Managed Decline: The Planned Dismantling of Australia, By James Reed
Today a number of articles at the blog will be pursuing a thesis of the decline of the West, including Australia's decline on almost all fronts, as expressed by Greg Sheridan in a recent article in The Australian. Here is a mainstream journalist daring to discuss issues that are also part of the daily grind of blog writers here.
As for Australia, its trajectory toward decline is not merely economic or strategic but deeply cultural, driven by high immigration and multicultural policies that threaten to reshape its identity. Critics, including George Christensen of Nation First argue that deliberate policy choices are hollowing out the nation, leaving it vulnerable to external powers like China and India. This blog piece projects current trends, emphasising how unchecked immigration and multiculturalism could erode Australia's cohesion, economy, and sovereignty, potentially transforming it into a satellite of Asian powers. While acknowledging the nation's historical strengths, this analysis adopts a pessimistic lens, viewing these shifts as an existential risk.
Australia's economic decline is intertwined with its immigration policies. Federal debt is projected to hit $1 trillion in 2025, with state debts like Victoria's $200 billion adding pressure. S&P Global warns of a potential AAA credit rating loss due to fiscal mismanagement, with $27 billion in annual interest payments signalling a precarious future. Productivity has plummeted 5% since 2022, and real incomes have fallen 8%, the worst in the OECD. High immigration, over 500,000 net arrivals in 2024, largely from India and China, exacerbates these issues by driving housing unaffordability and wage stagnation.
Median home prices are nine times the national average income, and 13 times in Sydney, locking young Australians out of homeownership. Immigration fuels demand, with temporary visa holders like international students (40% of inflows) competing for rentals and infrastructure. While immigration boosts GDP on paper, per capita growth stagnates, as noted in my past discussions of Macrobusiness data. The influx of low-skilled workers, rather than high-skilled professionals, further depresses wages in sectors like retail and hospitality. If trends continue, Australia risks becoming an economic vassal, reliant on commodity exports to China and India while its own citizens face declining living standards.
Multiculturalism is straining social cohesion. The 2021 Census showed Australians of European descent dropping to 72–76% from 90% in 1947, with Indian and Chinese ancestry now rapidly growing. By 2050, projections suggest European groups could approach 40% or less of the population if immigration remains at current levels. This shift, coupled with policies choosing diversity over integration, risks fracturing the Anglo-Australian cultural core. As discussed by Richard Miller regarding Ireland and the UK, rapid demographic change in small communities can erode local identity, and Australia's regional towns are seeing similar tensions.
Education reflects this decline. OECD PISA data shows Australian 15-year-olds trailing four years behind peers in Singapore and China, with one-third failing NAPLAN literacy and numeracy tests in 2024. Universities, reliant on international students (many from India and China), lower standards to maintain revenue. This "immigration mill" model undermines educational integrity and fuels resentment among locals. Mental health crises, with suicide the leading cause of death for ages 15–44 and a 50% rise in youth mental ill-health, signal a society under strain, exacerbated by cultural disconnection and economic pressure.
Australia's military weakness amplifies its vulnerability to geopolitical pressures from China and India. The ADF has shrunk to 59,000 personnel from 69,000 in 1990, despite a population increase to 28 million. An aging naval fleet and minimal drone capabilities leave Australia ill-equipped for modern warfare. The Nation First piece warns of China's influence through trade (30% of exports) and strategic moves in the South China Sea. India, while less aggressive, exerts soft power through its diaspora, with Indian-born residents now the second-largest migrant group.
Projecting forward, high immigration could create internal divisions exploitable by external powers. China's economic leverage and India's growing cultural influence could position Australia as a battleground for Asian dominance, with its resources and strategic location as prizes. AUKUS and the Quad offer some protection, but reliance on U.S. support is risky if American priorities shift. Without a cohesive national identity, Australia may struggle to rally against external threats, becoming a de facto satellite state.
Greg Sheridan sees decline but believes leadership and reform can reverse it, citing figures like Matt Canavan who challenge net-zero policies and economic mismanagement. However, this optimism underestimates the cultural and demographic shifts driven by immigration. Sheridan's focus on policy debates like energy overlooks the deeper erosion of national identity. Multiculturalism, unchecked, risks creating a fragmented society where loyalty to Australia weakens, aligning with Alor blog concerns about globalist agendas. Canavan's push for sovereignty is laudable, but the political class's embrace of diversity over unity suggests a steeper climb than Sheridan admits.
