Revolt over Sydney population ponzi to decide state election

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By Leith van Onselen

The growing backlash over Sydney’s rapid immigration-driven population growth is now shaping up as the key issue that will decide the next state election. From The SMH:

Confronted with an increasingly cynical electorate and one which is fed up with congestion, the Berejiklian government, having declared housing affordability among its top priorities, has found itself defending its signature planning strategies aimed at fast-tracking housing supply.

Politicians might have once dismissed it as fringe nimbyism, but a fermenting contempt for overdevelopment, or the perception of it, is now bubbling to the surface in communities across Sydney.

John Daley, chief executive of the Grattan Institute, says the politics of planning have become poisonous.

“There’s no question that this is politically a very hard sell,” he says. “Everybody agrees that density should increase in Sydney in the suburbs next to theirs. That’s the issue in a nutshell.”

The government, he says, needs to do a better job of explaining the flipside of leaving neighbourhoods unchanged.

“If you do that, your children will not be able to afford to buy a house. And when they do, it will be 30 kilometres from where you are living, so good luck seeing your grandchildren,” Daley says.

That sales job could prove to be tougher than usual, given some Liberal MPs are now openly questioning the merits of their own government’s policies that would result in thousands of more homes built in their electorates…

“This is going to be a huge state election issue – it is the only issue that my constituents are talking about in my electorate, and I know several other MPs have concerns also,” [Senior government minister David Elliott] told The Sunday Telegraph…

“My community is saying Rhodes is at capacity,” [Drummoyne MP John Sidoti] says…

Their comments dovetail with a widely held sentiment revealed last month by a Fairfax ReachTell poll, which found an astonishing two-thirds of NSW residents believe Sydney is “full”…

Labor has recognised the political capital to be tapped from the vein of overdevelopment and has made clear it wants planning strategy to be an election battleground…

Labor is also quick to point out that its heartland suburbs are being forced to absorb the bulk of the population growth, while some blue ribbon areas have much more modest targets and others are left largely untouched…

The Greater Sydney Commission, an independent body responsible for shaping long-term planning strategy for Sydney, has estimated the city will need about 725,000 extra homes over the next 20 years as the city’s population climbs to 6 million.

And in updated plans released last week, the commission held firm on mandating Sydney councils to find a way to deliver almost 200,000 new homes by 2021, assigning each council five-year housing targets.

As usual, John Daley from the Grattan Institute has failed to acknowledge the fundamental driver of Sydney’s crush-loading and over-development: the federal government’s mass immigration program:

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According to the NSW Government’s own population projections, Sydney’s projected population increase over the next 20-years (i.e. 1.74 million people at 87,000 people per year) will be driven almost entirely by net overseas migration (i.e. 1.53 million or 77,000 people a year):

So, it is a direct policy choice how big and crowded Australia, and by extension Sydney, becomes.

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If the federal government maintains our current mass immigration ‘Big Australia’ settings, then Australia’s population would hit more than 40 million mid-century, and Sydney’s population would hit some 8 million. But if the federal government normalises the intake back to the historical average of 70,000 people a year – as advocated by Dick Smith, Sustainable Australia, and MB – then Australia’s population would hit around 32 million people mid-century, with Sydney’s population hitting between 6 million and 6.5 million people.

Sydneysiders have spoken. They don’t want their city turning into a crowded, expensive, high-rise hellhole. It’s about time our politicians recognised this reality and represented their wishes by slashing Australia’s permanent migrant intake back to sensible and sustainable levels. Otherwise, the revolving door of government, and the rise of minor parties, will continue.

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About the author
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.