There is something painfully symbolic about the collapse of David Jones happening on the very same day that Australian technology success story Canva announced plans to cut 22 per cent of its workforce.
One represents Australia’s old aspirations. The other represents its new ones.
And both are telling us something deeply uncomfortable about the state of the Australian economy.
David Jones has spent 188 years selling Australians the idea of a better life. Beautiful clothes, luxury brands, elegant stores and the promise that if you worked hard enough, you might one day afford the things in its windows.
Canva represented something entirely different, but equally aspirational. An Australian technology company that conquered the world, created thousands of jobs and proved we could build something extraordinary without moving to Silicon Valley.
Now David Jones is heading towards administration, while Canva is restructuring 1,271 positions.
Two very different businesses with one very troubling message. Australia is running out of reasons to feel optimistic.
An economy running on exhaustion
Speak to almost anyone running a small or medium-sized business in Australia and you will hear a familiar story.
Costs keep rising while customers are spending less. They are facing rising power, water, rent and insurance prices. And workplaces that just don’t feel as fun anymore.
Somehow, business owners are expected to keep calm and carry on. Never complain, never explain. Just keep paying the bills and the payday super and the BAS and the tax (on their credit cards for a little longer).
Australians are exhausted.
They are exhausted by the cost of living. Exhausted by the endless political announcements promising relief. Exhausted by election night victory speeches about governing for all Australians. Exhausted by being told the economy is resilient when their own bank accounts tell a very different story.
They are clinging to the hope that next month, next quarter or next year might finally be better. But they’ve been doing that since March 2020. And still that day never seems to arrive.
The latest figures from the Australian Securities and Investments Commission should be required reading for every politician in Canberra.
More than 14,000 companies entered external administration during the 2024–25 financial year, a record annual figure.
They represent businesses built over decades, families who took risks, employees who depended on those wages and entrepreneurs who believed Australia was the lucky country.
Not every insolvency represents a failed business, and not every closure is caused by government policy.
But the broader warning is getting louder. So loud it’s impossible for governments to ignore.
Something is going badly wrong with the conditions in which Australians are expected to build, invest and employ.
The government is doing just fine
Of course, there is one part of the Australian economy that never seems to suffer the same crisis of confidence – Government.
If you work in a department responsible for regulation, compliance or administering another layer of obligations on business, these must feel like the gold rush.
There is always another framework to introduce, another reporting requirement to enforce and another policy announcement to celebrate.
The machinery of government continues to expand while the businesses expected to fund the economy are being told to become more productive with less.
The contrast is extraordinary.
Private businesses are cutting jobs, closing stores, renegotiating leases and searching desperately for efficiencies.
Meanwhile, Canberra continues to behave as though the answer to almost every economic or social problem is another government intervention.
There is a place for regulation. Workers deserve protection. Businesses should meet their obligations. But what if those obligations become impossible for most businesses to meet? And what if governments keep adding more obligations?
Who is standing up for the employer staring at another payroll bill after another month of disappointing sales?
Who in government is genuinely focused on making Australia a better place to do business?
We’ve seen this political story before
There is something depressingly familiar about the political cycle Australia finds itself in.
A Labor government arrives with enormous goodwill.
A likeable leader promises fairness, stability and a better future for all.
Voters embrace the message, and an emphatic second election victory is interpreted as a sweeping endorsement of the government’s direction.
Then comes the dangerous part.
Electoral success begins to look like an unlimited mandate.
Instead of asking what the economy needs to grow, governments become increasingly focused on satisfying the constituencies and political interests that helped deliver victory.
Industrial relations becomes a contest between employers and employees and next thing you know, workplaces become war zones, where HR is weaponised and bosses know they will always lose.
Regulation becomes a demonstration of political virtue rather than a carefully measured economic intervention.
And economic ambition slowly gives way to the politics of redistribution, protection and control.
The Albanese government did not create every problem facing Australia.
Inflation, global economic uncertainty, the pandemic’s aftermath and the technological disruption caused by artificial intelligence are all significant forces.
But governments are elected to respond to the circumstances placed upon them, and lead the population through the mist.
But it’s as if the government is completely ignoring the AI revolution knocking at the door. It may fight to protect workers today, but what the plan for tomorrow when businesses require fewer workers?
Ask the 1200 Canva workers what they’re planning to do tomorrow.
Even the success stories are cutting jobs
Canva’s announcement should particularly concern Australians.
This is not a struggling retailer operating an outdated business model.
This is one of the country’s most celebrated technology companies, with hundreds of millions of users worldwide.
Yet even Canva is being forced to reconsider how it operates, reducing management layers, consolidating teams and confronting a new economic reality.
It follows major job reductions announced this year by Atlassian and WiseTech Global.
Artificial intelligence is fundamentally changing the economics of technology companies.
Tasks that once required entire teams can increasingly be completed by smaller groups using sophisticated software.
This is not simply an Australian problem, nor can Canberra be blamed for every technology redundancy. But I do wonder whether they’re prepared to deal with the employment crisis around the corner.
If Australia’s most successful technology businesses are reducing their workforces, where will the next generation of high-paying jobs come from?
What industries are we building? What incentives are we creating for entrepreneurs?
The mining boom of the late 90s was great until the mines were built and the robots moved in. Now the same is happening to the tech sector.
It seems easier to divide existing wealth rather than create more of it.
David Jones is more than a department store
David Jones has its own problems.
Changing consumer habits, online competition, expensive leases and years of strategic difficulties have all contributed to its predicament.
It would be simplistic to blame its collapse entirely on one factor.
But there is a sad irony in Australia’s oldest, most aspirational department store being tipped into administration.
Department stores depend on discretionary spending and interest rates are now at an 18 year high.
For DJs to survive the administration process, it requires consumers to feel sufficiently confident about their future to buy something they do not strictly need. That’s a hard sell at the moment.
And aspiration is central to that equation.
What happens when middle-income families are spending so much on housing, groceries and essential bills that a department store purchase feels irresponsible?
What happens when the national mood shifts from ambition to exhaustion and survival?
The demise of David Jones may be about leases and lenders on paper.
But it is also a powerful symbol of a country where the traditional rewards of economic progress feel increasingly distant.
Australia needs ambition
Australians do not need another government press conference telling them how much support is being delivered.
They need an economy that gives them the confidence to stand on their own feet.
That starting a business is worth the risk.
That employing someone is an opportunity rather than an ever-growing financial liability.
That innovation will be rewarded and government will help them grow, rather than hinder them.
This does not require abandoning workers’ rights or dismantling sensible regulation. But it does require us to ask whether the current rules are consistent with the times we are in, and the goals we are hoping to achieve.
The government cannot regulate its way to prosperity. And it cannot employ its way out of higher unemployment.
It cannot redistribute wealth that has not been created.
And it cannot keep promising a brighter future while ignoring the growing number of Australians who have stopped believing one is coming.
David Jones once sold the dream of a better life.
Canva helped build the dream of a more innovative Australia.
On the same day, both have delivered a warning.
Australia doesn’t just have a cost-of-living problem. It has a crisis of confidence in the future.
