Speaker 1: Each week.
Speaker 2: We love our chats with Leith van Onsalin, chief economists
Speaker 2: at the NB Fund at mb super one of the
Speaker 2: key brains at macrobusiness dot com dot au is where
Speaker 2: we get our economic news each day. An excellent place
Speaker 2: to head and Leith it's on the line. Sorry to
Speaker 2: keep you waiting, made thanks so much.
Speaker 3: I hope you well yeah, okay, look, yeah, I'm fine.
Speaker 2: Thanks, good on you. Housing crisis it continues to be
Speaker 2: a thing here. Obviously didn't affect the election result, but
Speaker 2: we've had population data I saw I think come through
Speaker 2: on Thursday and I think there's a bit of I
Speaker 2: don't want to say it's not fudging of the figures,
Speaker 2: but the government's got lucky here because more people are
Speaker 2: leaving Australia from what I could see.
Speaker 1: Yeah.
Speaker 3: Yeah, So this Trabia Artistics release the official population data
Speaker 3: for the fourth quarter of twenty twenty four and it
Speaker 3: showed that both immigration and population growth continue to ease
Speaker 3: back from their post pandemic extreme levels. So over the year,
Speaker 3: so this is twenty twenty four astray As population grew
Speaker 3: by about four hundred and forty six thousand, So it's
Speaker 3: basically a camera. So we added a camera in one year,
Speaker 3: and that was driven by NED overseas migration of about
Speaker 3: three hundred and forty one thousand. Now this is obviously
Speaker 3: down from about five hundred and fifty odd, so it's
Speaker 3: fallen quite a lot net overseas migration. But just to
Speaker 3: keep it in the perspective, before the pandemic hit, Australia's
Speaker 3: single biggest year for net overseas migration was just under
Speaker 3: three hundred and sixteen thousand in two thousand and eight,
Speaker 3: So three hundred and forty one thousand still very high historically,
Speaker 3: And just to put some numbers around, New South Wales
Speaker 3: and Queensland and New South Wales grew by one hundred
Speaker 3: and eight thousand last year and that was driven almost
Speaker 3: one hundred percent by NED overseas migration of just under
Speaker 3: one hundred and seven thousand. So New South Wales lost
Speaker 3: about twenty eight thousand people to either states, primarily because
Speaker 3: you've got expensive housing up there, and that loss of
Speaker 3: residents to other states basically offset.
Speaker 1: In your netbirth.
Speaker 3: Queensland grew by one hundred and just under one hundred
Speaker 3: and three thousand last year and that was driven by
Speaker 3: nedoseas migration about fifty seven thousand, you received about twenty
Speaker 3: six thousand from other states, and you had net versts
Speaker 3: about twenty thousand, so you know, population growth still remains
Speaker 3: very high, although it is coming down now. This is
Speaker 3: obviously very good news if you're worried about the housing market,
Speaker 3: because if you've got less people coming in, it means
Speaker 3: less pressure on rents and house prices and that sort
Speaker 3: of stuff. And obviously housing's incredibly expensive, both the purchased
Speaker 3: and rent at the moment, so near historical record highs. Now,
Speaker 3: the Federal Budget's forecast the immigration is going to ease
Speaker 3: back to its pre pandemic level by twenty twenty seven,
Speaker 3: and it then forecasts that we're going to have two
Speaker 3: hundred and thirty five thousand then overseas migration for the
Speaker 3: next four decades. Now they'll come out and say, look, look,
Speaker 3: see we've halved immigration.
Speaker 1: But the problem, Luke, is that two.
Speaker 3: Hundred and thirty five thousand projected net overseas migration is
Speaker 3: still incredibly high and it's going to ensure that Australia
Speaker 3: remains in a permanent housing crisis. And we only need
Speaker 3: to look at the last twenty years of data to
Speaker 3: show why that's the case. So Australi's population growth surged
Speaker 3: after the Big Australia Policy came in and twenty years ago,
Speaker 3: and Australia's net overseas migration more than doubled after two
Speaker 3: thousand and five. So in the sixty years following World
Speaker 3: War Two, Australias net overseas migration averaged ninety thousand per year,
Speaker 3: and there's only two of those years in that sixty
Speaker 3: years following World War Two that we exceed one hundred
Speaker 3: and fifty thousand. We didn't exceed it by much. But
Speaker 3: in the last twenty years, and this includes the pandemic,
Speaker 3: Australia's net overseas migrations average two hundred and thirty one thousand,
Speaker 3: So that's one hundred and fifty six percent increase on
Speaker 3: the sixty year average post World War two. And as
Speaker 3: a result, Australia's population has grown by eight point seven
Speaker 3: million people this century, so since the year two thousand,
Speaker 3: that's that's forty six percent growth and that is the
Speaker 3: strongest growth in the advanced world. So this extreme population
Speaker 3: growth is why we have not been able to build
Speaker 3: enough thousing or infrastructure. We've not kept up with demand,
Speaker 3: and as a result, we've got this housing crisis across
Speaker 3: all the major cities and declining libability in our major cities.
Speaker 3: Because I've done enough infrastructure, everything's getting more crush loaded.
Speaker 1: Now.
