What the indexes actually show
The ABS Selected Living Cost Indexes, which measure cost changes for specific household types and include mortgage interest charges that the standard CPI excludes, show the following changes from the first quarter of 2012 to the second quarter of 2026: other government transfer recipient households up 51.7 per cent, pensioner and beneficiary households up 50.0 per cent, age pensioner households up 48.5 per cent.
One caveat that must travel with those numbers: they are index changes for a household type, not what any individual household experienced, and because they include mortgage interest charges they move differently from the CPI. They are not interchangeable with it. What they measure, carefully, is a real and sustained compression of purchasing power across the households least able to absorb it.
Those are not the households that benefited from the growth model that produced the compression. They are the ones who paid for it.
The mechanism nobody is pricing in
Here is the part of this story that makes it an AI story rather than a conventional cost-of-living column.
Australia is in the early stages of a data centre build-out that will make AI data centres the fastest-growing new electricity load in the country. Large language model inference, the process by which an AI system answers a query, runs continuously and at scale. A single large facility draws hundreds of megawatts around the clock. The International Energy Agency projects that global data centre electricity consumption will roughly double by 2026 compared to 2022, driven almost entirely by AI workloads. Australia is not exempt from that trajectory. It is, if anything, positioned to attract a disproportionate share of it given its political stability, its fibre connectivity to Asia-Pacific markets, and its land availability.
The electricity price consequence is not speculative. It is the standard economics of a large new inelastic load entering a grid. More demand, same supply, higher wholesale price, passed through to households and small businesses on variable tariffs. The households already carrying a 50 per cent living cost increase since 2012 are the ones who cannot hedge that exposure.
The irony is that Australia exports the energy that powers this build-out. The country that ships liquefied natural gas to run data centres in Singapore and Japan is now importing the electricity price consequences of running equivalent facilities here, without having captured the sovereign wealth that would make the trade worthwhile. Norway turned its resource base into roughly US$1.8 trillion for 5.5 million people. Australia exports more resource value and has no equivalent fund. That is not a grievance. It is a design choice, and it is a choice that can be made differently.
Cheap domestic energy is what makes Australian-owned compute viable. It is what lowers industrial input costs. It is what raises real wages in the occupations that cannot be offshored. The Nationals understand this from the farming and resources side. The Liberals understand the fiscal mechanics. One Nation has made energy sovereignty a standing position. The argument for a coalition with One Nation leading is partly that this is the one combination that could actually deliver it, because it is the one combination where the party most committed to the outcome holds the relevant portfolio rather than deferring to it.
The migration connection
Net overseas migration peaked at 530,700 in 2023 and has since fallen: 330,500 in 2024, 300,800 in 2025. Anyone writing that the intake is still climbing is wrong. The composition argument does not require a rising total, and it is the composition argument that matters here.
Of the 2023 intake, 52 per cent arrived on student-related visas: higher education at 33.9 per cent, other student at 11.6 per cent, VET at 6.2 per cent. The skilled migration categories that address a genuine and lasting labour shortage accounted for 14.1 per cent combined, with permanent Skill alone at 5.8 per cent. The Home Affairs migration program planning levels show the Family stream running alongside the Skill stream as a separate and substantial pathway.
A permanent residency grant is not a one-off. It creates a future entitlement to sponsor family members, and the Family stream in the migration program runs its own planning level. The standing population effect of a year's intake is higher than the headline net migration figure, and a government planning only to the headline is planning to the wrong figure. How much higher is a function of take-up rates the register does not currently hold, so the argument stops there: the real number is higher, and the mechanism is documented, but no specific multiplier is claimed here.
The occupational exposure is where the AI mechanism bites. The student intake is concentrated in business, accounting, IT administration and related fields. Those are the exact categories that large-language-model deployment absorbs first: document processing, data entry, routine correspondence, scheduling, basic financial analysis. The entry-level rung in those occupations is being automated. Graduates, domestic and international, are entering a market where the first job has been removed.
