Scott Morrison outright lies on immigration and negative gearing

By Leith van Onselen

Australia’s real estate treasurer, Scott Morrison, gave a poor interview on The Chris Smith Show yesterday, whereby he contorted arguments in favour of negative gearing and maintaining Australia’s mass immigration ‘Big Australia’ policy.

First, here’s Morrison’s remarks around negative gearing (from 2.36):

“One in five police officers negatively gear. About 62% of Australians that negatively gear have a taxable income of less than $80,000. Now, they are not rich people. They are just people trying to get ahead and make their way. Nurses, teachers, all of them they negatively gear. And Labor wants to increase their capital gains tax to those that do it in the future by 50%”.

The illogicality of Morrison’s argument knows no bounds. In his speech to the Australian Housing and Urban Research Institute in April, Morrison explicitly bemoaned the fact that nurses and teachers, in particular, are unable to buy houses in the communities which they serve:

“In short we need more housing, not just for homeowners, but for renters, for key workers such as nurses, teachers and police officers who can’t afford to rent or buy in the communities they serve and for those on low incomes, the disabled and disadvantaged”.

Yet on the other hand, Morrison claims that negative gearing is okay because lots of nurses, teachers and police do it?

This obvious contradiction was noted at the time by Fairfax’s Michael Pascoe:

[It is] a statement of the obvious that you can’t help first homebuyers by endorsing ever-higher housing prices…

Which is why restricting negative gearing to new and off-the-plan properties would encourage more supply, while simultaneously easing price pressures on existing housing.

But then the contortions begin. ScoMo would have us believe the beloved nurses, teachers and police officers who can’t afford to rent or buy apparently are the same people who are doing most of the negative gearing.

Morrison’s illogical arguments were even worse when it came to discussing Dick Smith’s campaign to lower Australia’s immigration intake (from 6.00):

“What you’ve gotta be careful about here is – well I spend a lot of time after the Budget in South Australia, Western Australia, Northern Territory and so on – that’s where you’ve got population going the other way. And the are states and territories that actually need more population. And so what we have to do is make sure that the people go where they need to go…

Barnaby’s got some agricultural offices moving up to his part of the world, and equally we are seeking to do that through the immigration system. And I think they are good policies to do that. Otherwise, even if you cut immigration, then you’d have just as many people turning up to Sydney and Melbourne and no one going anywhere else. So you still get the traffic jams in Sydney and the Western Australian economy goes backwards”.

What complete and utter lies.

First, the WA, SA and NT populations are not shrinking. Their populations increased by 16,835 (0.7%), 10,322 (0.6%) and 645 (0.3%) respectively in the 2016 calendar year.

Second, the claim that “even if you cut immigration, then you’d have just as many people turning up to Sydney and Melbourne and no one going anywhere else… So you still get the traffic jams in Sydney” doesn’t pass the laugh test.

The uncomfortable truth is that the settlement pattern of new migrants into Sydney and Melbourne has become extreme over the past five years, according to the latest Census. As noted by Tim Colebatch:

…the third wave of migration we are seeing now is almost completely city-centric. In Sydney on census night, the 224,685 Chinese migrants… But in the rest of New South Wales, with its 2.65 million people, the census found just 9578 Chinese migrants. Only 4.2 per cent of those in New South Wales live outside Sydney.

Sydney is also home to 96.3 per cent of the state’s Vietnamese-born population, 97.4 per cent of its Iraqi migrants, and 97.6 per cent of its Lebanese…

Migrants to Victoria are similarly concentrated in Melbourne. The few square kilometres ruled by the Melbourne City Council houses four and a half times as many Chinese-born residents as the 210,000 square kilometres of regional Victoria, which includes cities like Geelong, Ballarat and Bendigo. Melbourne is home to 97.2 per cent of Victoria’s Chinese migrants, 96.8 per cent of its Sri Lankans, 94.9 per cent of its booming Indian-born population, and 98.0 per cent of its Vietnamese…

Migrants usually flock to the cities. It’s natural that newcomers go where they have friends or family. But what we are seeing now is that natural tendency carried to extreme lengths.

Accordingly, the NSW’s Government’s own population projections show that Sydney’s population would increase by 1,739,900 (37%) under current mass immigration settings, but by only 207,250 (4%) if net overseas migration was cut to zero:

The reality is that maintaining a mass immigration ‘Big Australia’ policy means that Sydney and Melbourne will continue to be crush-loaded as their populations swell by the millions, placing extreme further pressure on infrastructure and housing, and destroying living standards for incumbent residents.

Obviously cutting Australia’s immigration intake would directly relieve these pressures.

Scott Morrison needs to stop lying.

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