Coalition MP Jason Falinski, who chairs the parliamentary inquiry into Housing Affordability and Supply, was interviewed by the ABC where he blamed the destruction of housing affordability across Australia on a lack of supply:
“What people who make the demand-side arguments are basically saying is that there are a group of Australians who should not be allowed to own their own home,” he said.
“How they’re going to do that is by reducing tax incentives, by reducing government programs that help first-time buyers get into the market, by increasing taxes, by increasing interest rates – that’s certainly one answer.
“There is another answer — how about we just provide enough houses so that all the people who want to live in a house have somewhere to live?”…
“Lack of supply, it’s simple,” he said…
“It’s not that we don’t have enough land in Australia,” he said.
“It is because poor regulations have ensured that people are not allowed to build the homes that they want to live in, where they want to live in them”.
The planning regulations Mr Falinski is referring to are almost entirely handled by state and local governments.
Outside of work facilitating supply, like running the National Housing Finance and Investment Corporation, the federal government has little role to play.
Let’s cut the crap. The federal government is only focusing on housing supply because it is an area of state responsibility. It is another attempt by the federal government to pass the buck to the states while assisting its mates in the property development industry.
Besides, any supply shortfall was caused by the federal government’s massive increase in immigration after 2005:
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Australia’s net overseas migration (NOM) jumped from an average of 90,500 between 1991 and 2004 to an average of 219,000 between 2005 and 2019 – representing an annual average increase in immigration of 140%.
The latest Intergenerational Report (IGR) explicitly notes the impact of federal government immigration policy changes in driving up Australia’s population:
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Policy changes to the Migration Program over the past 2 decades have led to higher migration levels and faster population growth. Australia’s population has grown significantly faster than was projected in 2002. The Australian population reached 25.7 million at the end of 2019-20, 20 years earlier than projected in the 2002 Intergenerational Report.
Australia’s population growth has been driven by net overseas migration, which accounted for around 60 per cent of growth in the last decade. This is expected to increase to around 74 per cent by 2060-61…
The level of net overseas migration in Australia has risen with the planning levels of the Government’s permanent Migration Program, in addition to an increase in temporary migration over the last decade. These planning levels increased from 80,800 places in 1995-96 to 190,000 places in 2012-13, before decreasing to 160,000 in 2019-20.
After 4 years at 160,000, the permanent planning level then returns to 190,000 in 2023-24…
The long-run assumption of 235,000 people per year is based on current Government policy, with annual planning levels of the permanent Program assumed to continue at the 2023-24 level of 190,000 people, the Humanitarian Program assumed to continue at 13,750 people, and flows of temporary migrants, Australian citizens and departing permanent residents assumed to continue in line with historical averages…
This extreme immigration is projected in the IGR to increase Australia’s population by 13.1 million people (~50%) over the next 40 years to 38.8 million people – equivalent to adding another Sydney, Melbourne and Brisbane to Australia’s existing population.
Such a population deluge will guarantee that housing demand swamps housing supply, resulting in worse affordability.
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Australia’s ‘housing supply’ problems could be permanently solved with the stroke of a pen by the federal government. All it needs to do is reduce immigration back to historical pre-2005 levels. This would also negate the need to bulldoze our suburbs into high density:
Forcing Aussies to live in apartments.
As I illustrated in my submission this inquiry, “any housing supply problem is first and foremost an excessive immigration problem”.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
