29/11/2025
The future of the Australian Economy? A macro look…
Most Aussies do not realise how dependent Australia has become on government money
If you count everyone whose salary or income is directly or indirectly funded by government spending, the number creeps toward half the population. I repeat: just over fifty percent of the Australian population is either directly or indirectly funded by the taxpayer 🤯.
Think about this. The Australian government, meaning the taxpayers, spends approximately forty five thousand dollars per person per year. In other words, each Australian effectively costs the government about forty five thousand dollars annually. That includes public servants, teachers, hospital staff, NDIS carers, aged care workers, university staff, defence contractors, consultants, welfare recipients, pensioners, family tax benefits, childcare subsidies. The list goes on.
To cover your own cost to society purely through income tax, you would need to earn around one hundred and sixty thousand dollars per year. That is roughly what it takes for your tax bill to match what the government spends on you. If you earn less than that, you are, from a purely economic standpoint, a net negative contributor to Australian society.
And that is just for a single adult. A typical family of two adults and two children costs Australia approximately one hundred and eighty thousand dollars per year, which includes public schooling and Medicare. For that family to be a net contributor, their combined household income would need to be around four hundred and forty thousand dollars per year 🤯.
So if most Australians and immigrants do not pay enough tax to cover their own cost of living, who is footing the bill?
The answer is simple.
The top twenty percent already pay most of the tax. The top ten percent pay almost half the entire income tax collected in the country. The top one percent of wealthy Australians are literally responsible for holding the entire system up 🤯.
This is a very real structural problem. No nation on Earth can build long term prosperity when a smaller and smaller group of productive taxpayers is carrying a larger and larger group who rely on government income.
As more people depend on government money, there are only two ways the system survives.
The first is to raise taxes on the people who are actually producing.
The second is to bring in more immigrants to widen the tax base.
Both of these strategies come with extreme consequences.
Higher taxes push away the very people a country needs to keep. Wealth creators, business owners, innovators, high earners. These people have options. They can move their tax residency to the United Arab Emirates, Singapore, Malta, Switzerland, Hong Kong, Monaco. And when they leave, they take their productivity with them. I have personally decided to hold my tax residency in Singapore.
This allows me to spend up to one hundred and eighty three days per year in Australia while preventing the Australian government from ever touching my wealth.
The other strategy is mass immigration. That comes with its own pressures: housing shortages, higher rents, lower wages, competition for services, strain on infrastructure, and most importantly cultural tensions. The very thing people are complaining about now is the predictable result of relying on immigration to keep a welfare heavy system afloat.
The scariest part is that when half the country depends on government spending for survival, no politician can cut anything. They cannot shrink the public service. They cannot reduce welfare. They cannot fix the root causes. Why? Because any honest political figure who suggests reducing public spending would be committing career su***de. It is obvious that the fifty percent of Australians who rely on government spending would vote against their own demise. The only thing an Australian politician can do in this situation is promise to spend more. More subsidies. More programs. More grants. More handouts. That is the only way to win votes.
The truth is, this model is not sustainable. A productive society must have the courage to admit when it is drifting off course. Australia has everything it needs to be a powerhouse. The natural resources, the talent, the stability. But it cannot get there if the backbone of the country is a shrinking group of taxpayers supporting an ever growing number of dependents.
A nation becomes wealthy when people create more than they consume. When risk is rewarded. When success is not punished. When people are encouraged to build, innovate, contribute. That is how you strengthen a country. Not by expanding dependence or increasing regulation. Not by punishing the motivated, but by expanding capability and rewarding risk.
Here is my honest prediction.
Australia will rely more and more on mass immigration to fund a growing welfare system.
This will bring economic and cultural tensions.
The economic implications
Did you know that over two hundred billion dollars, mostly from China and India, has poured into the Australian property market over the last ten years. The Australian government does not classify these purchases as foreign ownership because the properties are usually purchased by new permanent residents or newly arrived citizens.
Nevertheless, no society on Earth can handle that kind of money entering its housing market. The economic consequences are drastic. Singapore has now introduced a sixty percent stamp duty to prevent foreign money from inflating their housing market any further.
In the year two thousand, the average Australian house price was four point two times the average wage. In the year two thousand and twenty five, it is almost twelve times the average wage 🤯.
It now takes the average Australian around twenty years to save for a twenty percent deposit. That is three times longer than it took our parents generation.
But the consequences go deeper than money.
The psychological, spiritual and cultural damage will be massive.
What happens to a society when your brothers, sisters, cousins, children, neighbours and friends cannot afford a home? What happens when they realise that even working a full time job and being in the top ten percent of income earners still leaves them with nothing to show for it except a small home in the outer suburbs? What happens when Australians realise the dream of raising a family in a beautiful home is no longer attainable?
They lose hope. They stop having babies.
And when people lose hope, they turn to drugs, crime, alcohol. Society begins to decay. The frequency drops. The energy darkens. Morals collapse.
The cultural challenges of mass immigration will also rise faster than anyone expects. We are already seeing signs of fragmentation and cultural tension. If you have travelled through the immigrant neighbourhoods of Germany, France, Sweden and the United Kingdom recently, then you understand the very real negative effects of mass immigration. If Australia does not wise up soon, I believe we will experience the same consequences within the next ten to twenty years.
The government will also raise taxes to fund the imbalance. It has no choice. The tax burden will increase to a point where getting ahead becomes nearly impossible for the average person. Wealthy and productive people, like many of my friends, will gradually move their money and their lives overseas to Dubai, Singapore and other low tax jurisdictions.
The wealthy will be fine. The lower and middle class will struggle the most.
I personally manage over one hundred million in private wealth, so I know how to navigate this situation for my clients benefit. Wealthy Australians will benefit through the correct investment structures, tax strategies, lower labour costs and rising asset prices.
Sadly, it will be the middle class and low income earners who feel the full impact. The divide between rich and poor will widen significantly, and Australia will gradually lose the cultural identity that once made it such an easy place to live.
This may sound bleak, but it is important to remember that change is a natural part of society. As Marcus Aurelius said,
“Everything changes. That is the law of nature. The wise man does not resist it. He observes, accepts, and remains unshaken.”
The key is to be prepared. We can either suffer from the shift or benefit from it. The choice is ours.
My recommendations for handling the changing Australian economy
• Move online. Location freedom is the key to tax residency.
• Structure your investments correctly. Investment insurance bonds allow you to hold a share portfolio with no capital gains tax.
• If possible, spend fewer than one hundred and eighty three days in Australia to avoid tax residency.
As Marcus Aurelius wrote,
“Do not merely endure change. Turn it to your advantage. The obstacle becomes the way.”
