..AI is indeed a big worry, worker displacement especially in white collar jobs is happening and fast.
..and when robotics and autonomous vehicles become mainstream, blue collar jobs would be imperiled as well.
..then what? Humans live on UBI (universal basic income) and watch Netflix all day?
..Taxation base gets upended when individual taxes drop and taxes on the wealthy would take more prominence over time.
..there's so much tax planning in Australia that a high-income individual could end up paying less tax than an average taxpayer circa $90-100k pays without any tax arrangements. If all those tax concessions, structures, loopholes and vehicles are adequately removed, we could easily flatten the individual tax rates, fairness for all and reduce marginal tax rates across the board.
..and Australia needs to get into the AI industry in one form or another, especially in integration with the life sciences areas where we have an advantage.
Beware the great white-collar squeezeOn the one side, Amazon is warning artificial intelligence is coming for white-collar jobs. On the other, tax reform will aim at the wealthiest Australians. This will get uncomfortable.
AFR Chaticleer
Jun 20, 2025 – 10.06am
With the eyes of the world rightly trained on Iran, Amazon chief executive Andy Jassy’s warning to his employees about artificial intelligence’s threat to their jobs feels like a bit of a sideshow. But in the long run, Jassy’s gloomy prediction may turn out to be a deeply consequential moment for many Australians.
Jassy’s warning that
Amazon will end up with a smaller workforce because of AI isn’t necessarily new. The potential threat posed to white-collar jobs from the technology has been recognised by several Australian chief executives, including Telstra boss Vicki Brady and Commonwealth Bank’s Matt Comyn. But there’s a bigger shift already under way in the labour market that could compound the impact of AI.
Numbers from US employment data firm Live Data Technologies shows white-collar staff numbers across US public companies have fallen 3.5 per cent in the past three years. But more recently, what could be written off as a gentle belt tightening has turned into something else.
The Wall Street Journal this week tallied up the most recent cuts. Procter & Gamble has slashed 7000 jobs, or 15 per cent of its non-manufacturing workforce. Estée Lauder and dating-app operator Match Group have each chopped 20 per cent of their managers. Microsoft is reportedly planning to cut thousands more roles, after a big round of job cuts this year. The tech sector has been particularly enthusiastic in the way it has cut staff in the past two years.
But again, it’s not just the numbers. The post-pandemic hiring binge in which wages jumped and employees held the whip hand (remember the “great resignation”?) is over and there’s a new rhetoric dominating corporate America. Jassy told his staff to learn how to operate in “scrappier” teams. Proctor & Gamble said it wanted to create “broader roles and smaller teams”. Hewlett Packard Enterprise’s chief financial officer, Marie Myers, recently told investors that “flatter is faster”.
Are these trends being replicated in Australia? The “smaller is better” rhetoric isn’t evident. But there are few public companies that don’t have some form of efficiency program running, and we have seen cracks in white-collar employment this year. Westpac confirmed 1500 job cuts last month. ASX Limited is shedding about 10 per cent of its workforce. Transurban is slashing 300 jobs, or 7 per cent of its workforce. Aurizon has cut 200 jobs. Consulting firm EY cut about 100 jobs. Zoom out, and the numbers get even bigger: the finance sector lost about 30,000 jobs last year, and Telstra cut 2800 jobs last May.
Private sector job growth is weakAgain, none of this was evident in this week’s employment data, which showed the jobless rate remained steady at 4.1 per cent. But private sector job growth is weak, and it’s the government sector that accounts for 53 per cent of the jobs created since 2019.
It’s important to remember that backdrop to the job cuts we are seeing on both sides of the Pacific. The US and Australian economies have slowed, but they are not even close to recession. Corporate profits and margins in the US are near record levels. Australia is in the midst of a three-year profit drought, but its corporate balance sheets are as strong as they’ve been in years.
However, most notably, these cuts have occurred well before the deployment of AI gathers any real momentum The billions of AI agents Jassy expects “across every company and in every imaginable field” are still some years away from becoming active. Yet already, white-collar employment is under threat, and unemployment among new US college graduates is running at 6.6 per cent, the highest level in a decade.
Last month, the chief executive of AI developer Anthropic, Dario Amodei,
predicted AI could wipe out half of all entry-level white-collar jobs and send the unemployment rate to between 10 per cent and 20 per cent in the next one to five years. It suddenly doesn’t sound so far-fetched.
If Jassy is right, and AI particularly ratchets up the pressure on white-collar households, any pain will be magnified by the fact this part of Australian society has enjoyed decades of strong growth.
The combination of low interest rates, surging house prices and mushrooming super balances has driven Australian household wealth to record levels. It has made Australia one of the richest countries in the world. The data from the big banks that shows the bulk of home loans are being sold to
households with over $250,000 in income isn’t just about changes in bank lending practices, but also shows the gaps that have opened up between haves and have-nots.
Of course, these white-collar households are also carrying large amounts of debt, mainly via mortgages. If they really do face the biggest hit from AI-driven unemployment, then the economic fallout won’t be pretty.
Chalmers mentioned AI only onceThe day after Jassy’s warning, Treasurer Jim Chalmers
delivered his big set-piece speech on the new Labor government’s economic agenda. Productivity was mentioned 28 times, but AI got only one mention, and then in only a vague promise that Labor will seek to “capitalise on the huge gains on offer, not just set guardrails”.
The speech was notable, of course, for Chalmers’ commitment to explore serious tax reform. So serious is Chalmers about this task that he urged the media not to play the game of trying to force Labor to rule any idea in or out – only for Chalmers himself to immediately rule out increasing the GST.
That would seem to hamstring the forthcoming debate somewhat. Particularly so, given Chalmers wants to reduce the tax burden on individuals, and increasing company taxes would be difficult given the business community already sees the corporate tax rate as internationally uncompetitive.
It’s obviously very early days, but the ideas pitched so far,
such as lifting taxes on family trusts and increasing taxes on electric vehicles to try to offset the decline in fuel excise, seem unlikely to meet the three main pressures on the budget. Those are higher health and aged care costs, higher costs from the National Disability Insurance Scheme, and higher defence spending.
If Chalmers really is serious about shoring up the budget through tax reform, it’s inevitable that he’ll have to examine further taxes on wealth. Those could include more changes to tax breaks in superannuation or politically poisonous inheritance taxes.
Time will tell where Chalmers’ process goes, and how much political capital he’s really prepared to spend in the name of budget repair. For now at least, it’s good to see the conversation happening.
White-collar households will be hit either wayBut it’s not a process that is likely to be welcomed by white-collar households. All of the ideas mentioned above – wealth taxes, changes to family trust taxation, even higher taxes on EVs – will be aimed squarely at them.
You can understand the logic: four decades of globalisation, low interest rates and fiscal stimulus have been very good for white-collar households, and much tougher for lower-skilled workers.
But this week’s comments from Jassy and Chalmers address the real potential for a white-collar squeeze to emerge in the coming years. That could happen as AI starts to hit employment – gradually at first, and then in a much more meaningful way – and the government looks for new sources of revenue.
Labor seems to be pinning its hopes on muddling through this tension in a way that protects jobs and conditions and allows it to meet its big spending commitments. But that will be a very difficult balance to pull off in the face of what Jassy calls a once-in-a-lifetime period of technology change.
Life may be about to become more uncomfortable for white-collar households than it’s been for generations.
