Matt Barrie tech CEO reveals why he believes Australia is on path for imminent economic collapse
A leading entrepreneur has warned that Australia is on the brink of financial collapse due to a housing bubble similar to that which crippled the US economy in 2008, and reliance upon burgeoning immigration to prevent it bursting. Matt Barrie, founder and CEO of labour hire company Freelancer.com, outlined a terrifying list of factors which he claimed would soon tip Australia into an economic meltdown. He said rising , consequent interest rate hikes and surging mortgage repayments were among the troubling signs of a looming financial disaster. Mr Barrie compared the current economic climate in Australia to the Global Financial Crisis that was caused by the collapse of the housing market in America in 2008, when reckless lending and risk-taking by banks saw home prices surge and then inevitably crash. 'It's exactly the global financial crisis which we saw in America, happening here in Australia today,' he told Australian online broadcaster . Mr Barrie, who rose to national fame for opposing the Sydney lock-out laws in 2016, said every Australian realises 'something is terribly wrong in this country' as mortgages, bills and the cost of living skyrocket. He said Australian workers are forced to take on massive mortgages due to extraordinary housing prices, which are being pushed ever higher by importing more and more people to sustain rising demand. 'The only reason why house prices are going up is because we're bringing more people into the country,' he added. 'We have 620,000 students brought into this country, and everybody knows they're not students but a low-cost workforce that's been brought in to prop up GDP and work in 7-11 or drive an Uber. 'Really it's late-stage desperation in a Ponzi scheme. The housing market going up for 60 years relentlessly has led to a Ponzi out of all proportions - its the housing bubble of all bubbles.' Almost half a million more immigrants are expected to come to Australia this year as overseas students, temporary visa holders and working holidaymakers return. '(Prime Minister Anthony) Albanese has gone full berko on immigration. He's turning every single tap he can on in a desperate attempt to prop everything up,' Mr Barrie said. 'He's desperately attempting to keep the housing market - and therefore the banks - solvent because we're going to head into a GFC (global financial crisis) event.' The mean house price in Australia has risen by a whopping $8,500 to $896,000 in the March quarter. The mean price of property in NSW is $1,150,400, which remains the highest in the country, followed by the ACT ($951,800) and Victoria ($898,300), according to the Australian Bureau of Statistics (ABS). As a result, young people coming into the housing market are having to take extraordinary levels of debt to buy their first home, making them very vulnerable to rising interest rates. Mr Barrie said Australian household debts are now double the US, 'a country that you'd normally associate with credit cards and debt'. 'Households are basically at breaking point and mortgages are skyrocketing,' he said. As rates rise, discretionary spending falls as intended as the Reserve Bank tries to get inflation under control, but some analysts fear it could go too far and tip the country into recession as spending dries up and businesses fail. The outspoken tech CEO warned that Australia would experience a 'complete replay of the movie The Big Short'. The Big Short documents some of the events leading up to the 2008 global financial crisis where a select group of investors predicted that the US housing market, which was based on extremely high-risk mortgages, would eventually crumble under the weight of rising interest rates. The eventual collapse of the US subprime mortgage market eventually led to a global recession - the deepest since the Great Depression in 1929. Many Western governments, including the UK and the US, bailed out banks that made the speculative loans rather than let them fail, and that only encouraged them to quickly return to such risky lending. The shockwaves of the crisis hit Australia's shores, bringing a period of slow economic growth, higher unemployment and increased uncertainty. However, on the whole, Australia fared comparatively well as the country's banks were not as exposed to the US housing market and the economy was boosted by large exports of coal to China. However Mr Barrie said our reliance on primary exports and collapse of local manufacturing, means the Australian economy is dangerously narrow and barely altered since the 19th century. 'We are a very primitive country in terms of what we export,' Mr Barrie said. 'We dig out of the ground dirt, which is iron ore, and ship it to China, and we dig up dead trees, which is coal, and ship it to Japan and China. 'Australia has manufacturing as a percentage of GDP on par with a financial haven like Luxembourg.' Last week, the Reserve Bank increased the cash rate for the twelfth time in almost as many months bringing more mortgage misery for families across Australia. The RBA cash rate is now at an 11-year high of 4.1 per cent, with monthly variable mortgage repayments already 58 per cent higher than they were little more than a year ago. National Australia Bank has updated its predictions to have the Reserve Bank hiking rates in July and August, taking the cash rate to 4.6 per cent and adding $295 to monthly mortgage repayments on an average loan. This would be the highest level since November 2011 and would mark the 14th increase since May 2022, with rates already soaring at the fastest pace in 34 years. The Australian economy only grew by a paltry 0.2 per cent in the first three months of the year, according to the ABS. It comes as inflation has risen to just under seven per cent, forcing families to trim their already-stretched budgets. Almost half of Australians claim they cannot afford to fill their trolleys under current grocery prices, while four in five are actively working to reduce their food costs, according to recent Suncorp research. Consumers are also buying significantly fewer goods at shops and department stores. Retail sales volumes fell 0.6 per cent in the March quarter of 2023, according to the ABS. The fall in the March quarter followed a 0.3 per cent fall in the December quarter of 2022. 'Outside of the COVID-19 pandemic period, this is the largest fall in retail sales volumes since the September quarter 2009,' said ABS head of retail statistics Ben Dorber. Earlier this year, Deloitte Access Economics warned of an imminent 'consumer recession' as mortgage repayments rose, rental prices increased and other costs of living continued to soar. But last month, the chief economist for the National Australia Bank warned it had already arrived.