through a single-player adventure. The crazy thing is that LucasArts already figured this out more than 20 years ago... yet recently, nothing.

Did anyone else play these games (specifically MP/online) back in the day?

PAYWALL:

IDP Education reported a second year of steep profit declines as it grapples with tougher restrictions on international student numbers across its core markets, warning that the outlook for 2027 does not look much better.

The country’s largest listed provider of student placement and English-testing services posted a 77 per cent decline in net profit to $13.2 million for the 12 months to June 30, following last year’s 64 per cent decline.

Student placements in Australia, IDP’s largest market, declined by 9 per cent, but were dwarfed by major declines in Canada (80 per cent), the United States (66 per cent) and the United Kingdom (20 per cent).

Students from India and China led the fall across all markets, with respective reductions of 39 per cent and 22 per cent.

IDP was once a local favourite among fund managers, particularly after the COVID-19 pandemic, when international student numbers surged. But the market has shifted dramatically as public sentiment on immigration has soured and governments have imposed tougher student visa caps and increased visa fees.

“One down year is a cycle, two is a structure. The market will start asking whether regulatory tightening across Australia, Canada and the UK has permanently shrunk the pool rather than deferred it,” said PAC Partners broker James Nicolaou in a note to clients.

IDP’s annual revenue from student placements fell 16 per cent to $362.9 million, with total student numbers down 27 per cent.

Chief executive Tennealle O’Shannessy sought to reassure investors that the decline in global student numbers and its effect on the company’s results were in line with its expectations, while the company continued to focus on cost-cutting measures and improving student experiences.

But her comments fell on deaf ears, with IDP’s stock losing about a quarter of its value to $1.635 in Thursday trading on the ASX.

Yields – the average revenue IDP earns per student – were up 11 per cent from the previous year to $5586 a placement, driven by higher commissions and better commercial terms with institutional partners in key markets.

That helped offset a 24 per cent decline in earnings before interest, tax, depreciation and amortisation to $126.9 million, but the company’s 2027 guidance was what most unnerved investors.

Evans and Partners Wealth Management noted IDP’s earnings before interest guidance for the 2027 financial year was between $95 million and $115 million, below E&P’s forecast of $117.5 million.

With no end in sight to tougher immigration restrictions, the company is forecasting that the total number of students commencing study in IDP’s core markets will decline by an additional 20 per cent to 30 per cent in 2027.

“Every year of decline makes the eventual cyclical recovery mathematically bigger,” said Nicolaou.

PAYWALL:

What also needs to be done is to directly address the overarching structural problems with a program that is supporting people it was never supposed to cater for.

The E61 Institute’s number-crunching to show what difference a means test would make to the cost of the National Disability Insurance Scheme is a case of the glass being half full.

The centrist think tank, which is run by former Productivity Commission chairman Michael Brenan, says that applying the same income and assets test that determines eligibility for pension and unemployment payments to the NDIS would “generate modest fiscal savings”. This is an understatement.

Means testing the nation’s fastest-growing social program – forecast to cost $56 billion this financial year – would have saved $4.5 billion, E61 estimates, on the $44.3 billion cost of the scheme in 2023-24. That is hardly an insignificant sum. It’s roughly half the cost of building an AUKUS submarine every year.

E61’s analysis of the scheme’s administrative data suggests that a very high 87 per cent of adult participants would still qualify for the NDIS because they already receive the means-tested Disability Support Pension.

The paradox is that when the means test includes the wealthier parents of children on the scheme, 40 per cent of the NDIS’s three-quarters of a million participants would be removed. But the savings generated would be proportionately less, in the vicinity of reining in costs by about 12 per cent, because most of those who would be denied access receive only relatively low-cost support.

Nevertheless, there is an important principle involved in targeting government assistance and requiring those who have the financial capacity to do so to support themselves.

Requiring those who can afford to pay for their own disability services to do so might also help restore the integrity of the scheme.

The NDIS has lost social licence among Australians due to exploding costs, widespread rorts and fraud, and the well-known reality that the program is not only supporting the relatively well-off but also those with relatively less severe problems.

The core problem has been the rules of the scheme, which were originally supposed to provide life-changing support for the relatively small number of Australians with severe and permanent disabilities.

