World-leading 2 per cent annual population growth, due to a record influx of migrants, is keeping the economy ticking over and above water.
The downside is governments have been caught on the hop by the post-pandemic people surge, which is leading to higher rents, road congestion and service snarls.
Such mismanagement, even if the boom is driven by an irregular dynamic and proves to be temporary, weakens community assent for immigration.
Anthony Albanese is not pursuing a “Big Australia” per se, just like the previous stewards in Canberra were not running a scam by stealth when migration drove 60 per cent of population growth on their watch.
Of course, that would imply a level of control over temporary migration our major political outfits and officials don’t have.
In May, the federal government announced the planning level for this financial year’s permanent migration program would be 190,000 places, with a 72-28 split between skilled and family visas, slightly down from 195,000 places the previous year.
And yet the record two-year figure estimated by Treasury in the budget for net overseas migration – which takes in foreign students, backpackers and temporary workers – is expected to be 715,000, or 330,000 more.
On these numbers, we’re most likely to see an undersupply of around 200,000 new homes over five years, although such an estimate is extremely sensitive to expectations of what happens to average household size (which fell during the pandemic but is likely to rise with the return of foreign students).
As outgoing Reserve Bank governor Philip Lowe has explained, while some sectors, such as hospitality, are benefiting from an easing of labour shortages, the record population surge is pushing up rents and housing prices.
“Population growth brings huge advantages to the country, but we need governments and businesses to keep investing to build a capital stock to support a stronger population,” he said.
The migrant influx will provide a needed boost to the struggling housing construction industry but it won’t lead to an immediate easing of pressures on supply. It takes around two years to build an apartment building – from approvals, to presales and construction.
Next week, national cabinet will meet in Brisbane and the Prime Minister has put “increasing housing supply and affordability across Australia” at the top of the agenda.
As the Business Council points out in its new migration report, “poor performing planning systems and restrictive zoning are significantly impacting the delivery of new housing supply”. Migration, it argues, should not be a “scapegoat” for these failures.
Sure the BCA represents many vested interests who want a bigger market for their products (it sure beats dog-eat-dog competition).
But the big business lobby does make an irresistible case for the vast benefits the most talented migrants bring; they give and give on the fiscal score and, when employed in the right companies, bring innovations and fresh thinking.
According to the Department of Home Affairs, at the end of June, there were 2.46 million foreigners here on temporary visas; a year earlier there were 1.93 million temporary residents.
The extra 530,000 people are primarily those with work rights and they’re staying put.
The number of students rose by 60 per cent in the past year to 570,000, still below pre-Covid peaks, while backpackers are back to previous highs. The number of temporary residents on graduate visas has doubled to 200,000 in a year.
As April’s Migration Review reported, temporary residents satisfy the conditions to get a visa but we don’t know much about what they do when they’re here.
That’s unforgivable.
Labor is working its way through the review’s findings, many of which relate to reform of an overly complex visa system, skills lists and better paths to permanency.
It’s up to incumbents to fine tune what should be a national asset, but one that has been tarnished by neglect and short-term profiteering, so that migration is not paying the long-term dividends it has in the glorious past.
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