After telling us for the past year that Sydney’s and Melbourne’s housing woes have been caused by a ‘lack of supply’, immigration minister Peter Dutton has finally acknowledged that Australia’s mass immigration settings are causing major indigestion, and has called for immigrants to be diverted to the regions. From The SMH:
The Turnbull government is considering new measures to encourage more migrants to settle in regional or remote areas to relieve pressure on house prices and infrastructure in Sydney and Melbourne.
With one month until budget day, Immigration Minister Peter Dutton says his department is working closely with the treasury and finance departments to assess the likely impact of a possible shift in the migration program…
Mr Dutton said Australia’s 190,000-strong annual migration intake had to be driven by Australia’s national interest.
“There are ways we are looking at that we might be able to provide support to people to choose a regional city, for example, if they can find work there,” the minister told Sky News on Sunday…
Describing housing affordability as a “whole of government effort”, Mr Dutton said there were good reasons many migrants wanted to settle in the capital cities, including access to jobs and proximity to family and expat communities.
But getting them to move “beyond the city limits” and directing them towards regional centres could bring many benefits, he said.
“If we can encourage more of that – people moving away from capital cities – then I think that’s something we can embrace.
It is good that someone from the Coalition has finally acknowledged the deleterious impacts of the federal government’s ‘Big Australia’ mass immigration agenda on housing affordability and infrastructure in the major cities.
The Productivity Commission’s (PC) recent Migrant Intake into Australia report revealed that immigrants are far more likely to settle in urban areas than people born in Australia. As shown in the next chart, 86% of immigrants lived in the major cities of Australia in 2011, whereas only 65% of the Australian-born population did:
Moreover, according to the PC, “of the immigrants living in capital cities in 2011, most lived in either Sydney or Melbourne, with 1.5 million residents of Sydney and 1.3 million residents of Melbourne born overseas”.
The PC also explicitly noted that:
- “High rates of immigration put upward pressure on land and housing prices in Australia’s largest cities…”, and
- “Immigration, as a major source of population growth in Australia, contributes to congestion in the major cities…”
It is this mass immigration agenda that has driven Melbourne’s population up by an insane 1 million people (a 27% increase) over the past 12 years, and Sydney’s by 821,000 (a 20% increase):
It is this mass immigration agenda that is projected to grow Sydney’s population by 87,000 people per year (1,650 people each week) to 6.4 million over the next 20-years – effectively adding another Perth to the city’s population:
And is projected to grow Melbourne’s population by 97,000 people per year (1,870 people each week) over the next 35 years to more than 8 million people:
That said, Dutton’s solution of simply diverting population growth to the regions is likely to be unworkable and possibly undesirable. Short of locating government departments to the regions, what can the federal government realistically do?
Moreover, what good is it if all it means is that ‘urban sprawl’ is replaced by ‘regional sprawl’ as the regions simply become commuter towns for Sydney or Melbourne? Or, to put it another way, regional dormitory suburbs are created instead of fringe suburbs?
Rather than continuing to run an immigration intake that is so far above historical norms (see next chart), and creating problems for the major cities, the Turnbull Government should instead establish a national population policy that slashes immigration to the long-run average of 70,000 on the grounds that is is placing undue strain on infrastructure and housing, and is reducing living standards of incumbent residents.
To Peter Dutton’s credit, he has at least belatedly acknowledged that that Sydney’s and Melbourne’s population growth is both unsustainable and unwanted – both cities are barely functioning properly at current population levels. But his solution needs to address the problem at its source by returning Australia’s immigration intake back to historical norms.
Doing so would not only cut One Nation off at the head – given reducing immigration is the only card that it has to play – but also wedge Labor on housing affordability. It’s no brainer policy for the Turnbull Government if it wishes to stand a chance at the next federal election.