Instead, scope and eligibility creep has significantly increased the number of people receiving support, especially adults and children diagnosed with mild autism who have been the major driver of the explosion in the size and cost of the NDIS.

The Albanese government acknowledged this when it announced in August last year that children with mild autism would be diverted from the NDIS to the new Thriving Kids support program jointly funded with the states.

Labor’s Thriving Kids program, jointly funded by the states and designed to divert children with mild autism and development delay away from the NDIS, got tangled up in the usual federal-state financial argy-bargy.

It took a fiscal bribe in the form of additional federal funding for public hospitals – thereby undermining NDIS reform’s overall contribution to budget repair – for most state and territory governments to agree to fund and operate Thriving Kids services. The remaining holdout is the Crisafulli LNP government in Queensland, thereby living up to the Sunshine State’s long history of Canberra bashing.

E61’s analysis suggests that the savings generated by a means test would be split between $1 billion from adults and $3.5 billion from children based on parental income. Those savings would be reduced in proportion to the extent Thriving Kids succeeds in getting children off the NDIS.

A means test may be no silver bullet for NDIS sustainability. But the substantive point is the number of people based on their lower level of need who are on the scheme but shouldn’t be. What needs to be done is to directly address the overarching structural problems with a program that is supporting people it was never supposed to cater for. This underscores the importance of the Albanese government’s belated reforms to fix the fundamental design problems at the heart of the NDIS’s unaffordable trajectory.

Labor’s plan to limit future growth in the cost of the runaway scheme to just 2 per cent and cut a forecast 900,000 participants by one-third over the next four years hinges on the legislation currently before parliament.

The most important changes include revised eligibility rules based on standardised evidence-based functional assessment of people’s needs, and the independent reassessment participants need to determine whether they continue to receive support when their plans expire. Both those changes appear designed to keep those with less severe disability, especially children and adults with mild autism, off the NDIS.

As part of the horse-trading over the passage of Labor’s changes to investment tax concessions announced in the May budget, the Greens secured an eight-week delay while the NDIS bill was referred to a parliamentary inquiry due to report this Friday. Every day it has been delayed has cost the budget $11.5 million, according to the government.

Despite the objective being to return the NDIS closer to its founding purpose of supporting those who are permanently and profoundly disabled, disability groups are mounting a rear guard action to water down the proposed changes.

Labor appears determined to hold the line on NDIS reform. But the political pressure will build as the legislation returns to parliament next week.

Thankfully, the Coalition appears set to give bipartisan support for the overhaul in the Senate. This is an opportunity to help govern the country and set a more responsible fiscal course that the opposition should seize, as it seeks to rebuild its credibility on budget and economic management under Angus Taylor.

Have google'd around a bit and a lot of the suggestions seem out of date or US-centric, is there any app for Aus that works decently at detecting the number who is calling from a master database or AI or something and can show who the caller is?

The quantity of spam/random foreign language recorded message calls/irrelevant salespeople I get these days keeps getting worse but I also need to take calls for medical or appointment/tradie related stuff so don't want to just block legit people.

Anything good that people are using that actually works well out there people can recommend please & isn't just a crappy spammy app in and of itself?

PAYWALL:

The cost to build a Sydney mid-rise unit now tops $1 million, driven largely by high labour expenses and a nationwide deficit of skilled workers.

A decade ago, developer Don O’Rorke built 300 apartments a 25-minute drive from Brisbane’s central business district for $205,000 each – and sold them for $395,000.

To build that same unit in Coopers Plains today, construction costs alone top $650,000. To break even, O’Rorke would need to sell each apartment for $900,000. To turn an industry-standard 15 per cent profit, he would need $1.3 million each.

The problem? Suburb market prices max out at $750,000.

“That would mean we would make a loss doing the project. We’re not going to do that. We’re not going to be able to raise finance to do that,” the Consolidated Properties Group chief executive tells AFR Weekend.

“We entered into COVID without too much cost inflation and a pretty efficient industry,” says O’Rorke.

“We came out of COVID with prices basically doubling, and building prices don’t tend to go backwards.”

For decades, the cost of building an apartment tracked quietly alongside inflation. Since the pandemic, however, costs have surged far beyond the consumer price index.

The core reason construction costs are still rising is a major shortage of skilled workers, pushing up wages, caused by a large cohort of tradespeople retiring over the past decade while too few apprentices or skilled migrants are taking their place, experts say.

