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Doomsayers in Australia proved wrong again as businesses expand and prosper despite Trump turmoil [1]
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Date: 2025-09-01
Australia’s mainstream media newsrooms want voters to believe the blatant falsehoods that the economy is deteriorating and the reformist Labor Government led by Anthony Albanese is to blame.
Rupert Murdoch’s Sky News is running a mendacious campaign asserting the economy ‘is hurtling off a cliff’. His national daily, The Australian, claims the nation has a ‘new home building crisis’. The right-wing Coalition, now in Opposition, is shouting into the void that ‘Labor has regulated the economy into a pulp.’
Fortunately, these dire false narratives are all debunked by the actual outcomes published by Treasury, the Finance Department, the Australian Bureau of Statistics (ABS) and by Australia’s highly profitable corporations.
These show two stark realities – that the economy suffered disastrously under the Coalition – which lost office after nine years in 2022 - and is now rebounding rapidly.
Business gives Labor a huge vote of confidence
Last week’s ABS update on capital expenditure by Australia’s private sector confirmed both observations – that business investment collapsed under the Coalition, and is now recovering. See chart below.
Capital expenditure by Australia’s businesses. Source: Australian Bureau of Statistics.
From highs above $210 billion under Labor’s Julia Gillard after the Great Recession, capital investment slumped badly through the Coalition years, down to just $144 billion in 2020-21.
What makes this so appalling is that during those post-Great Recession years, the rest of the world enjoyed strong economic growth, buoyant employment, healthy wage rises, flourishing trade, record capital investment and excellent corporate profits. Government budget surpluses then enabled substantial debt repayment.
Capital expenditure surged in the USA in 2017. It also increased in Spain, the Netherlands and across the Euro Area.
Australia in 2017, in contrast, recorded the lowest capital investment in almost a decade. This declined further in 2020 and 2021, as investment shifted elsewhere.
The second clear message from the chart above is that those dismal days are gone.
Record business start-ups
In the year to June, Australians started 437,150 new businesses and shut down 370,500. That’s a net increase of 66,650, ending the year with an all-time high 2.73 million firms operating. That’s well above the 2.40 million at June 2021.
Industries with the highest growth in business counts were:
Health care and social assistance, up 6.6%,
Transport postal and warehousing, up 5.1%, and
Financial and insurance services, up 3.7%.
Construction saw a net increase of 10,002 businesses in the last financial year, a lift of 2.2%. This was the result of 76,414 businesses starting and 66,412 closing.
Those numbers appear disturbingly high, but are in fact quite normal. Over the last three years, post Covid, construction start-ups have averaged 75,300 annually and closures averaged 66,100.
Construction increased substantially in the financial year just ended, making three straight years of strong growth following the Coalition slump. See chart below.
Total construction in Australia. Source: Australian Bureau of Statistics.
Businesses report record profits
The current profit reporting season is confirming that conditions now enable well-managed businesses to thrive.
Qantas reported a net profit to $1.61 billion in the last financial year, up 28% on what was a healthy return last year. Retailer Coles posted a net profit of $1.08 billion, a rise of 2.4%. Wesfarmers Limited reported $2.93 billion in net profit for the year, up 14.4%. Harvey Norman generated a record $518 million profit, up 47% on the year before.
Tabcorp posted a net profit of $36.6 million, in a strong turnaround from its $1.36 billion loss last year. Net profit of Austin Engineering (no relation, unfortunately) jumped 70% to $40.4 million.
Many other corporations have posted record profits.
Newsrooms starting to catch up
Murdoch’s tabloid the Herald Sun ran a story last week titled ‘Australian household spending tipped to rise on rate and tax cuts’ which was promoted online as ‘Major sign Aussies starting to spend again'.
It reported that, ‘Data released by the Australian Bureau of Statistics shows household spending was up just 0.4 per cent in the March quarter’ and says this is ‘a major sign the worst of the cost-of-living crisis might be over’.
But here’s the thing. The ABS quarterly national accounts data used in that analysis was released on 4th June. So this is not exactly fresh news. The four previous quarterly reports, issued in March, June, September and December 2024 also showed increasing household spending which all confirmed, as IA reported first back in June 2024 and later in October 2024, that the cost of living crisis actually ended in late 2023.
The Herald Sun should have reported this in early 2024 as it unfolded. It didn’t, of course, because all mainstream newsrooms chose to spruik the false narrative of a cost of living crisis through the 2025 election campaign.
Fortunately, this did not succeed.
Now let’s see how long it will take the other loser newsrooms to catch up with reality and report the truth.
*
This is an edited version of an article published today in Independent Australia. The original article is available here in full for free:
https://independentaustralia.net/politics/politics-display/doomsayers-proved-wrong-again-as-businesses-expand-and-prosper,20107
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