Tony Abbott has stirred a response from the Real Estate Treasurer:
“I can understand why people would be superficially attracted to this idea that if you lower the level of permanent immigration that that will have that impact, but let’s just think it through,” Mr Morrison told 3AW.
“If you take this proposal, this is what it means. You’d have to drop [the intake] by 80,000. The hit to the budget of that would be about $4 billion to $5 billion over the next four years.”
Mr Morrison said the reason for population growth was temporary migrants and the government had taken steps to address that, including a clampdown on foreign worker visas.
“But a permanent cut to the permanent intake, it’s very hard to look at the data and see that that’s actually the problem,” he said.
Liar Morrison again. Temporary migrants leave. How can they boost population growth? It’s the permanent migrant intake that determines the level of net overseas migration and population growth:
On the Budget, the Federal Government collects most of the tax revenue derived from a larger population while the states bear the costs of delivering services and infrastructure to same. More roads, trains, buses, schools, police, hospitals, government services etc. Morrison is only discussing the benefits to his Budget without reference to the state costs. A holistic view sees little or no gain to the national public balance sheet.
On top of that, where’s the modeling? Is this another of Scott’s ‘from [his] experience’ policy arguments? Halving the migrant intake would lower house prices and residential construction versus the counter-factual but it would also boost wages mitigating consumption fallout. Not to mention give the Budget an outside chance of meeting its absurdly high income growth outlook. Moreover, a lower intake would materially drop interest rates and the currency, providing an offsetting strong tailwind to nominal growth and Budget revenues in tradable sectors.
Like most sectional analysis, Morrison is picking and choosing impacts not giving us the national view.
He ain’t the Real Estate Treasurer for nuthin!