While some areas are more affected by labour shortages than others, data shows it is a national issue that no state has been able to solve, and it is now the main driver in a perfect storm of cost increases stopping typical apartment builds from being feasible.

The national median dwelling value is $930,000, first home buyers cannot affordably buy a house in any capital city and in Sydney, dwelling prices have risen about 10 times higher than the median income.

Economists broadly agree the best way to sustainably control price growth and make housing affordable for future generations is to increase all types of supply, but the cost of building low- or mid-range units is not stacking up as it did before 2020.

Headline inflation has fallen from its quarterly pandemic peak of 7.9 per cent, to 3.8 per cent in the June quarter – although it’s still above the Reserve Bank’s target range of 2 per cent to 3 per cent – but the aspects of housing and new dwelling builds are still rising by 6.8 per cent and 5.8 per cent, respectively.

Figures from Sydney developers Deicorp show the cost of apartment construction steadily increased from an average of $200,000 per apartment in the 2000s to $250,000 in the 2010s, but there was a sharp rise in costs after the pandemic to $550,000.

This is in line with research released by the NSW Productivity and Equality Commission this week that shows it costs more than $1 million to build a typical mid-rise apartment in Sydney.

A breakdown of the costs shows construction is the highest expense at $522,000, followed by the required margin ($175,000), land ($113,000), finance ($119,000), other costs ($76,000) and taxes ($45,000) to make the average unit build cost $1.05 million.

Ray White’s chief economist, Nerida Conisbee, says labour costs are now the main driver of construction price increases, but it’s not the whole story.

“Materials and freight drove the initial surge, but those pressures have eased. What remains is a shortage of skilled trades, rising subcontractor costs and weak construction productivity,” says Conisbee.

“Large state infrastructure programs are also competing with residential construction for the same workers and contractors.”

Changing council rezoning has been proven to increase feasibility by reducing land prices, and federal governments are examining ways to boost productivity through reducing safety-related red tape – but it’s the cost of construction that has risen the most.

Brisbane developer O’Rorke says the biggest factor stopping his typical apartment builds from being feasible is the cost of labour and that can be divided into two parts: skill shortages and worker productivity.

On the latter, O’Rorke said low productivity was a major factor due to the “aggressive” and “militant” CFMEU causing the average days tradespeople were actively working on Brisbane sites to drop to 2.75 days a week.

“You’ve got high costs, but you’re only using a site for two days out of a potential of six days, so that productivity piece really amplifies the higher cost inputs of labour and materials,” he said.

Productivity in Brisbane is almost back to pre-COVID levels due to the state Liberal National government’s work in reforming union behaviour, leaving skills shortages as the major issue not under control.

“There is more demand for construction services than there is supply, and that capacity issue can really only be addressed in two ways,” O’Rorke said.

“One is organic growth – so more apprentices, more people into the workforce, more women in construction.

“The second way is to import capacity. If the federal government were to allow an increase in short-term workers, I am sure the private sector would find a way of accommodating them.”

O’Rorke sold his Cornerstone Living land in Coopers Plains to state government-funded Brisbane Housing Company to build social and affordable housing.

His company switched its focus to building luxury apartments for downsizers, and has two projects in Brisbane’s inner-city suburbs of Yeerongpilly and Newstead in development.

Why do we have a skills shortage?

In 2017, when the cost of building apartments was still feasible, Australia had 1.126 million construction workers, the equivalent of 4.54 per cent of the population.

In 2025, that figure grew to 1.278 million construction workers but at the same time Australia’s population increased 3.03 million people, so the overall number of construction workers has decreased to 4.05 per cent of the population.

Some trades have lost workers since 2017. There are 2700 fewer glaziers, 3900 fewer tilers and 4300 fewer electricians, according to KPMG data.

“For a long time, becoming a tradie fell out of fashion so you had more and more people heading to university,” said KPMG urban economist Terry Rawnsley.

“It’s really tough being on an apprentice wage doing tough, physically demanding work. So people were dropping out of those apprenticeships.

“Plus, you had this older group of tradies who are probably hitting their 50s and going, ‘I can’t work on site any more, so I’m dropping out’.”

Tradies are gravitating towards state government infrastructure projects first, as the pay is more favourable, as well as the renovation and house building space, leaving apartment building at the bottom of the pile, experts say.

