Sydney’s “jobs boom” is really just an immigration boom

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By Leith van Onselen

Fairfax’s Matthew Wade has wrongly pinned the blame for Sydney’s housing and infrastructure woes on the city’s “jobs boom”, especially within the inner core:

Sydney has added nearly half a million jobs in the past decade but patterns of employment growth are putting the city’s transport system under pressure and helping to drive up property prices…

The report reveals Sydney’s inner suburbs have accounted for a disproportionate share of employment growth.

The proportion of the city’s jobs in the “inner Sydney” statistical area, which includes the cental business district and its immediate surrounds, swelled from 20.6 per cent to 22.4 per cent between 2006 and 2016…

While the increasing concentration of employment in Sydney’s key jobs hub has generated economic benefits, it is also placing strain on the transport network.

The report warned road and rail congestion “will only worsen in future” without better management of population and employment growth.

As more people choose to live close to high quality employment opportunities, demand for housing in inner city locations increases placing pressure on property prices and housing affordability.

“Policy needs to respond to these challenges, such as through improving public transport capacity and infrastructure, or through increasing housing supply in inner areas,” the report said.

Let’s get real here for a moment. Sydney’s housing and infrastructure woes aren’t being caused by an inner-city “jobs boom”, but by excessive population growth caused by the federal government’s mass immigration program.

According to the Australian Bureau of Statistics (ABS), Sydney added 774,000 people over the past decade, 69% (534,000) of which came from net overseas migration.

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In reality, Sydney’s so-called “jobs boom” of 479,000 failed to match the city’s immigration boom of 534,000. No surprise then that Sydney’s unemployment rate currently (4.8%) is actually 0.2% higher than it was a decade earlier (4.6%), whereas underemployment (7.7% currently) is also higher than a decade ago (6.3%).

The fact that Sydney’s employment growth has been driven by construction is also a concern, since this requires an ever increasing population to keep construction levels (and jobs) going: the very definition of a Ponzi scheme.

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Blind Freddy can see that the best way to alleviate Sydney’s infrastructure and housing woes is for the federal government to slash Australia’s immigration intake. 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):

Last month’s opinion poll showed clearly that Sydneysiders don’t want the 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.

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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.