Australia, once celebrated as the 'Lucky Country,' is sliding toward economic stagnation, with its political class steering it into what some describe as Third-World territory. The nation's economy now ranks 102nd out of 145 countries on the Harvard Atlas of Economic Complexity, trailing behind Bangladesh and Senegal, due to its lack of export diversity and knowledge intensity. This blog piece explores how Australia's political decisions, marked by deindustrialisation, declining research and development (R&D), and reliance on resource exports, have eroded economic self-sufficiency. These policies reflect a deliberate neglect of long-term prosperity, opting for short-term gains for elites while risking the nation's economic future.

Australia's ranking of 102nd on the Harvard Atlas of Economic Complexity signals a troubling decline in economic sophistication. The index measures the diversity and knowledge intensity of a country's export mix, and Australia's position behind nations like Bangladesh and Senegal underscores its growing reliance on raw commodity exports, such as iron ore, coal, and gas. This dependence mirrors the economic structures of less developed nations, often described as "African" due to their resource-heavy, low-value-added economies.

The decline is rooted in decades of policy choices. Since the 1980s, Australia's manufacturing sector has contracted dramatically, dropping to a record low of 5.1% of GDP by Q1 2025, the smallest among developed nations. Economist Gerard Minack highlights that only Canada has experienced a comparable manufacturing collapse, though Canada's sector remains larger at 9% of GDP. This deindustrialisation stems from high energy costs, despite Australia's vast reserves of gas, coal, and uranium. Policies that prioritise exporting these resources to Asia while charging domestic users high prices, have crippled manufacturing, pushing industries offshore.

A critical driver of Australia's economic decline is its plummeting investment in R&D. According to CEDA, Australia's R&D spending has fallen to 1.68% of GDP, the lowest among OECD countries and well below the 3% average. This underinvestment stifles innovation, limiting the development of high-value industries that could diversify the economy. The ABC News chart illustrates Australia's R&D intensity lagging behind other advanced nations, a trend that correlates with the shrinking manufacturing sector. Without robust R&D, Australia risks becoming a "rich, dumb" economy, as described in a Harvard study ranking its economic complexity below Kazakhstan and Uganda.

The political class's failure to value R&D reflects a broader complacency. While countries like South Korea and Germany invest heavily in innovation to maintain competitive industries, Australia's lazy, if not traitorous leaders, have leaned on resource wealth, squandering opportunities to build a resilient economy. This shortsightedness entrenches reliance on volatile commodity markets, leaving the nation vulnerable to global price fluctuations.

Mass Immigration and Capital Shallowing

Australia's extreme mass immigration policy, mirroring Canada's, has exacerbated economic woes. High immigration has fuelled population growth without corresponding investment in capital, leading to "capital shallowing," a decline in capital per worker that harms productivity. Economist Leith van Onselen notes that private business investment has collapsed, mirroring Canada's experience. This policy chooses short-term GDP growth through population expansion, but fails to address the infrastructure and industrial capacity needed for sustainable prosperity.

The influx of low-skilled labour, combined with high energy costs, has further eroded manufacturing, as businesses struggle to compete with cheaper Asian markets. The result is a less diverse economy, increasingly dependent on resource exports and low-wage service sectors, resembling the economic structures of developing nations like in Africa.

Energy Policy Mismanagement

Despite possessing vast reserves of gas, coal, and uranium, Australia's energy policies have driven up domestic costs, accelerating deindustrialisation. The decision to export huge volumes of gas and coal to Asia while charging high prices domestically, has made manufacturing uncompetitive. The ban on nuclear power, coupled with the phase-out of coal-fired electricity, has further increased energy costs, with gas and electricity prices projected to rise. It is planned destruction of the industrial base, once more by our traitorous political elites.

This contrasts with nations like China, which leverage their resources to fuel industrial growth. Australia's political class, by prioritising export revenue over domestic industry, has effectively outsourced economic potential, leaving the nation less self-sufficient. This reflects a deliberate strategy to enrich corporate elites while neglecting the broader economy, a charge echoed in social media discussions lamenting the privatisation of national wealth.

Political Class and Elitism

The political class's role in this decline is stark. Both major parties, Labor and the Coalition, can be criticised for their ties to property investments and resource oligarchs, which skew policies toward wealth concentration. The privatisation of natural resources, as seen under former Prime Minister John Howard, enriched mining figures, while depleting national wealth. This has contributed to wealth inequality, with housing affordability plummeting, median home loans now require 15-20 times an annual salary, compared to 4-5 times historically.

The failure to address these issues suggests a disconnect between politicians and ordinary Australians. Social media posts reflect a growing sentiment that the nation is "directionless, boring, and divided," with wealth inequality and economic malaise eroding quality of life. The political class's focus on short-term gains, through resource exports and immigration-driven growth, has been likened to "burning the country to the ground" by favouring elite interests over long-term stability.

Socially, policies have deepened divisions. The debate over Australia Day, labelled "Invasion Day" by Indigenous groups, highlights unresolved tensions from colonial history. These issues, combined with economic decline, fuel a sense of national "dread," as described in a 2020 Guardian article about unprecedented bushfires.

Government Solutions and Their Risks

The political class's response to economic and social challenges often involves increased control rather than structural reform. Domestically, policies like the 2025 Online Safety Act, aimed at protecting youth from online harm, raise concerns about surveillance overreach, mirroring global trends toward digital control.

These measures risk entrenching a less autonomous Australia, dependent on foreign powers and vulnerable to internal stagnation. The political class's alignment with corporate and foreign interests betrays national sovereignty, pushing Australia toward a "Third-World" economic model reliant on resource extraction and external validation.

Solutions to Reverse the Decline

To halt Australia's slide, systemic changes are needed:

Reinvest in R&D and Manufacturing: Increasing R&D spending to the OECD average of 3% of GDP and subsidising domestic manufacturing could diversify the economy. Tax incentives for high-tech industries and renewable energy manufacturing, as proposed by the Sunshot Report, could create 400,000 jobs by 2040.

Energy Policy Reform: Utilising Australia's gas, coal, and uranium reserves for affordable domestic energy, while investing in renewables, could lower costs and retain industries. Lifting the nuclear ban, as debated in anti-nuclear campaigns, could provide stable energy.

Immigration and Investment Balance: Slash back mass immigration to align with capital investment, which would mitigate capital shallowing, boosting productivity. Policies should choose skilled migrants to support high-value industries.

Community Engagement: Grassroots campaigns to raise awareness of economic mismanagement can pressure politicians to prioritise national interests.

Australia's political class, through decades ofresource exports, neglecting R&D, and pursuing unsustainable immigration policies, has driven the nation toward economic decline. The collapse of manufacturing, high energy costs, and wealth inequality have positioned Australia as a resource-dependent economy, akin to less developed African nations. While the charge that leaders aim to "make Australia the worst country on earth before burning it to the ground" is hyperbolic, the trajectory of deindustrialisation and environmental neglect raises serious concerns. By reinvesting in innovation, reforming energy policy, and addressing social divisions, Australia can reclaim its economic sovereignty and avoid a future of stagnation. Citizens must hold politicians accountable, supporting independent voices like Leith van Onselen to demand change:

https://www.macrobusiness.com.au/2025/07/how-australias-economy-turned-african/