Here’s a sobering thought: Australia’s economy might be stuck in a never-ending cycle of financial strain, with the relentless printing of new dollars fueling migration-driven home loans, while the government’s spending on taxpayer-funded jobs and programs like the NDIS raises eyebrows. But here’s where it gets controversial: Is this a sustainable model, or are we simply delaying an inevitable economic reckoning?*
In a thought-provoking post on X, Freelancer CEO Matt Barrie didn’t hold back. He argued that the surge in Australia’s money supply—up 11% annually—is the primary culprit behind recent inflation. Barrie shared a chart revealing that Australia’s M3 money supply hit a staggering $3.3 trillion in September. For the uninitiated, M3 is a broad measure of money in the economy, encompassing not just cash but also deposits and other liquid assets. And this is the part most people miss: Barrie directly linked this growth to the 11% annual rise in prices, leaving many to wonder if the official inflation rate is telling the full story.
While Australia’s official inflation rate stood at 3.2% in the September quarter—a jump from 2.1% the previous quarter, largely due to soaring energy prices—critics argue that the Consumer Price Index (CPI) falls short. Why? Because it excludes key assets like housing, which many believe are better reflected in alternative measures like the price of gold or bitcoin. Barrie’s analysis suggested a striking correlation: the growth in money supply mirrors gold’s average 11.8% rise in Australian dollars since 2010.
But here’s the kicker: Barrie pointed the finger at two main drivers. First, the issuance of new home loans, largely fueled by record-breaking migration levels. Second, government spending on programs like the NDIS and taxpayer-funded jobs, which he claims are absorbing the majority of new employment. “There are no jobs except taxpayer-funded jobs,” Barrie bluntly stated. This comes as Australia’s migration numbers hit unprecedented highs, with 415,760 net permanent and long-term arrivals in the first three quarters of 2025 alone—a 6% increase from the previous record in 2024.
Daniel Wild, deputy executive director of the Institute of Public Affairs (IPA), didn’t mince words: “The out-of-control levels of migrant arrivals should not be blamed on the migrants. This failure belongs to the federal government alone. The numbers are clearly unsustainable.” AMP chief economist Shane Oliver echoed concerns, warning that the reliance on taxpayer-funded sectors like the NDIS has masked weaknesses in the private job market. Last year, a staggering 80% of new jobs were in public or taxpayer-funded sectors, with the private market creating just 99,000 jobs in 2024.
And this is where it gets even more contentious: AI Group chief executive Innes Willox argued that recent wage increases, disconnected from productivity growth, have fueled inflation—particularly in wage-sensitive sectors. “It is simply unsustainable to rely on government for the majority of job creation in Australia,” he stated. Government spending now accounts for 27.9% of the economy, up from pre-pandemic levels of 21-24%. Meanwhile, the NDIS, with its $46.3 billion budget, is on track to surpass Medicare, prompting reforms to curb its growth.
Prime Minister Anthony Albanese defended the government’s spending, emphasizing the importance of public servants. But the question remains: Can Australia afford this trajectory? With the public sector wage bill hitting $250 billion and the federal government’s wage bill surpassing $40 billion for the first time, it’s a debate that’s far from over.
What do you think? Is Australia’s economic model sustainable, or are we headed for a financial cliff? Let’s hear your thoughts in the comments—agree or disagree, the conversation starts here.
