The Albanese Government’s record immigration policy has inflicted a triple whammy on Australian households by:
- Creating a rental crisis that is forcing financial hardship on tents, forcing Australians into share housing, and pushing many into homelessness.
- Driving inflation higher as population demand overruns the supply-side of the economy, most visibly via the housing market. This will inevitably keep interest rates higher for longer, negatively impacting households with mortgages.
- The record labour supply growth will drive up unemployment and put downward pressure on wages, harming workers.
On Thursday morning I was interviewed by Radio 2GB’s Luke Grant where we discussed this “triple whammy” in detail:
Below are some highlights of the interview separated by theme.
Housing Crisis:
“The long short of it is that only 170,000 dwellings were added to the nation’s housing stock last financial year (2022 23). That’s against a population increase of 626,000”.
“So, we basically added 70,000 less than what Albo’s housing Target is, which requires 240,000 a year”.
“Why it matters is obviously the rental vacancy rate is at 1% nationally: the lowest in living history”.
Source: CoreLogic
“With the population growing by over 600,00 people a year and not building nearly enough homes, it points to one thing: the rental crisis is going to keep getting worse and rents are going to keep rising at strong rate”.
“You’re going to have more financial stress more people being forced to live in group housing and of course more homelessness”.
“So, the data just keeps getting worse, which tells you that if you can’t fix the supply-side – you obviously can’t do it, it’s going to take forever even if you could do it – the only solution is to tempered demand through cutting immigration and slowing the flow of people”.
Unemployment shock:
“Every other measure other than the ABS is basically getting worse. Roy Morgan’s got an alternative unemployment survey that has risen by 1.5% over the past year”.
“Those two surveys traditionally track each other very closely. What Roy Morgan’s basically seen is that Australia’s created 50,000 jobs in the year to September but labor force grew by 412,000. That’s obviously because of this high immigration”.
Source: Justin Fabo (Macquarie Group)
On top of that, there’s another great survey from SEEK – applications per job ad – which is basically a measure of supply and demand”.
“The number of applications has been rising very quickly because of the extreme immigration”.
“The number of applications per job ad is running now way above where it was pre pandemic, which basically tells you that the labour supply is growing super quickly and much faster than the demand for workers, which is falling because we’ve got these high interest rates”.
Source: Justin Fabo (Macquarie Group)
“Again, that indicator has historically tracked very closely with the ABS’ unemployment figure. And if you put them side by side, it’s a leaded indicator”.
“It’s basically saying that the official unemployment rate, as measured by the ABS, is going to shoot up quite aggressively”.
“An excellent independent economist named Tarric Brooker has done some work and basically Australia at the moment needs to create 38,000 jobs a month just to keep the unemployment rate stable because of such high population growth”.
“He did a thought experiment where he said: if the labour force keeps growing at 38,000 per month and our jobs growth merely goes back to what it was pre-pandemic, which is 22,000 a month, then Australia’s unemployment rate is going to rise to 5.2% by the end of next year”.
Source: Tarric Brooker
“We’re adding so many people through migration that we just don’t have the jobs to soak up all these people, which means the unemployment rates are never really going to rise”.
“So, it’s not been picked up yet in the official figures”.
Inflation and rate hikes:
“The RBA’s latest Minutes that released on Tuesday basically signaled two things that it’s worried about. The RBA mentioned that residential rents are growing at a fast rate and that’s adding inflationary pressure to the market”.
“That’s what happens when your population grows by 600,000 in a year, rents go up”.
“The other thing it said it’s worried about is rising house prices. Although it does directly feed into inflation, when house prices rise typically households spend more because of what’s called The Wealth Effect”.
“So they feel wealthier and they spend more”.
“The RBA is worried that it’s going to have to raise interest rates to counteract that. And both of those things – the rebound in the housing market in prices and rents – has been caused by this immigration boom”.
“So, we’ve basically got a triple whammy where demand through population growth in immigration is running way ahead of supply, whether it’s infrastructure or housing”.
“So that’s creating this massive housing shortage that’s pushing up house prices and rents, which is adding inflationary pressure”.
“This means the RBA is going to hike more. And then it will also increase unemployment because we don’t have enough jobs to soak up all the extra people”.
“Immigration has almost become the everything problem for Australia because it is creating all these pressure points”.
Subscribe to my YouTube channel to access all of my media interviews.
