‘Absolute betrayal of the people’: Australian living standards in ‘terminal decline’, economist warns
Australia is on track to “obliterate” last year’s record immigration and it’s causing living standards to collapse, an economist warns.
Economy
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Australia is on track to “obliterate” last year’s record immigration levels as record population growth sends living standards into “terminal decline”, an economist has warned.
Leith van Onselen, co-founder of MacroBusiness and chief economist at MB Fund and MB Super, said the latest figures from the Australian Bureau of Statistics (ABS) last week suggested the Albanese government was lying when it vowed to bring annual net overseas migration back to a “sustainable” 250,000 people, after a projected fall to 375,000 this financial year.
Australia brought in a record 518,000 net overseas migrants last financial year.
Data released on Thursday showed a net increase of 55,330 migrants in January, the highest January intake ever recorded and more than double the 21,000 recorded last year.
“We smashed that out of the water and all it tells you is net overseas migration surged higher than its peak from mid last year and this 375,000 target is going to be absolutely obliterated,” Mr van Onselen told 2GB radio on Saturday.
“It’s just another sign that population numbers are out of control and it’s coming at the same time as housing construction is collapsing.”
ABS data also out last week showed the country added a net 166,000 homes last calendar year, at the same time as the population grew by 680,000.
“So we only added one home per 4.5 new residents,” said Mr van Onselen. “That there, ladies and gentlemen, is why we’ve got a rental crisis.”
In NSW, for example, in the year to June 30, 2023, the population increased by 173,000 “which was 100 per cent driven by net overseas migration”.
“Net overseas migration was actually 176,000 but you lost some residents to other states,” he said. “NSW housing stock only increased by 44,000 over the same period, so NSW added one home for every four new residents – actually a bit better than the national average but it’s still shocking.”
NSW Premier Chris Minns last week blamed the astronomical cost of housing for “many just up and leaving” over recent years, and warned the cost of the mass exodus will be severe.
“If you’ve got so many young people up and leaving, then they’re not joining communities, starting businesses, going to the pub with their mates, and when they get a little bit older, becoming the coach of the football team,” he told news.com.au.
Domain last week reported a record low national vacancy rate of 0.7 per cent. PropTrack, which uses different methodology, also reported a record low of 1 per cent.
In Brisbane, makeshift tent cities have begun to grow as the crisis escalates.
“It’s mostly in Brisbane but you’re seeing it everywhere – people having to live in their cars, group housing,” said Mr van Onselen.
“It’s 100 per cent driven by the federal government’s extreme immigration policy. What every listener should be thinking to themselves is, why is the Albanese government importing unbelievable, record numbers of people into Australia without a plan to house them and provide infrastructure, because we’re seeing the direct results here.”
2GB host Luke Grant said the issue of immigration was so far-reaching because “every policy setting is impacted by the number of people it affects or who live here”, and questioned whether the latest numbers indicated the government “just wants to screw the existing population over”.
“My great-grandparents came here from England, I was born here … we understand the importance of immigration,” he said.
“But this is recklessness of government, that’s what it is. We focus on some of the sexy stuff in politics but this is an absolute betrayal of the people. You and I never get asked about it. We are in the midst of Big Australia policy writ large. There’s no hiding from this.”
Mr van Onselen warned that for the first time, future Australians are facing lower living standards than the generations that came before them.
“Anyone who is old enough that lives in Sydney, ask yourselves this,” he said.
“At the turn of the century, Sydney’s population was about 3.9 million. It’s now about 5.3 million. Think back to the Sydney Olympics in 2000. Do you think Sydney’s quality of life was better back when the Sydney Olympics was on than what it is now? I guarantee if you’re old enough, probably nine out of 10 of you at least would say, ‘Yes it was a lot better back then.’ And the prime reason why it’s worse now is because we’ve added, you know, around 1.5 million people roughly in a very short period of time.”
The population explosion had created “capacity constraints everywhere, not just in housing but infrastructure”. “And now if you want to drive around Sydney, there’s basically toll roads everywhere,” he said.
“So, if you need to drive anywhere in Sydney now, you get Transurban pulling money out of your wallet. Twenty years ago you didn’t have to pay this stuff. But you’re only doing it because the federal government’s fire hosing record numbers of people into Sydney.”
It comes after former NSW Premier Bob Carr slammed Australia for running the highest rate of immigration in the world, saying “we don’t need it”.
“I’ve been trying to get Australians to understand that we do not need to have the highest rate of immigration, in proportion to our population, in the world,” Mr Carr told Sky News host Erin Molan on Friday.
“There’s no other country doing this. We’ve got third-world rates of immigration and we don’t need it. I just wonder why this is the only economic model we’ve got – to force feed population growth, to run the highest imaginable immigration intake, and to condemn our big cities to a relentless chase to keep up in terms of infrastructure. We don’t have to do it to guarantee Australia’s prosperity. In fact, it’s a pretty lazy way of running an economy.”
The former Labor Premier, who famously declared in 2000 that Sydney was “full”, said studies of mass migration into the UK showed there was “no economic benefit conferred on the existing population”.
“You could say that those who moved to the UK and found jobs did well, but there was no benefit to the UK itself, there was no benefit to the existing population,” he said.
“And I suspect that similar studies would show that to be true here. If you run remorselessly high immigration decreed by bureaucrats in Canberra year on year, you’re just making it harder for existing people, many of them migrants themselves, to get into home ownership or decent rentals. You’re producing a housing crisis.”
Mr Carr’s comments came after Australian businessman Dick Smith last week labelled the latest January immigration statistics a “disaster for families”.
“Every Australian family has a population plan to have the number of children they can give a good life to, but at the rate we are going it means the average Australian family will have less,” Mr Smith told The Daily Telegraph.
“The problem is billionaire political donors have a short circuit in their brains, and all they want is unlimited population growth to grow their wealth.”
Earlier this month, the Coalition said Australia’s migration levels were “too high” and needed to be drastically reduced to keep housing affordability and rent prices at bay.
Opposition immigration spokesman Dan Tehan said the country could not sustain the 1.6 million migrants forecast to enter the country over the next four years given the current housing and rental crisis.
“When people can’t get in to see a doctor, when we’re seeing cuts in our infrastructure … that is too high,” he told ABC’s Insiders.
“What we need is a proper plan when it comes to immigration and set out what that should look like … it’s a complete mess.”
But Mr Tehan dodged questions on exactly what the Coalition believed the numbers should be, saying only that they wanted a “better” not “bigger” Australia.
In December, more than 40 housing, homelessness and community service organisations wrote to the Prime Minister and opposition leader warning against “scapegoating migrants” for the rental crisis.
Advocacy group Everybody’s Home, which co-ordinated the letter, said it was “nonsense to blame overseas migration as a primary driver of a housing crisis that has been decades in the making”.
“During the Covid era which had lower migration, rents actually increased more than they did in the preceding decade,” Everybody’s Home spokesman Maiy Azize said.
“Migrants make a valuable contribution to society and fill workforce shortages. They don’t just create demand for housing, they help build the homes we need. To make housing affordable again, our leaders must tackle the big drivers of this crisis. That means ending the unfair tax policies that push up the cost of housing, and building more social housing.”
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