A sales rep from Toowoomba is 42, has $80,000 saved, and is trying to work out what to do with it. Her superannuation is managed by an institution she has never met. She has heard that she should diversify — buy shares, invest in the economy, build something other than equity in a house. Last year the Prime Minister committed $22.7 billion to build “a stronger, more diversified and more resilient economy.” She is waiting for it to show up on the ASX.
The Australian equity market lists under 1,900 companies. The United States lists around 4,000. By market capitalisation, the ASX 200 is an undiversified housing credit system attached to a mining cycle. The Commonwealth Bank alone accounts for over eleven percent of the entire index — every dollar in a broad Australian index fund carries eleven cents of exposure to a single retail bank. BHP and CBA together outweigh every technology, healthcare, and consumer company on the exchange combined.
The $22.7 billion Future Made in Australia program responds to this by funding renewable hydrogen, green metals, and low-carbon fuels. The software companies are not in the program. The pharmaceutical manufacturers are not in the program. The advanced industrial base that would give our sales rep something worth buying on the ASX is not in the program.
Chris Bowen, the Minister for Climate Change and Energy, has described the energy transition underpinning the government’s agenda as “the biggest economic opportunity in our history.” The outcomes are available for inspection. Oceania Glass — Australia’s only architectural glass manufacturer, operating for 169 years — closed in February 2025, citing energy costs. Qenos, the country’s last major plastics producer, closed in 2024 for the same reason. Australia now imports all of its glass and plastics from China. The government’s answer to the industrial decline its own energy policy produced is the selective bailout — $2.4 billion to Whyalla steel the most recent prescription. Other patients didn’t even get a morphine shot.
Households fared no better. Bowen promised in 2022 that power bills would fall by $275 a year by 2025. They are $466 higher. In NSW and Queensland, $1,200 higher. A nation that cannot keep its own lights on is not obviously positioned to manufacture solar panels.
For the bottom 60 percent of Australian households by wealth, directly held shares and bonds account for roughly one percent of assets. This is often described as financial illiteracy. It is more plausibly a rational response to a market offering concentrated exposure to two sectors with returns that have lagged global equities for more than a decade.
Between 55 and 70 percent of Australian household wealth sits in residential property. The American share is around 28 percent. The housing debate treats this as a tax problem. It is a sophistication problem. Capital does not flow toward complexity that doesn’t exist. It flows toward the best available option, and in Australia that option has been, for decades, a house.
The sales rep from Toowoomba has done the arithmetic. The ASX offers her CBA at eleven percent of everything, a mining sector tied to steel demand in the country that now represents the greatest strategic threat Australia has faced since the Second World War, and the promise of green hydrogen sometime after 2030. The decision is easy — the mortgage broker gets an email.