On Tuesday night, I was interviewed by Sky News’ Steve Price on Wednesday’s MYEFO and Labor’s fake immigration cuts:
Below are key extracts.
Edited Transcript:
Steve Price:
That’s why governments love Big Australia don’t they? They like to have lots of migrants come into the country because it means they get tax receipts?
Leith van Onselen:
It’s really only the federal budget that benefits from this because the federal government collects 80% of the tax revenue. So they get all the gains from personal income taxes, company taxes, that you get from a bigger population and more economic activity.
The problem is the cost of that all falls on the states because the states provide the services – hospitals, schools and infrastructure.
Source: Alex Joiner
And the cost also falls on you and me because the states have to sell off all their assets and then we have to pay higher user pay charges like toll roads.
Steve Price:
You can correct me here if I’m wrong. But isn’t one of the problems that is driving inflation is the massive debts that states like Victoria, in particular, have and the interest payment that is due to pay off?
Leith van Onselen:
The bigger problem with Australia is the federal government has basically got its foot on the accelerator pumping in record numbers of people. And that’s basically pumping demand across the economy.
So, we’ve got the situation where individual households on average are cutting back their expenditure but we’re adding more households than households can cut back.
And what that’s basically doing is pushing up inflation.
At the same time, you’ve got all the state governments trying to build infrastructure to keep up with this mass immigration, and that’s obviously putting pressure on inflation.
So basically, we’ve got a burnout economy where the federal government has got the foot on the accelerator while the RBA’s got the foot on the brake jacking up interest rates.
And the losers are the mortgage holders in the middle as well as Australian renters who have seen rents go through the roof through this record population growth.
It’s a diabolical situation…
The way the economy set up at the moment, we’ve got record numbers of people coming in through this crazy immigration program.
Unfortunately, as much as we don’t like to hear it, our governments have to spend money on infrastructure and housing to keep up with that population growth.
Because if they don’t do it, our living standards go backwards. But if they do it, we’re going to have this this problem of increasing debt and increasing inflation.
So, we’re kind of caught between a rock and a hard place…
They’re fire hosing record numbers of people into the country. And we just don’t have the houses and infrastructure to keep up.
That means that we’ve got people being made homeless, we’ve got rents going through the roof, and living standards becoming crush loaded.