Australia's decline is not just economic or strategic but existential, with high immigration and multiculturalism accelerating the erosion of its cultural core. By 2050, demographic shifts could see Australia's Anglo heritage marginalised, with India and China wielding significant influence through diaspora and economic ties. Economic stagnation, social fragmentation, and military weakness leave the nation vulnerable to being "chewed up" by these powers. While Sheridan's hope for reform is not baseless, it underplays the scale of the challenge. Reversing this trajectory requires bold limits on immigration, a reassertion of national identity, and investment in education and defence. Without action, Australia risks becoming a resource-rich but culturally hollow appendage of Asia's giants.
https://nationfirst.substack.com/p/australia-is-collapsing
"Australia is being dismantled.
Not slowly. Not accidentally. But through deliberate policy, cultural sabotage, and institutional decay.
The image of a prosperous, stable nation is now a mirage. Behind it lies economic disintegration, collapsing birth rates, militarised debt, mass psychological breakdown, and a political class unfit for survival, let alone leadership.
But this isn't just an Australian story.
What's happening in Australia is not isolated. It's the canary in the coal mine for the entire Western world. A nation rich in resources, tradition, and stability is being methodically hollowed out; not by war, but by ideology. The same blueprint is being applied in America, Britain, Canada, and beyond. If they can break Australia, they can break any of us."
"Australia is a nation in decline. Across every indicator you can imagine – economy, living standards, social cohesion, crime, health, military capability, the creativity and virtuosity of the arts – we're in serious decline.
This is not an anti-Australian statement. Australia is a first-rate nation whose leaders just now are determining we'll be second-rate. Australia is a nation with a blemished but magnificent history, a nation once of ambition, achievement, accommodation, heroism, turning itself instead into a nation of mendicant mediocrity.
Nationals senator Matt Canavan launched his recent leadership challenge against David Littleproud because he sees that decline and wants something better. The agitation this caused led in part to the Nats deciding, temporarily, to leave the Coalition with the Liberals.
Canavan's leadership bid was not born of personal ambition but policy frustration. He's determined to force his party, and what he calls the "comfortable, coddled and second-rate political class of this country", to confront the grave policy questions that both campaigns comprehensively avoided through the election.
The view of national decline is not confined to mavericks such as Canavan. The great National Party elder statesman, former deputy prime minister John Anderson, tells Inquirer he believes Australia is entering a sustained "structural decline". He looks at the acres of red ink, the oceans of debt happily forecast in the medium-term future in Jim Chalmers' budget, and makes a subtle point.
Australia's national debt appears manageable now, though it's much bigger than generally realised. But, Anderson believes, we've reached the point at which the nations we compare ourselves with, such as Britain and the US, lost control of debt, from which they cannot now escape.
It would be damaging if the Libs and Nats cannot form a Coalition. There would then be no coherent governing party alternative to Labor.
But the recent turmoil has one saving feature: it stems ultimately from policy disagreement. That's the first sign of our political culture making any effort at all to come to grips with our national decline.
There's one important paradox. Australia remains wealthy. Adam Smith observed, "there's a lot of ruin in a nation".
We're a nation in decline but we're declining from a high standard of living and national success. Because we've been so affluent we're like the frog in the slowly boiling pot of water, increasingly uncomfortable but not sure why.
There's no direct comparison, and the example is too stark. But tiny Nauru once had the second or third highest per capita income in the world. Then its luck ran out, meaning its phosphate resources ran out. It then became a much poorer country. Australia is a rich country because of its commodities – iron ore, coal, gas, gold, beef, aluminium, copper, wheat, sheep, uranium. How are we using those riches, will they last?
The OECD, the club of rich nations, conducts the Program for International Student Assessments. These show high school students in Japan, South Korea, Taiwan and Singapore are about four years ahead of their Australian counterparts of the same age in maths. We've gone backwards.
In 2023, our 15-year-olds performed at the level of 14-year-olds 20 years earlier. According to our own NAPLAN tests, in 2024 one-third of our students failed baseline tests in reading and maths. We spend more than the OECD average per student for a below-average result. The more we spend, the worse the results.
We have far fewer students performing at a high level or studying a foreign language than high-performing nations do. Why are we now so comfortably second-rate?
At least we've got fresh air and healthy lifestyle, yes? No. We are obese and overweight, substantially beyond the OECD average. Worse than we used to be. In 2022, two-thirds of Australians were overweight or obese. We have long life expectancy by the standards of English-speaking countries. But in the past few years we registered our first, albeit small, decline in life expectancy. Chronic disease, obesity and mental health problems mean we're unlikely to resume increasing our life expectancy.
