Is Australia's economy stuck on a treadmill, relentlessly chasing its tail while prices keep climbing? One prominent tech leader thinks so, and his explanation is surprisingly straightforward: we're printing too much money.
According to Matt Barrie, CEO of Freelancer, the rapid increase in Australia's money supply is the key driver behind recent inflation. In a recent post on X (formerly Twitter), Barrie pointed out that the supply of Aussie dollars has risen by a staggering 11% per year. He shared a chart showing Australia’s M3 money supply reached a record $3.3 trillion in September. M3 is a broad measure that includes all physical currency in circulation, plus deposits in banks and other easily accessible, or 'liquid' assets.
"Wonder why prices are up 11%/year?" Barrie quipped, implying a direct link between the two. But here's where it gets controversial...
While Australia's official annual inflation rate, as measured by the Consumer Price Index (CPI), stood at 3.2% in the September quarter – a noticeable jump from 2.1% in the previous quarter, largely due to rising energy costs – many argue that the CPI doesn't paint the whole picture. Critics contend that the CPI fails to accurately reflect "true" inflation because it excludes crucial assets like housing. This is a significant point, as housing costs represent a substantial portion of household expenses for many Australians. Think about it: if your rent or mortgage payments are skyrocketing, does a 3.2% inflation rate really capture your financial reality?
Advocates of alternative assets like gold and Bitcoin often use the price of gold as a gauge for “real” inflation. And this is the part most people miss... Barrie's post highlighted that the growth in money supply appears to be mirroring the average rise in the price of gold, which has increased by 11.8% in Australian dollar terms since 2010. This correlation raises questions about whether traditional inflation metrics are adequately capturing the impact of monetary policy on asset values.
But what's fueling this increase in the money supply? Barrie points to two main culprits: migration-fueled home loan issuance and government spending. "Primary driver now is new home loan issuance due to migration, 2nd is govt p**sing money away on NDIS & paying salaries for new migrants as 8 in 10 new jobs are taxpayer funded: non migrant job growth is ~0," he wrote.
He argues that the government's spending on programs like the National Disability Insurance Scheme (NDIS) and the creation of taxpayer-funded jobs are exacerbating the problem. In essence, he believes that the government is injecting too much money into the economy without a corresponding increase in productivity or economic output.
It's no secret that Australia has been experiencing record-breaking levels of immigration. Data from the Institute of Public Affairs (IPA), based on Australian Bureau of Statistics (ABS) figures, shows that net permanent and long-term arrivals reached 415,760 between January 1 and September 30, 2025 – a 6% increase over the previous record set in 2024. The IPA's Deputy Executive Director, Daniel Wild, stated, "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 has also voiced concerns about the absorption of immigrants into taxpayer-funded sectors like the NDIS, calling it an "artificial" situation that masks underlying weaknesses in the private sector job market. In fact, last year, a staggering 80% of all new jobs created were in the public service or taxpayer-funded “non-market” sectors.
Adding fuel to the fire, analysis by the Australian Industry Group (AI Group) revealed that the private market sector accounted for a mere 99,000 new jobs in 2024. AI Group chief executive Innes Willox commented on the recent inflation numbers, stating, "The re-emergence of inflation is entirely unsurprising given our poor productivity... It is simply unsustainable to rely on government for the majority of job creation in Australia."
National accounts data further underscores the government's growing dominance in the Australian economy, with government spending accounting for 27.9% in the June quarter. This is a significant increase compared to the pre-pandemic average of 21% to 24%.
The government has attempted to address some of these concerns, announcing reforms to the NDIS aimed at curbing its rapid growth. However, the scheme's total wage bill for public sector jobs reached a staggering $250 billion in the year to June, after a spending increase of 7.6%. The federal government saw the sharpest increase, with a 9.5% rise in wages and salaries, surpassing $40 billion for the first time.
Prime Minister Anthony Albanese defended the increase, emphasizing the important role played by public servants. But does this justification hold water in the face of rising inflation and concerns about government overspending?
So, is Australia really on a hamster wheel, endlessly printing money to fuel unsustainable growth? Is the government's spending exacerbating inflation and masking weaknesses in the private sector? And are current inflation metrics accurately reflecting the true cost of living for Australians? These are complex questions with no easy answers. What do you think? Share your thoughts and join the discussion in the comments below!
