Skyrocketing immigration is fueling inflation and worsening Australia’s rising interest rates, according to ABC finance guru Alan Kohler.
A record 400,000 migrants have moved to Australia in the past year, with almost 1.5 million expected to arrive in the next five years.
Rapid population growth has led to double-digit increases in house prices in Sydney, Brisbane and Perth since January, with rents in the capital increasing by an average of 16 per cent over the past year.
Despite the concerns of a chorus of experts, Antoine AlbanaisThe government has no intention of reducing immigration.
“Net migration abroad amounts to an annual rate of more than 600,000 people,” Kohler wrote in the New daily.
“How can we expect the Reserve Bank to slow demand when there are half a million more mouths to feed,” he asked.
Despite concerns from a group of experts, Anthony Albanese’s government has no plans to restrict immigration. Mr Albanese is pictured
The annual growth rate of immigration to Australia is currently 2.3 percent. If we add the 29,400 births in the March quarter, population growth rises to 2.8 percent.
There have been only four years when the country’s population growth exceeded 2.5 percent per year in the last 113 years – 1910, 1920, 1950 and 1970.
The level of inbound migration in 2023 “causes a massive, everything-changing shock to the economy, producing a rebound in housing prices, despite the huge increase in interest rates,” Kohler wrote.
The increase in population is leading to stronger economic growth than expected, he said.
Kohler pointed out that GDP and aggregate demand would decline if it were not for population growth of 2.8 percent, meaning interest rates would be maintained, or even reduced, instead of being increased.
Previous Labor governments in the 1970s, 1980s and 1990s cut immigration during cost-of-living crises, which helped contain rising house prices and rents.
But on Tuesday the Reserve Bank raised its policy rate for the 13th time in 18 months, putting it at 4.35 percent, its highest level in 12 years, after a 5.4 percent rise in inflation over the year until September.
ABC finance guru Alan Kohler (pictured) has joined the growing number of experts who have pointed out the fatal flaw in Anthony Albanese’s efforts to reduce inflation and interest rates: huge levels of immigration to Australia.
New Governor Michele Bullock now expects inflation to take longer to moderate, forecasting a return to the 2-3% target at the end of 2025, instead of mid-2025 as predicted last August.
Monthly mortgage repayments in November will be 68 per cent higher than they were in May 2022, when the RBA cash rate was still at a record low of 0.1 per cent.
Yet property prices have soared this year, pricing young people out of real estate, as new migrants with money compete to buy or rent a home.
Treasurer Jim Chalmers has repeatedly suggested the government does not control or set targets on permanent and long-term arrivals, which include skilled migrants and international students.
“It’s not a government policy or a government objective,” he told ABC’s Q+A program in May.
“It’s not a floor or a ceiling, it’s not something that the government determines.”
This is despite a record 400,000 migrants flocking to Australia in just one year, well above Treasury forecasts of 315,000 arrivals in 2023-24.
Dr Chalmers and his department expect 1.5 million migrants to settle in Australia in the five years to June 2027.
An incredible 152,200 people moved to Australia in the three months to March, causing rents in the capital to rise by 16 per cent over the past year.
The Treasurer wrote a doctoral thesis on former Labor Prime Minister Paul Keating in 2004 – called Brawler Statesman – and considers him a hero.
But the Keating government was the last government, outside of a world war, depression or pandemic, to halve immigration numbers, which saw net overseas arrivals rise from 81,669 in 1991 to 51,358 in 1992 and 34,822 in 1993.
A Labor government, led by a staunch advocate of multiculturalism and family reunification, halved immigration levels thirty years ago in just two years, in an era of double-digit unemployment.
This allowed inflation to fall from 6.9 percent in December 1990 to just 0.3 percent in December 1992.