Just say it Grattan: “cut immigration”

By Leith van Onselen

The Grattan Institute has released its State Orange Book 2018, which notes that the major states are under immense pressure from Australia’s mass immigration ‘Big Australia’ policy, which has crush loaded infrastructure, driven down home ownership rates, and driven up homelessness. Below are some key extracts highlighting these concerns:

State governments – particularly NSW and Victoria – face population pressures… Australia’s total population is growing rapidly. Sydney and Melbourne, in particular, are booming… Australia is becoming even more urbanised. Around 80 per cent of the population occupy less than 1 per cent of the land mass…

Nevertheless, governments have been building a lot of new infrastructure. Over the decade to mid-2018, construction work on new transport projects for the public sector cost more than $180 billion. But much of this money was not well spent… the level of congestion in cities is still a community concern. There is overcrowding on public transport at certain times in some cities, and commuting times can be unreliable…

Over the 15 years to 2016, Australian governments spent $28 billion more on transport infrastructure than they told taxpayers they would. The cost overruns amounted to nearly a quarter of total project budgets… Cost overruns are a significant problem in transport infrastructure….

Spending on infrastructure has ramped up as states cope with increasing population and concerns about congestion, but higher interest and depreciation costs will weigh on state budgets in the years ahead…

Australian housing is becoming increasingly expensive, and public anxiety about housing affordability is rising. House prices have grown much faster than incomes,205 and rents have also risen, especially for cheaper homes.206 In part, housing prices and rents have risen because interest rates fell and incomes rose, while tax and welfare settings and rapid migration fed demand. But housing costs would have risen less if there had been more housing.

Australian cities have not built enough housing to meet the needs of Australia’s growing population, so there is less housing stock per adult… Lower income households are spending more of their income on housing,207 which increases income inequality…

Rising housing costs contribute to increased homelessness. About 50 Australians out of every 10,000 were homeless in 2016. Rates of homelessness have increased in the past five years in all states except WA, ACT and the NT…

… today’s record level of housing construction is the bare minimum needed to meet record levels of population growth driven by rapid migration (Figure 5.2); and the backlog of under-supply remains. If the population grows as projected, future rates of construction will need to be even higher than current elevated levels…

But instead of attacking the problems at the source – by arguing to reduce immigration (population growth) – Grattan has instead called for suburbs to be bulldozed to make way for higher density housing:

[State Governments] should resist political pressure to wind back planning reforms that have helped to increase housing supply, and instead should go further to ensure enough housing is built, particularly in established suburbs, to accommodate rapidly growing populations…

Current rules and community opposition make it very difficult to create extra residences in the inner and middle-ring suburbs of the capital cities, and the same forces are at work overseas.221 State and local governments should change planning laws and practices to make it easier to subdivide in these suburbs…

To ensure that approval processes work properly, state governments should set housing targets for each council. The targets should be linked to plans for the growth of the city as a whole…

But state governments also need to make sure these targets are met. They need to carry bigger ‘sticks’, to ensure councils don’t ignore future targets as they have past targets. The sticks might include creating powers for the state government to take over authority for a larger share of development approvals if councils fail to back appropriate development…

Affordability – both to buy and to rent – will only get a lot better if governments ensure more homes are built. This is primarily a problem for state governments: they set the overall framework for land and housing supply, and they govern the local councils that assess most development applications. Building an extra 50,000 homes a year for a decade could leave Australian house prices 5-to-20 per cent lower than what they would have been otherwise, stem rising public anxiety about housing affordability, and increase economic growth…

Grattan also wants direct ‘time-of-day’ pricing on roads and public transport to better manage the ever-growing demand:

The NSW and Victorian governments should introduce time-of-day congestion pricing in the most congested central areas of Sydney and Melbourne, charging at peak periods to enable freer-flowing roads…

State governments should increase the differences in public transport fares depending on the time of day, to spread demand…

The Victorian Government should increase the CBD parking space levy in Melbourne from about $1,400 to about $2,400 per year.

The fact is, Infrastructure Australia’s projections for Sydney and Melbourne show that traffic congestion is projected to soar and access to jobs, schools, hospitals and open space will all decline by 2046, irrespective of how these cities build-out to cope with populations of 7.4 million and 7.3 million people respectively:

The easiest ‘solution’ is forever ignored by outfits like Grattan: lower immigration back to historical levels and prevent the infrastructure and housing problems from developing in the first place:

It’s hardly brain surgery.

[email protected]