“The fact we’ve seen this decline in trades probably tells us that the higher education settings aren’t quite right, and maybe we’re not bringing in enough workers in those trades,” said Rawnsley.

Master Builders Australia NSW executive director Matthew Pollock said getting more people into building trade apprenticeships, increasing apprenticeship completions and reforming the skilled migration system was needed to fix skills shortages.

“The opportunities that construction provides for rewarding careers can be better promoted, especially as a building trade is virtually AI-proof,” said Pollock.

“Fixing the skilled migration system and boosting the number of tradies must be a priority.

“Skills recognition for overseas labour needs to be faster. Sponsorship costs need to be realistic and affordable for builders.”

PAYWALL:

The NSW government will force Sydney councils to make 30-year housing density plans as apartment construction costs surge and changing zoning requirements are found to be an effective way to improve supply and affordability.

It costs more than $1 million to build a typical mid-rise apartment in Sydney as construction costs keep rising faster than the price of apartments, making projects not feasible for developers, the NSW Productivity and Equality Commission has found.

The Minns Labor government is forcing councils to allow development, generating significant backlash from the affluent inner-city councils of Mosman and Woollahra, which are being flooded with apartment development applications.

The commission found that low and mid-rise planning reforms have more than doubled the number of new homes in Sydney that are feasible to build, and it has pushed for further zoning changes.

“Above all, we need to unlock more homes in the east, north, and inner suburbs of Sydney, where high demand for housing goes hand in hand with high feasibility and lower infrastructure costs,” commissioner Peter Achterstraat said on Wednesday.

In response, the Minns government aims to remove more barriers to increasing density in sought-after suburbs by forcing councils to identify land feasible for housing development at least 30 years in advance to prevent future supply blockages in popular suburbs.

If councils fail to provide the strategic plan in two years, the government will step in to ensure housing capacity is delivered through state-led rezonings or other planning reforms.

“We’ve spent the last three years changing the conversation on housing. Now is not the time to lose our nerve and go back to the planning failures that left a generation priced out of home ownership,” Premier Chris Minns said.

“Today we’re taking the next step by making long-term housing planning an ongoing responsibility, not a one-off exercise.”

Woollahra mayor Sarah Dixson said her council had always planned responsibly for future generations.

“Today’s announcement asks councils to fix a problem that Chris Minns and [Planning Minister] Paul Scully have created themselves,” Dixson said.

“In typical fashion, the government has again threatened to override local elected representatives, is ignoring community needs and remains silent on funding and delivery for critical infrastructure that new homes and their residents will need.”

Sydney’s median home value is $1.26 million and home ownership rates in the city have slipped to levels not seen since the 1950s, with dwelling prices about 10 times higher than the median income.

The cost of building a new apartment in a typical mid-rise unit block in Sydney has risen from $660,000 in 2018 to $1.05 million in 2026, the Centre for International Economics found. The median unit sale price in Sydney is $849,068, according to Domain.

Experts like Centre for Independent Studies chief economist Peter Tulip blame NIMBYism and local council zoning restrictions, among other construction issues, for the lack of supply and affordable housing in the city.

Mark Bainey, the chief executive of Capio Property Group, said the changes should help increase the supply of zoned land over time and boost the delivery of housing.

“The state government has done a fantastic job at taking the power away from councils to deliver approvals for developers to create dwellings. So any move where the state government steps in and takes over controls from the council is a welcome one from our perspective as developers,” Bainey said.

High land costs, labour shortages, materials costs, interest rates, land holding taxes, low productivity and time-consuming development application processes are the other major reasons the cost to build an apartment in Sydney is not stacking up.

Bainey said there was a shortage of tradies, and more skilled migrants were needed.

“Particularly in Sydney, we’re in a shortage of qualified trades and labour, and then whatever’s left is going to Brisbane to build infrastructure for the Olympics.”

Property Council NSW executive director Katie Stevenson said Wednesday’s announcement needed to focus on housing delivery rather than simply planning approvals.

“The measure of success is not how many homes fit in a planning document, but how many homes can actually be constructed and when,” Stevenson said.

“We look forward to working with the NSW government on the details of a consistent feasibility framework and the development of practical tools that will help councils understand where and under what conditions new housing can be delivered.”