Australia's ambitious class is looking for a way out from a high-tax, high-inflation environment that is repelling tech founders, finance guys and young families across the nation, writes Jordan Knight.
“All of my investing group chats have moved to immigration and tax minimisation group chats,” read one post from a popular financial account after Labor’s latest Budget. “Consensus seems to be New Zealand if you don't want too much hassle,” they followed up.
So bad is the economy that many Australians now see their homeland as unliveable and are considering moving to New Zealand. “Thinking about getting a parcel in Wanaka,” one Australian tech co-founder wrote after the budget.
It isn’t just investors or tech bros either. “In my circle we've been seriously considering leaving the country. It's not the same country I grew up in – everything is being or considered to be taxed,” a post on r/AskAnAustralian reads.
My own friend group – themselves successful white-collar workers who have studied and worked hard – have become ‘blackpilled’ about the economy. “We’re working harder for less pay, while the government takes half of it,” one messaged the Monday after. “Why work so hard?”
It's easy to see why so many Australians have woken up with a serious case of anxiety after the latest federal budget. It’s not just anecdotes either – the data speaks for itself. Google search analytics shows the terms “exit Australia” and “leave Australia” spiked around the time of the Budget announcement.
It’s a sad state of affairs when you have a country with extreme mineral wealth, world-leading human capital, and space to spread out, and people are still looking to leave.
Australia's ambitious class is looking for a way out as Labor's high-tax, high-inflation environment repels tech founders and finance guys across the nation. Don’t get me wrong, Australia is in many ways a highly liveable country for the average person. But what’s also missing from the discussion is the ability to build wealth.
A report published by the ABC just weeks before Labor’s budget was released went to a lot of effort to tell us that Australia’s social mobility was still high compared with other countries. Using data from the Productivity Commission, they showed Australia ranking between Sweden and Switzerland for income equality. Which makes sense when it comes to income: where else in the world can a tradesman make upper-middle class money? Only in Australia.
But Australia’s high-income mobility doesn’t necessarily transfer into wealth. A country can still allow people to earn more than their parents while making it nearly impossible for them to own assets, buy property, or build lasting wealth.
Researchers from Carnegie Mellon University found that the best way to build wealth is through property. Specifically, your parent’s property. The findings, reported in the CBS News, found that today, “homeownership depends more on parental wealth than adult income, especially in expensive housing markets.” “Even people who significantly increase their income over their careers are less likely to own a home if their parents were renters than those with homeowner parents,” the report reads.
Put another way, Labor may claim to be on the side for social mobility by boasting about Australia’s high incomes. But by overseeing rapid rise in house prices, they’ve made it so that building wealth is nearly impossible without wealthy parents. Income is only a small part of a healthy economy – especially so in high tax and high inflation times like these.
This was conveniently skimmed over in the ABC article – although another frank admission was made. Labor Assistant Minister for Productivity Andrew Leigh said that “neighbourhoods with more cross-class connection generate higher rates of mobility for children from poorer families”. Put simply, proximity to economic centres boosts the chance for social mobility – it means the kid from the suburbs can work hard and go far.
This used to be a common Australian story. But, as Leigh noted, the opposite becomes true as increased housing costs push lower-income households out of productive suburbs and cities. Once again, the impacts of immigration are never far away. Immigration, by “growing the economy”, increases rental costs and house prices. In doing so, it pushes prices up, and pushes Australians out of areas of economic opportunity, making it near impossible for them to build wealth without having multi-generational property owning families.
Australia is becoming sclerotic and rigid – the chance of building wealth and getting ahead is getting harder. Yes, we have comparatively high incomes, but that doesn’t mean much if it all goes toward paying rent and groceries. It’s no wonder Australia’s ambitious class – tech founders, finance guys and young families – are looking for a way out. As someone messaged me after the budget, “the only avenue for upward mobility in this country now is boarding a flight and flying out of here.”
Jordan Knight is an adviser and director of the National Conservative Institute of Australia. He is a Publius Fellow at the Claremont Institute, known as the nerve centre of the American right, and the founder of Migration Watch Australia.
