Daniel Wild Discussing IPA Research Into Housing Shortages on 3AW Mornings

On June 13, IPA Deputy Executive Director Daniel Wild discussed IPA research into housing shortages on 3AW mornings with Neil Mitchell.

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.

Neil Mitchell:

Now, this issue of housing, there’s a housing crisis. We’ve talked about it on the program, 12 rate rises since May last year, hard for renters. Rents have gone up 14% in the year. The Institute of Public Affairs is a conservative think tank. They’ve done research trying to predict the scale of the housing shortage in Victoria, and it’s significant. Deputy Executive Director at the Institute of Public Affairs, Daniel Wild. Good morning.

Daniel Wild:

Good morning, Neil.

Neil Mitchell:

Thanks for your time. What’s the prediction? What’ll happen?

Daniel Wild:

Well, my pleasure. Look, Neil, the prediction is that over the next five years, Victoria is staring down the barrel of about 62,000 housing shortage and about 250,000 across the nation on the back of the fairly dramatic expansion to migration that the government is planning over the next five years of about 1.8 million new migrants, which is the size of the population of South Australia, or the equivalent to the size of that population coming into Australia over the next five years. So this is a really big issue because we know that there’s a rental problem out there, you’ve just got to go to your local rental inspection, 10 or 20 people deep. Housing affordability is at an all time low. Young Australians can’t get into the market. And the issue here is that the government really has put the cart before the horse in announcing this massive surge to migration without the infrastructure to accommodate it.

Neil Mitchell:

Well, they say it’s beyond their control. None of their announcing, they say it’s beyond their control. So you’re saying we’d be 62,000 houses short in Victoria. How many do we build in Victoria each year?

Daniel Wild:

Oh, look, I don’t have those numbers in front of me at the moment, but all of the data that we’ve got here is from the National Housing Finance and Investment Corporation, which is sort of the peak government body on this issue. And even before the government had announced the migration expansion, they released a report showing that it’d be about 150,000 housing shortage. But the government has ignored these warnings for some time now. So look, this gets back to the fundamental issue of making sure that policy is being coordinated, that we have the infrastructure in place before we’re having these big migration programs being expanded.

Neil Mitchell:

But if they said there was 150,000 shortage coming, then the migrations only had 100,000.

Daniel Wild:

Well, that’s right. It’s made a bad situation worse. And the issue that we have here fundamentally is the supply side constraints on housing as a lot of red tape and tax barriers to building housing and getting what we need. But also what my real concern here is there’s no coordination from within government. What should have been done is they should have had a whole of sector review and saying, right, we need these many schools, these many rows, these many hospitals, these many houses in order to accommodate the expansion to migration. But that’s not being done. And many in the community are quite concerned about this, whether it’s the traffic congestion or the many other issues, getting kids into a local school or local childcare. This is permeating through the community and it’s a real sleeper issue at the moment.

Neil Mitchell:

Do you agree that if we are ready, if all those things are taken care of, migration is a good thing for the country?

Daniel Wild:

Look, it’s a good thing up to a point. It is not the case that more is always better than less. Throughout our history, migration has played a very important role to our economy and to our society. But what we’ve seen over, notwithstanding COVID, but really in the last decade, we’ve had a dramatic expansion to migration. I think it’s gone too far in terms of just how many is proposed to being brought in. And we see that with the economic figures, and this is a really interesting issue. Our headline economic growth has been relatively healthy, two or 3% per year, which is fairly high, but it’s the per capita growth figures that are concerning, which are typically less than 1%.

And what affects the lived experience of the person on the ground, it’s not the headline figures coming out of treasury or the RBA. It’s how much of the share of the pie that you are getting each and every year. So like I say, I think the migration review was a really missed opportunity to address some of these issues.

Neil Mitchell:

So what do we do? What’s the answer from your point of view? Freeze migration?

Daniel Wild:

I don’t know if we necessarily need to freeze migration, although there are many in the community who believe that we might need to do that. I was on with you a few weeks ago discussing this issue and about 60% of those that we surveyed believe that we needed to have a temporary pause to migration until the infrastructure catches up. But what we need to do is make sure we are actually getting the order of these events right.

It’s completely common sense to say we’re going to build the infrastructure first and then look at our population growth figures. Instead, the government is going the wrong way and announcing a massive surge to migration without the infrastructure to accommodate it. I might just make one other quick point, Neil, and this is a point that you’ve been talking about for a long time, which is that the notional reason for the expansion is the job vacancies we have across Australia. And that is a big issue. There’s about 110,000 job vacancies in Victoria, which is double pre COVID. But as you know, we’ve got all of these financial disincentives and red tape on pensioners, veterans, and students. There’s more than enough of those cohort of people that could be in work to fill those vacancies, yet the government has failed to do anything about that. So we just need to be looking closer to home before we look abroad.

Neil Mitchell:

Daniel Wild, thank you. Deputy Executive Director, Institute of Public Affairs.

This transcript with Daniel Wild talking on 3AW from 13 June 2023 has been edited for clarity.