Migration brakes on too early: builders

The housing sector says putting the brakes on permanent migration now could exacerbate a home-building slowdown.

Housing Industry Association principal economist Tim Reardon.

Home builders say it is “not the right time” to put the brakes on permanent migration because it could exacerbate a slowdown in construction.

Leading demographers have also warned that Scott Morrison’s new population plan will result in a “huge labour-supply crunch”.

Figures released yesterday by the Australian Bureau of Statistics show the population growth rate for the 12 months to the end of September holding steady at 1.6 per cent, with the number of residents estimated to have increased by 395,100 to 25.1 million.

The net overseas migration rate fell by 7.5 per cent, with 240,100 people entering Australia compared with 259,400 people the previous year — a decline partly fuelled by the large numbers of ­departing foreign students.

Victoria recorded the highest growth rate of all states and territ­ories at 2.2 per cent, followed by the Australian Capital Territory at 1.9 per cent and Queensland at 1.7 per cent. The figures were released­ after the government announc­ed its plan to impose an annual migra­tion cap of 160,000 and introduce new visas to ensure at least 23,000 new migrants settled­ in regional areas.

Housing Industry Association chief economist Tim Reardon yesterday expressed concerns with the plan. He told The Australian the economy had been driven by the home-building industry over the past five years, and a pullback on the permanent intake could contribute to a reduction of employme­nt in the sector.

“If we see a contraction in population growth at this point in the cycle, that would accelerate the downturn in home-building activity and have stronger impli­cations for the wider economy,” he said. “One in 10 Australians is ­employed in building and con­struction­ … This is not the right time in the cycle to apply the brakes on population growth.”

Migration Council of Australia chief executive Carla Wilshire said the focus in Australia’s migration framework appeared to be shifting from the permanent intake to temporar­y skilled workers.

“I think the announcement to cut the permanent program swings the pendulum more toward­s a temporary framework,” she said. “It can create all sorts of other issues around social cohesio­n and integration.”

Ms Wilshire also expressed concern that the overhaul to the permanent intake was aimed at reducing congestion in major cities.

“My concern is that every time we look at population, we look at it through the lens of infrastructure and congestion rather than through the broader framework of industry policy, global competitiveness and (geo-strategic) posit­ioning,” she said.

University of Melbourne demog­raphy professor Peter ­McDonald told The Australian the reduction in the permanent intake was unwise given the Prime Minister had pledged to create another 1.25 million jobs and that about two million baby boomers were due to retire by 2024.

He said “there was no way in the world” that these 3.25 million jobs could be met “from Australian sources only”, arguing that the gap would need to be filled by temporary skilled workers.

“Given the labour-supply crunch that Australia faces at the moment, it does not make econo­mic sense to cut the migrant intake,” Professor McDonald said.

The chairman of Tony Abbott’s commission of audit, Tony Shepherd, backed the population plan as sensible policy, arguing that “population growth got ahead of growth in services and infrastructure in some cities”.

However, he said the issue of skilled labour supply could “only be fixed over time by a complete reform of our skills and training policies and processes”.

“In the meantime, temporary visas for missing skills are essential to keeping the economy going. That a country like Australia cannot­ train up enough skilled tradespeople is a disgrace.”