Surging migration, housing crisis leave door open for Coalition

International students undertake unskilled and semi-skilled work, but the case for a large migrant intake has always been made on the basis of a strong skill bias. Picture: iStock

You may have read about the migrant crisis engulfing the small Italian island of Lampedusa. Ten thousand uninvited arrivals reached its shores in one week, eventually to be relocated elsewhere in the EU.

Needless to say, 10,000 in one week sounds an awful lot but here’s the thing: in Australia there are now more than 10,000 migrants arriving by plane each week.

To be sure, they are coming here on visas, but the intention of many is to stay, at least for as long as possible. Close to 100,000 recent arrivals have now applied for humanitarian visas, which will involve many years of assessments and appeals.

According to the latest figures from the Australian Bureau of Statistics, net overseas migration (long-term arrivals minus long-term departures) reached 454,000 in the year ending March this year.

The largest component is student arrivals. The annual increase in Australia’s population was a massive 563,000 people or 2.2 per cent. The NOM made up 80 per cent of the increase. Most new migr­ants head for Melbourne or Sydney.

Illustrating the naivety of the Treasurer on this issue, Jim Chalmers has simply asserted “the migration numbers are recovering. That’s not a government target or policy. That’s the demand-driven part of the program. It largely reflects the fact that international students are coming back quicker. That’s why we’re seeing these slightly higher numbers.”

In fact, the current numbers are significantly ahead of Treasury’s forecasts of peak NOM of 400,000.

Migrant numbers of this magnitude are both ill-judged and unmanageable. And unlike Europe, where action is difficult, the Australian government could act to reduce the migrant intake but simply refuses to do so. The simplest route would be to put caps on uncapped temporary visas but there are a number of options.

Under Labor, resources in the Department of Home Affairs to process visas have been ramped up to speed up visa processing. Boasts are now made about the number of visa applications being approved and the short time involved. Close to 90 per cent of all student visa applications are approved. The figures are quite staggering. In December last year, for instance, 97,000 student visas were granted compared with 24,000 approved in the previous December.

If we extrapolate the figures we are already at a record number of student visa holders in Australia, eclipsing the previous record. There has been a massive shift in the source countries, with very strong growth from India, Colombia, Brazil, The Philippines, Thailand, Pakistan, Bhutan and Bangladesh.

Those on student visas no longer have to hide their real intentions – to stay in the country after they graduate – which has been made easier by the close-to-automatic issuing of lengthy post-graduation visas.

Migrants wait at the port after arriving on the Italian island of Lampedusa.

Earlier in the year the government also received a very unhelpful report chaired by former senior bureaucrat Martin Parkinson that recommended all temporary migrants be given a pathway to permanent residence.

However, even the most ardent supporters of a large migrant intake and the benefits of a big Australia recognise there are annual limits to the extent to which migrants can be absorbed without adverse consequences for the local population as well as the migrants themselves. There is no doubt that a NOM of more than 400,000 a year – indeed, more than 200,000 a year – is beyond the absorptive capacity of the country.

The argument that the government’s hands are tied because of the need to fill skilled job vacancies is totally misleading. The vast majority of the migrant intake is not skilled and even when they complete their qualifications, overseas-born graduates are much less likely to fill professional or managerial occupations than graduates born here.

Certainly, international students undertake unskilled and semi-skilled work, but the case for a large migrant intake has always been made on the basis of a strong skill bias.

To preference employers seeking workers because they can’t find locals or don’t want to bid up wages is a serious policy mistake. Just as a lack of capital can thwart the operation and development of businesses, so can the lack of workers.

The government should not be in the game of seeking to fill all these worker gaps through facilitating migration, just as it wouldn’t want to cover an insufficiency of capital.

The better alternative is to allow the labour market to allocate workers to their best use and to limit the use of migration. Some firms may just have to shrink.

It doesn’t take an economics degree to realise this surge in the population would put immense strain on the housing situation and this is exactly what is playing out, particularly in the cities to which the migrants are flocking.

The vacancy rates for rental properties are at historic lows and rents are rising very strongly, well above the rate of inflation. The fact federal ministers can express concern for those adversely affected by the housing crisis yet do nothing to curtail the size of the migrant intake underscores a wilful downplaying of the connection.

The reality is that all the government housing plans announced thus far, including the federal one, don’t touch the sides when it comes to closing the gap between demand for housing and the supply.

People gather for a “Fix The Housing Crisis” rally at Sydney Town Hall.

Setting meaningless targets is similarly unhelpful. The federal government has declared that 1.2 million homes will be built in the next five years even though Australia has never achieved anything close to that figure.

And wait for this: according to the most recent figures, annual housing starts have hit a decade-low of just under 60,000. Just in case you think the newly created Housing Australia Future Fund will make a difference, it is anticipated that a mere 30,000 new homes will be built over five years as a result of this initiative and it will not begin for at least another year.

The reality is that government plans have a nasty habit of coming up short and the only sustainable way to deal with the housing imbalance is via private supply responding to private demand.

In the meantime our urban landscapes will be transformed from the previous predominance of detached housing to clusters of poor-quality high-rise apartment buildings. Our cities are already rapidly changing and not for the better in the minds of many.

The consequences of the migrant surge do not stop at the housing market. Congestion, crowded schools and hospitals, deteriorating social amenity, more generally, are some of the impacts.

The federal government can kiss goodbye to its emissions reduction pledge given such strong population growth.

Survey after survey point to the lack of public support for high rates of immigration. The vast majority want a return to previous levels – NOM was around 100,000 a year in the earlier years of the century; some would even prefer a complete pause.

But the politicians would rather prioritise the wishes of the vested interests seeking more migrants – the property developers, big business, universities and, bizarrely, even state governments.

If we think of this issue in a global context, people are on the move, be it via legal or illegal channels. Europe, Britain and the US are being overwhelmed by migrants, in particular. Political parties that support restrictions on immigration are gaining momentum.

There is a real opportunity for the Coalition to differentiate itself from Labor on this topic and thereby break from the bipartisan endorsement of big Australia.

It may take some courage, but is likely to be rewarded by increased support from voters.