Saxon Davidson Discussing Migration And Housing On ADH Spectator TV

On June 23, IPA Research Fellow Saxon Davidson joined Alexandra Marshall on ADH TV – The Spectator Australia to discuss the ongoing Migration and Housing crisis.

All media appearances posted onto the IPA website are directly related to the promotion and dissemination of IPA research.

Below is a transcript of the interview.

Alexandra Marshall:

There are a few topics causing Australians more grief than the housing market, whether they are renters struggling to find something larger than a shoebox or mortgage payers being told by the RBA to work more hours to cover rising interest rates. Joining me from the Institute of Public Affairs is Saxon Davidson. Saxon, welcome to Spectator TV.

Saxon Davidson:

Thank you for having me.

Alexandra Marshall:

The old line it won’t be easy under Albanese appears to have been accurate. Your article touches on several key points, the first being public sentiment toward mass migration, which for Australia is the highest in the world per person. Can you tell us what the Institute of Public Affairs found when it comes to support for current levels of migration?

Saxon Davidson:

Well, that support is very low. We released a poll a month or two ago that found that 60% of Australians want to pause, not limit or reduce, but pause immigration intake until there is an adequate supply of housing and infrastructure. And this was backed up just a week or two ago when The Guardian, who were the last people you would think that would report on this kind of stuff, found that 59% of Australians when they polled also said that they wanted a cap on immigration because of housing and infrastructure shortages.

Alexandra Marshall:

Well, gosh, if The Guardian’s reporting, it must be widespread. And even on a good day, mass migration comes with a raft of issues from social strain to the stress placed on basic services. Now, we are already grappling with these, but in 2023, the biggest concern appears to be the housing situation. Saxton, is labor’s mass migration plan impacting the ability of Australians to find homes?

Saxon Davidson:

Absolutely it is. We released some research just last week that found that the 1.8 million extra migrants that labor plan on bringing in up until 2028 are going to exacerbate the housing shortage. We already knew before the government undertook their migration review that there were going to be shortfalls of 200,000 homes over the next five years, but our research found that the government’s immigration plan will exacerbate it to 250,000 homes.

Alexandra Marshall:

Gee, that’s not going to end well. Well, the excuse given for bringing in so many people in such a short period of time is to fill job vacancies. Now, mass migration looks good on a budget spreadsheet even if it doesn’t feel good on the ground. You write, and I quote, “There are more than 430,000 job vacancies across the country, which is double the pre-COVID era.” Now, even with these figures, this is still one of the lowest unemployment periods in Australian history, and yet politicians are talking this up as some kind of crisis. Do we risk bringing in nearly half a million people in a short period of time into a job market that might be on the edge of collapse? Because businesses are folding across the country.

Saxon Davidson:

It’s not worth it. We have about one in four businesses who are currently experiencing labor shortfalls, and that’s, as you said, about 438,000 job vacancies across the economy. What our analysis has found is that it’s far more effective and far more efficient to fill those job vacancies with Australians already here, specifically because a large amount of the job vacancies are in low skilled labor, we have found that it is far more effective, frugal, and efficient to fill these job vacancies with Australian pensioners, Australian veterans and Australian students. How we can do that is by reducing red tape and tax on these Australians because they face effective marginal tax rates as high as 69% pensioners and veterans and students face the effective marginal tax rate of 79%.

Alexandra Marshall:

Well, the next question would be then is there interest in these communities to fill these roles? Because I think you used another example of our nearby neighbor New Zealand that if the marketplace allows it, potentially we could fill these jobs domestically.

Saxon Davidson:

Yes. We know that there are only about 3% of pensioners work in Australia, and when you compare that to New Zealand, it is about 25% of pensioners at New Zealand work. And why? Because New Zealand don’t tax the combined benefits and income earned of their age pensioners. In Australia an age pensioner will earn $226 a week at a maximum before they face the effective marginal tax rate of 69% because after they earn $226 a week, which is just a day and a half on minimum wage, they have to face 50 cents on the dollar reduced for every dollar over $226 plus the 19% minimum income tax. 69%. This is why only 3% work. We did see the Albanese government try very briefly when they increased it from 150 to 226, but this just has not worked. Since they’ve done that, job vacancies have only reduced by 1.5% and the 3% proportion of pensioners working has remained stagnant.

Alexandra Marshall:

Well, not only that, but getting pensioners to return to the workforce means that they’ll be interacting with the youth of today and hopefully sharing their skills and their experience, which would be a good thing, particularly for Gen Z if that were to happen. But being forced to compete for space and resources is not making anybody happier and polls are showing this, and as our city’s burst at the seams, we appear to be losing more as a society than we gain. Saxton, why isn’t the government prioritizing getting Australians back into work instead of relying on mass migration? Because we are paying for every Australian who is not in the workforce. Surely it’d be more cost-effective in the long run to get us working.

Saxon Davidson:

I think it’s a misunderstanding of the role that immigration has taken in Australian history. Sustainable immigration has always taken a key role in the foundation of Australia as a nation, but we are not living under the populate or perish era like we did post World War II. We have Australians here who want to work, who can work and should be enabled to work. There was a recent survey by national seniors that said 20% of Australian pensioners would work if these tax barriers were immediately eased. However, that’s just not what we’re seeing. 20% of age pensioners is over 80,000 more workers than the job they vacancy [inaudible 00:06:31].

Alexandra Marshall:

Yes, well, having pensioners working means that they’ll have more money too, so it would help to alleviate some of the poverty we’re seeing in the pension [inaudible 00:06:38] class. But you finished, Saxon, by noting that the opposition leader Peter Dutton has joined the IPA’s call to see Australians put at the front of the queue. Have you seen any sign that labor is going to listen to your research or are they determined to continue down this path of mass migration will solve all the problems in the economy?

Saxon Davidson:

At this stage, they look determined to continue their own path. It has been very promising to see opposition leader Peter Dutton and Shadow Immigration Minister Dan Tehan talk about these issues because as we mentioned earlier, 60% of Australians disagree with the federal government on this. However, this isn’t far-reaching enough within the Canberra bubble, so at this stage it looks like the federal labor governments are going to continue to ignore.

Alexandra Marshall:

Well, thank you so much for the research that you do and the work that you were doing down there at the IPA. You wrote an excellent article and a lot of pensioners were reading with interest because they would love to go back to work. Thank you very much for joining us.

Saxon Davidson:

Thank you for having me.

This transcript with Saxon Davidson talking on ADH – The Spectator Australia from 23 June 2023 has been edited for clarity.