Mental health is mysteriously disastrous. Suicide is the leading cause of death among Australians aged 15 to 44. The incidence of mental ill-health in the young has risen by 50 per cent in the past 15 years. A Lancet study shows Australia second only to the US in rising mental ill-health trends.
At least we're a rich country, so we can pay the medical bills? Maybe not in the long run. The Nationals' revolt, Canavan's revolt in particular, arises mainly over energy policy and economics.
The Nationals have established a small, high-quality think tank, the Page Research Centre, led by the impressive Gerard Holland. The next paragraphs draw on its snapshot of economic statistics.
Home ownership, the essence of the Australian dream, for those under 40 is at record low rates. The median home price nationally is nine times the average annual income and in Sydney 13 times.
Fertility rates have plummeted to 1.44 children per woman, the lowest in our history. This is below what demographers call ultra-low fertility. If that persists for a few years it's almost impossible to recover from because the number of women entering child-bearing years becomes so small.
This is not women choosing career over motherhood. There's overwhelming sociological evidence that people are unable to afford to have the number of children they want to have.
Australia's federal government debt this year will reach $1 trillion. It's actually worse than that because there are many billions of dollars of borrowed money in so-called "off budget" expenditures. These aren't registered as normal government debt because they're notionally investments that will generate returns. Classic cases such as the NBN never generate anything like forecast returns.
On top of all this, there are the states' debts. The Victorian government's debt alone will reach $200bn in the next few years. The commonwealth in effect, if not legally, guarantees all this debt.
Credit ratings agency S&P Global accused the Albanese government of hiding fiscal deterioration with so much off-budget spending and said Australia could lose its AAA credit rating. Australia has this rating because John Howard paid off all the national debt and established a sovereign wealth fund, and because high commodity prices boost revenue. But we can't live forever off Howard, and commodity prices are on a downward trend. Losing the AAA rating would increase borrowing costs.
Already Australia will spend $27bn this year paying interest on the debt, which will keep rising.
Long-term Treasury estimates are wildly optimistic because they use ludicrous assumptions. They believe, on the spending side, the National Disability Insurance Scheme will rise by only 8 per cent annually, there will be unprecedented spending restraint across the rest of the budget, there will be no need for increased defence spending, and on the revenue side that productivity, having been disastrously negative for years, will shoot back up to 1.2 per cent positive growth, while governments continue to increase taxation via bracket creep.
Already Australia has a higher top marginal tax rate than the US or New Zealand, and this cuts in at less than twice average earnings, much lower than the cut-in level in the US or Britain. Our deficits and debt will be worse than forecast.
Overall, productivity, that is output per unit of labour, fell by more than 5 per cent in the three years of the Albanese government. Per capita economic growth, higher living standards, are impossible without productivity growth. Productivity has now fallen for five consecutive quarters. In the 1990s reform era it often rose by 2 per cent a year. Australians' real income fell by 8 per cent in the past three years, due to inflation, bracket creep and high interest rates. This was the greatest fall in average income in the OECD, or in modern Australian history.
Australia's settled policies will make matters much worse. Much of the productivity increase in the Hawke-Howard years came from greater flexibility in industrial relations. All that momentum for flexibility stopped the minute Howard lost power in 2007. In the Coalition's decade in office from 2013 it was too cowardly to attempt to promote any significantly enhanced industrial relations flexibility. The Albanese government is re-regulating the labour market and entrenching union power. These dynamics are the deadly enemy of productivity.
Traditionally, Australia's two great economic advantages were abundant commodities and cheap energy. Now Canberra's commitment to net-zero carbon emissions by 2050 means we've much more expensive energy, a dreadful impost we're placing on ourselves. Running a renewables energy system is vastly more expensive than one based on a mix of fossil fuels, nuclear power and renewables. Renewables work at scale in those countries whose topography and rainfall suit hydro-electric schemes.
Net zero is a fraudulent concept, as everyone knows. The idea that eight billion people can live, several billion of them at modern standards, without generating CO2 emissions, or just generating so few emissions these can be offset by planting trees, is utterly ludicrous.
Almost no one in the world really believes it. Almost no country in the world is acting to try to achieve it, only a few deindustrialising European powers and Australia.
The global south has a pass. China promises net-zero emissions by 2060 – these are the folks who promised never to militarise the South China Sea – and India by 2070. Beijing is deploying large amounts of renewable energy but, as Canavan says, it opens about two coal-fired power stations a week.
