In this article, Kevin You contextualises and disseminates the findings of the IPA’s research into Australia’s housing shortage and how that affects Australia’s economic freedom and prosperity.
The IPA has been dedicated to preserving and strengthening the foundations of economic freedom through research and analysis since its inception in 1943.
You know there is a problem when even the most woke, leftwing government in the western world is considering capping its student migration in order to fix housing shortfalls.
Yet that is exactly what the Trudeau government in Canada is currently considering. Canada’s Housing Minister Sean Fraser recently said that a cap on the number of foreign students to alleviate housing pressure “is one of the options we ought to consider”.
Fraser went on to note that “we’ve got temporary immigration programs that were never designed to see such explosive growth in such a short period of time”.
But don’t expect such refreshing, and unexpected, honesty to make its way to Canberra anytime soon.
New official figures released by the Australian Bureau of Statistics confirmed Australia is in the middle of the most rapid expansion in our migration numbers on record.
In the first seven months of this year, the federal government has presided over a record 317,800 new arrivals, which is already more than the entire annual intake in 2019, the last full pre-pandemic year.
And the bulk of this increase is Australia’s international student intake, which now accounts for some 80 per cent of total net migration into the country.
Australia has the highest intake of international students in the western world as a share of population. Our per-capita intake is now 15 per cent higher than Canada’s, more than double Britain’s, and quadruple that of New Zealand.
This record surge in Australia’s migration intake is occurring amidst a nationwide housing shortage, with the number of new houses approved for construction now at its lowest level in more than a decade.
And it is international students who are snapping up the lion’s share of the properties that are available on the market. Just last year, international students took up the equivalent of seven in 10 of all new properties built. And they are expected to take up around half of all new houses constructed this year.
So, at the same time as the government is pushing the accelerator on migration, the brakes are being slammed on housing construction. While the federal government is lauding its deal with the Greens on the Housing Australia Future Fund, it is only a drop in the ocean, creating, at most, just 6000 houses per year over the next five years, compared with the more than 300,000 new migrants who have already entered Australia this year.
And unlike Canada, where alarm bells are ringing, and being heard, our federal government is failing to act. There is no plan for the schools, roads, hospitals, public transport and housing that will be required to accommodate this dramatic and unprecedented surge in migration.
This is despite that fact that even the government’s own migration review released earlier this year explicitly noted the problems of unplanned migration.
According to the government’s Review of the Migration System, released in March, “through their contribution to population growth, international students place pressure on housing and local infrastructure”.
The review went on to note “these population costs are borne by communities that might not benefit from the value international education exports bring to the economy, which are often concentrated with education providers”.
In other words, even the government’s own review states that universities gain the benefits associated with international students but our communities pay the associated costs though high housing costs and the pressure placed on other economic and social infrastructure.
Concerningly, the review also noted international students are in direct competition with Australian students for local jobs: “international students increase the competition for work for their domestic peers … this may result in worsening employment outcomes for domestic students while studying and after graduation”. In plain language, unplanned migration costs Australians their jobs or sees them miss out on jobs they might otherwise have secured.
Australia is, and has been for decades, a tolerant and welcoming country. No reasonable person could question the critical place migration has had in our social and economic fabric, especially since World War II. The current issue, however, is the apparent lack of planning and foresight on behalf of the federal government.
Australians are asking how it is possible, let alone logical, that the government can commit to a record expansion in migration and international student numbers while dispensing with any plan to house them.
Little wonder why, according to a recent survey commissioned by the Institute of Public Affairs, seven in 10 Australians believe the current proposed migrant intake is too high and just six per cent said it is not enough.
The federal government should go back to the drawing board on its international student intake settings and consider placing a temporary cap on their number until enough houses are built to meet the needs of our current population.