The Productivity Commission's inquiry into migrant intake found that migration "does not offer a long-term panacea" for demographic pressure because "immigrants age too." That finding was about the dependency ratio argument. It applies with equal force to the labour shortage argument: a shortage that is temporary because automation is absorbing the roles does not justify a permanent pathway. Importing workers for jobs that will not exist in ten years is a structural cost, not a solution to a shortage.
Why One Nation, and why leading
Labor set the settings that produced the 530,700 figure. That is a record, not an opinion. The planning levels, the visa categories, the onshore switching rules that the Nixon Review documented as a pathway from study to work rather than study to study: all of that was administered by the government in office. Criticising it is not a claim about anyone's character. It is reading the published figures.
The Coalition's current position is a change of mind. That is worth something. Angus Taylor's stated commitment to lowering the intake is a genuine shift from the settings the Coalition ran in its own time in government, when net migration also ran high. A change of mind is not the same as a demonstrated conviction, and the difference matters when the business lobby that will push back against any real reduction has access to both major parties.
One Nation's proposition is not a trim at the margin. It is taking the intake down hard and continuing to take it down. The commitment is a year-on-year reduction in net overseas migration, continuing into negative net territory, paced against measured automation displacement, and held there rather than reversed the moment a quarterly GDP print looks soft. That is a schedule, not a slogan. A schedule can be modelled, costed and defended on air. "We would reduce it" cannot.
The case for One Nation leading rather than supporting is precisely this: the Liberals and Nationals bring the numbers in parliament and the ministerial experience to run departments. One Nation brings the one thing neither has demonstrated in government, which is the willingness to actually cut the figure and hold it there against the lobbying that will follow. A coalition where the party most committed to the reduction holds the relevant portfolio is a structurally different proposition from one where it is a minor partner asking politely.
Pauline Hanson and Barnaby Joyce as the leadership proposition is not a conventional arrangement. It is the arrangement that matches the scale of the problem.
What the reduction buys
State the benefit case plainly, because a vision converts where a warning only alarms.
A year-on-year reduction in net overseas migration, held to a schedule, produces measurable changes in the figures that have been moving the wrong way. Housing completions, which have been running below household formation for most of the past decade, begin to catch up when household formation slows. Infrastructure spend per head rises when the denominator stops growing faster than the numerator. Wage growth in the occupations most exposed to competition from the intake, the ones that are also most exposed to automation, has more room to move when the supply side of the labour market tightens.
None of those outcomes are instant. A schedule that is honest about the timeline is more credible than one that promises relief by the next election. The argument is that the direction is right and the commitment is binding, not that the problem resolves in a term.
The energy and resources piece is the largest prize and the least written about. Australia's resource base, used domestically rather than exported raw, delivers the cheapest industrial power in the developed world. That is what makes Australian-owned compute viable as the data centre build-out accelerates. It is what makes the living cost trajectory reversible rather than structural. It is the difference between a country that captures the value of the AI transition and one that hosts the infrastructure for someone else's benefit while its households pay the electricity bill.
The policy gap that will need filling
One Nation's published policy index covers 29 areas. None of them address AI, automation, data infrastructure or telecommunications. That is not a gotcha. It is a structural observation about a party that is about to become a governing force in an economy being reshaped by exactly those forces.
The data centre build-out will require decisions about foreign ownership of compute infrastructure, about domestic energy allocation, about Commonwealth AI procurement and the offshore share of it. Those decisions will land on the desk of whoever holds the relevant portfolios. One Nation's existing positions on foreign ownership, energy sovereignty and domestic industry give a clear direction of travel. The technology policy that fills the gap should be built from those positions, not imported from the consensus that produced the current settings.
This section will argue what that policy should look like as the build-out accelerates. The starting point is the one that One Nation's existing platform already implies: Australian-owned energy powering Australian-owned compute, capturing the value of the transition for the people already here rather than for offshore principals. That is a technology policy. It just needs to be written down.