The US under Donald Trump has left the Paris Agreement and is promoting all fossil fuels. The biggest emitters – China, the US, India, Russia, Indonesia – aren't remotely moving towards net zero. Even the share of global energy generated by fossil fuels has not shifted much despite decades of notional climate action. Many global south nations pay lip service to net zero but continue to expand fossil fuel use.
The evangelical fervour with which the Labor Party and many government-funded elites have embraced net-zero hot gospelling is really contemporary evidence of what critic AA Phillips in 1950 called Australia's "cultural cringe". Australian elites who claim net zero is a global consensus have a classically cultural cringe view of "global" as consisting entirely of San Francisco, New York, Paris and London; certainly not Delhi, Beijing, Hanoi or Jakarta.
Even in London consensus is evaporating. British Conservatives have abandoned net zero by 2050. The more popular Reform UK of Nigel Farage, currently leading the polls, rejects net zero. Even Tony Blair distressed bien pensants by doing what he occasionally does – telling the truth. Net zero is irrational, he said, phasing out fossil fuels won't work.
The Libs and Nats just got creamed at the election, so obviously they should sign up to net zero, or at least so all their enemies say. In fact, whenever the Coalition has fought net-zero nuttiness as an economic issue it has won. When it has gone along with net zero, it has lost. Public opinion for a long time strongly favoured the Indigenous voice proposal. Coalition senator Jacinta Nampijinpa Price campaigned passionately against it and won the debate. Scepticism on net zero doesn't require scepticism on climate change.
The Coalition could easily argue the cost of current policies is crippling, they won't yield any benefit to the climate. Australia will make a no-regrets contribution to reducing its emissions and greening its environment but won't be bound by a ruinous target.
To do this, it would have to campaign constantly and hard – something it seems to have lost the muscle memory for.
Canavan is urging that, or something bolder. The nation deserves this debate. It's not an anachronistic "climate wars" indulgence, it's a rational policy debate.
Australia is pursuing policies of industrial relations rigidity, increased business and corporate regulation, high wages, endless and proliferating universal welfare schemes and payments, and expensive energy. While our commodities exports give us enough money, we can lavishly subsidise some manufacturing in Australia, as the government is currently subsidising steel, but we'll never reindustrialise, never re-establish manufacturing, with these policies.
Canavan points out we've recently lost, or mostly lost, three industries, Urea (fertiliser), plastics and nickel. As we lose companies and whole industries we borrow vast sums of money to pay for government paid workers and congratulate ourselves on job creation.
Our economy is bound to continue declining. This has security consequences. Even this briefest of surveys cannot omit our declining military capabilities. In 1990 we had 17 million people and 69,000 full-time members of the Australian Defence Force. We now have 28 million people and 59,000 full-time ADF members. We've gained 11 million people and lost 10,000 soldiers. We are militarily weaker now than when the Albanese government was elected.
We have the oldest naval surface fleet we've ever had. We've retired one antique and lightly armed Anzac-class frigate. Our six subs are elderly pensioners. We have one type of armed drone notionally in our order of battle. Modern armed forces have hundreds or thousands of different drones. Militarily, we are somewhere between asleep and hopeless.
The overall story of national decline is undeniable. A thousand other statistics could be added.
We've embraced such very poor economic performance partly because the language of economic policy has been utterly corrupted in a George Orwell, Nineteen Eighty-Four-style reversal of meaning. In particular three words – reform, investment and productivity – have been so prostituted of meaning that if anything they convey the opposite of their dictionary meaning.
Thus we get sentences like: The government will reform the care sector by making a greater investment in the workforce in order to lift productivity.
Translated into English that means the government will spend more on the care sector by spending more on workers' wages with a theoretical increase in workforce participation by some beneficiaries of the welfare – thus the fraudulent productivity claim.
In reality it just means more workers in low productivity occupations. It may be good social policy but bears no relation to economic reform or investment and it lowers productivity.
We are in some measure re-creating the Australia of the 1960s when we weren't a failing nation but we were slipping behind. Consequently, we couldn't deal with the disruptions of the 70s.
In 1964 Donald Horne wrote, in The Lucky Country: "Australia is a lucky country run mainly by second-rate people who share its luck. It lives on other people's ideas and although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events around them that they are often taken by surprise."
The disruptions of the coming decade will be more severe than the 70s. Canavan has made a serious, laudable effort to get the nation at least to consider these challenges.
It's more likely we'll continue our recent practice; we'll just look away and assume, without any justification, that decline will always be gentle."
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