The Australian’s Judith Sloan has penned a great piece today highlighting the Turnbull Government’s Budget housing affordability sham and arguing that if the Coalition truly cared about the issue, then it would have slashed immigration:
Last week, Michael Sukkar, Assistant Minister to the Treasurer, wrote a feeble op-ed article outlining what the government had announced in the budget on housing.
There was the release of some Defence land (useful but not overnight); the limited use of superannuation to allow individuals to save for a house deposit; some concessions for wealthy retirees to downsize; penalising foreign investors in housing in small ways; assisting in the provision of concessional financing for social housing; and reworking the housing and homeless agreement with the states and territories.
The list may seem long but the impact on housing affordability will be negligible and the government knows that…
But there is one lever the federal government does control, but it was not prepared to make any adjustment. That lever is the number of immigrants allowed into the country. Population growth is a major explanation of surging house prices as supply struggles to keep up with demand.
…there had been no change to the migration program numbers — 190,000 a year for the coming financial year and in the next three…
You get the distinct impression that Immigration Minister Peter Dutton quite likes playing the tough cop on the beat when it comes to certain immigrants. But we are effectively being asked to look over there — we are deporting a few hundred failed asylum-seekers — while the large-scale immigration program is simply allowed to roll on without adjustment.
At 190,000 a year, immigration now makes up more than half of our population growth, and Australia has one of the highest rates of population growth among developed economies…
So why wouldn’t the government make the obvious call and reduce this number, particularly as this would have given substance to the claim that the pressing issue of housing affordability is being addressed?
Sloan goes on to explain how the Coalition has presumably kept the throttle on immigration to:
- Juice aggregate GDP growth, even if per capita growth is unaffected;
- Keep the business sector happy, which benefits from lazy growth (think retail sales, the property industry, etc), as well as from oversupplying labour and maintaining downward pressure on wages; and
- Maintain the flow of foreign students seeking permanent residency into our university sector (effectively selling residency rather than education).
So when you next hear Dutton blathering on about getting tough on refugees and 457 visa holders and the like, bear in mind that on the big issue he has simply squibbed it.
If the government really had wanted to demonstrate its determination to improve housing affordability and the related pressures on urban infrastructure, it would have slashed the migration program numbers, but it was clearly too hard. The vested interests have had their way.
The situation is even worse than Judith Sloan makes out.
First, the permanent migrant intake has actually been maintained at roughly 205,000, not 190,000, since the humanitarian intake must also be included:
Second, there are two other areas where the Turnbull Government has stealthily boosted immigration, which are separate to the permanent migrant intake. These are:
- Announcing last year that it would allow foreign students aged 6 and up as well as their guardians to apply for student visas, thus adding even greater pressures on Australia’s primary schools, as well as placing more strains on housing and infrastructure.
- Announcing this month that from 1 July 2017, a new parental visa will be introduced that will allow migrants to bring into Australia their elderly parents, thus placing even more strain on Australian housing, healthcare system and infrastructure.
To these you can add the sham changes to the 457 temporary “skilled” visa system, whereby the Turnbull Government has kept the pay floor at a pitifully low $53,900 (35% below the average full-time salary of $82,789), thus encouraging the widespread importation of cheap foreign workers and undercutting Australian wages and labour standards.
Nevertheless, Judith Sloan is 100% correct when she states that “population growth [read immigration] is a major explanation of surging house prices as supply struggles to keep up with demand”.
The fact is, without the Federal Government’s mass immigration program, population growth into our major cities would be low and easily manageable, resulting in far less pressure on both housing and infrastructure.
A case in point is the NSW State Government’s population projections, which show that Sydney’s population would rise to just 4.9 million in 20-years time under zero net overseas migration, versus increasing to 6.4 million people under current mass immigration settings – a huge difference of 1.5 million people:
That’s the equivalent of nearly four Canberras worth of additional people flooding into Sydney, each of whom will compete for housing and place huge upward pressure on prices.
The single best thing the Federal Government could do to alleviate the housing crisis in Sydney and Melbourne is rein-in Australia’s mass immigration program and take the pressure off both housing supply and infrastructure.
That the Coalition has instead stealthily acted to boost immigration shows they are housing affordability phonies.