Australia faces a “perpetual” infrastructure backlog and deteriorating living standards unless “obscene and unsustainable” migration figures are quickly reduced, an economist has warned.
Leith Van Onselen, chief economist and co-founder of MacroBusiness, painted a bleak picture for the future as record numbers of migrants move to Australia.
In the year to March, net overseas migration was recorded at 510,000 people, bringing Australia’s total population to 27.1 million.
Population growth has already led to skyrocketing house prices and the longest period of decline in GDP per capita on record.
Mr Van Onselen warned it was crucial for the Australian government to take appropriate steps to reduce immigration “immediately”.
“All these people need somewhere to live and we haven’t been able to build enough housing for them,” he told ABC Radio Brisbane on Sunday.
“We have not been able to build enough infrastructure and as a result we have a housing crisis and congestion everywhere.”
Mr Van Onselen said the population was growing too fast and contributing significantly to the cost of living crisis by driving up housing prices, both for real estate and rents.
“When you import tenants, you need rental housing and we don’t have enough of it,” he said.
Economist Leith Van Onselen warned it was crucial for the Australian government to take appropriate steps to reduce immigration “immediately” (pictured, Anthony Albanese)
An economist has warned that Australia will face a “perpetual” housing crisis if high immigration figures are not curbed
“The whole idea that they (the government) are reducing migration is ridiculous.”
“Unfortunately, we opted for a high volume and inferior quality of workers, mostly unskilled,” he said.
Labour has already exceeded its migration target for the last financial year, according to an analysis of migration patterns by parliamentary term.
The net migration intake between July 2023 and May 2024 was 445,510, a figure that is well above the 395,000 that the Labour Party pledged in the May Budget.
Premier Anthony Albanese promised earlier this year that Australia’s net overseas income would fall to just 250,000 by 2024-25, but the latest figures suggest it would be well above that figure.
The influx of international students in particular, and the universities that benefit from it, are failing to provide enough accommodation, forcing newcomers to compete with locals for scarce rental housing, causing prices to skyrocket.
International students make up a large portion of Australia’s long-term and permanent enrolment. Education Minister Jason Clare last month announced a cap of 270,000 foreigners coming to study here by 2025.
“Migration is much more intense than the federal government ever projected and has been since the Albanese government took power,” Van Onselen said.
“It must be reduced immediately. It is at levels that are absolutely obscene and unsustainable.
“We need to manage immigration at a level below the country’s capacity to build housing and infrastructure because if we don’t, we’re going to have lower standards of living, a perpetual housing crisis and a perpetual infrastructure shortage.”
The economist said the government should try to reduce immigration to less than 120,000 a year.