The Albanese government won’t like Treasury Secretary, Steven Kennedy, blaming record immigration for the nation’s rental crisis.
Here is what Kennedy said to the Economics Legislation Committee just hours before Wednesday’s CPI inflation figures came out:
“The rapid recovery in migration is adding to pressures in the housing market”.
“Growth in national advertised rents peaked at 9.6% through the year to September 2022. Growth has since eased to be 8.4% through the year to September 2023, but the rental market remains tight, with vacancy rates remaining near record lows”.
“A large backlog of residential construction activity, along with a forecast pick-up in medium‑density activity, will gradually lift supply over the coming years, but this will not alleviate near‑term rental pressure”.
“Indeed, capacity constraints including labour shortages are still limiting the sector’s ability to work through its pipeline, with new residential construction activity holding broadly steady over the past year”.
Kennedy might want to check his advertised rents figures, which are below those quoted by CoreLogic, PropTrack, Domain, and SQM Research.
Nevertheless, he is right to at least acknowledge that the federal government’s record immigration is behind the rental crisis and will continue to worsen as housing supply continues to badly lag demand:
Kennedy’s Australian Treasury should also share the blame, given it has been one of the key supporters and drivers of the ‘Big Australia’ mass immigration policy (as explained in detail here).
The Australian Treasury loves mass immigration because it only has two key performance indicators (KPIs) that are narrowly focused and do not align with the broader interests of Australians:
- Treasury only cares about the health of the federal budget, while ignoring impacts on state budgets and household budgets.
- Treasury only cares about growing the economic pie (aggregate GDP), not everyone’s slice of the pie (GDP per capita) or broader livability/environmental impacts.
Treasury gets to boast that Australia has avoided recession when GDP per capita, and everyone’s slice of the economic pie, is shrinking.
Treasury should, therefore, be viewed like the business lobby.
It supports endless mass immigration because it gets to privatise the gains while the costs are socialised on the states and broader community.
