RBA confesses record immigration is bad for workers, renters


Recall RBA governor Michele Bullock’s remarks on Tuesday, playing down the impact that record immigration levels are having on CPI inflation:

“New migrants add to demand and there’s been that element of it. They are certainly adding to pressure on the housing market. We know that. But on the other hand, they’ve added to labour supply”.

“One of the biggest complaints that I used to hear from businesses during the pandemic and during the border closures was they couldn’t get people. They couldn’t get staff”.

“And even as we we come out of those circumstances, you’ll remember the labour market was so tight – businesses just could not get workers. So, they’ve added to the supply side of the economy as well”.

“So, I think our judgment is that, on balance, it really hasn’t added dramatically to inflation, with the exception that it has put big pressure on the housing market and that’s obviously working its way out in rents”.

The governor essentially claimed that strong immigration is driving up housing inflation, most notably in the rental market, but that this is being offset by immigration dampening wage growth.

Using her logic, immigration is an unmitigated disaster for working Australians, since it lowers their wages while driving up their cost of living.

Anyone trying to rent or buy a home in Australia can see that current immigration levels are highly inflationary.


It is even worse when the tidal wave of labour imports easily outpaces the number of available jobs:

Unemployment versus job applications

Soon, the unemployment rate will shoot upwards, sending wage growth sharply lower.


Meanwhile, rental inflation will remain hot as immigration demand for housing swamps falling rates of construction:

Housing supply and rents

You literally cannot devise a more destructive policy for working Australians than mass immigration.


I discussed these issues in brief in a live interview with 7 News Melbourne on Wednesday.

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.