Speaker 3: The problem is luke the housing shortage. Even though immigration
Speaker 3: is coming down and basing the budget forecast, it's still
Speaker 3: projected to worsen. So recently, Ampchief Economy Shane Oliver estimated
Speaker 3: that Australia's current housing shortages is somewhere between two hundred
Speaker 3: and three hundred thousand homes. And last month, the federal
Speaker 3: government's own advisory council, the National Housing Supply and Affordability Council,
Speaker 3: released their later State of the Housing Report, and it
Speaker 3: forecast that Australia's shortage is going to worsen by another
Speaker 3: seventy nine thousand over the next five years. And what
Speaker 3: they did was they based their population forecast on the
Speaker 3: Treasury's own forecasts. They just basically grabbed the Center for
Speaker 3: Populations forecast, which based on the Budget and inter Generation Report,
Speaker 3: et cetera. And then they worked out what's a realistic
Speaker 3: level of ability and they said we're going to come
Speaker 3: up for seventy nine thousand homes short the next five years,
Speaker 3: So that means our cumulative housing shorge is going to
Speaker 3: increase from where it already is somewhere between two hundred
Speaker 3: and two hundred thousand by another seventy nine thousand. But
Speaker 3: here's a robblue the National has in Supply and Affordability
Speaker 3: councils own and our Sensitivity oalys.
Speaker 1: At the end of the.
Speaker 3: Report, they said that if we cut population growth by
Speaker 3: just fifteen percent, or population growth is fifteen percent less
Speaker 3: than what the government forecasts, instead of having a shortage
Speaker 3: of seventy nine thousand homes over five years, we'd actually
Speaker 3: have a surplus of forty thousand homes.
Speaker 2: That's cutting in by just fifteen percent.
Speaker 3: Fifteen percent, mate, And what that tells you is that
Speaker 3: the primary solution if you want to solve this mess
Speaker 3: is to cut at net overseas migration. Obviously, you bring
Speaker 3: less people in that they need less housing for them.
Speaker 3: But sadly, Luke, the federal government has no genuine intention
Speaker 3: to solve the housing crisis because it wants to keep
Speaker 3: running this Big Australia policy.
Speaker 1: And in fact, the Center.
Speaker 3: For Population's own projections and these are released in decent
Speaker 3: twenty four, so they're you know, as current as we've
Speaker 3: got that's run out of the Australian Treasury.
Speaker 1: They said that we're going to grow the population by thirty.
Speaker 3: And a half million people in the next forty years.
Speaker 3: So put that into perspective, and that follows obviously eight
Speaker 3: point seven million so far this century, but that is
Speaker 3: equivalent to adding another Sydney, Melbourne and Brisbane to the
Speaker 3: current population.
Speaker 1: So think of all the houses.
Speaker 3: And infrastructure and everything that are in Sydney, Melbourne and
Speaker 3: Brisbane right now.
Speaker 1: We'd have to.
Speaker 3: Replicate that in forty years, right, it's not going to happen.
Speaker 3: And it took Australia one hundred and eighty five years
Speaker 3: to reach a population of thirteen point five million in
Speaker 3: nineteen seventy three. We're supposed to add that same amount
Speaker 3: in just forty years. So you know, this just proves
Speaker 3: that the primary solution to the housing crisis is to
Speaker 3: merely cut immigration back to pre two thousand and five
Speaker 3: historical levels that we had the sixty years post World
Speaker 3: War Two. And if we did that, we would be
Speaker 3: able to catch up and supply both housing and infrastructure,
Speaker 3: and we'd have more Liveraboo cities, and i'd i you
Speaker 3: also better economy a universe by better economy and everything
Speaker 3: else that the government says around supply and everything, it's
Speaker 3: all window dressing.
Speaker 1: Yeah.
Speaker 3: The number one solution is to stop adding to the
Speaker 3: problem every year by adding hundreds of thousands of extra
Speaker 3: people that meat house in the infrastructure.
Speaker 1: It's very simple.
Speaker 2: It is very simple. We say that often when you
Speaker 2: and I talk at this time, and you know, we
Speaker 2: did get the hope at the election that perhaps something
Speaker 2: might happen, because it's just a no brainer. And even
Speaker 2: if you go back, if you want to be generous
Speaker 2: and go back to before the pandemic, if if you
Speaker 2: believe supply is the issue, you go back before the pandemic.
Speaker 2: The targets that the government are published now it's one
Speaker 2: point two million homes over five years. I think it
Speaker 2: is they would have to that would have to be
Speaker 2: building homes at a rate we've never built homes in
Speaker 2: the history of Australia. Whilst they say at the same
Speaker 2: time there's a labor shortage and the cost of building
Speaker 2: has gone through the roof, it is a fantasy. Or
Speaker 2: you could cut net overseed's migration by fifteen percent hello, now, mate,
Speaker 2: do we have a do we have a champion or
Speaker 2: a clown?
Speaker 1: This week it's a champion, mate.
Speaker 2: We stand by, stand by. This is very very very
Speaker 2: good news because you know, we like to point out
Speaker 2: the wrongs, but we also like to reward the excellence.
Speaker 2: Who's a champion? Mate?
Speaker 3: Okay, So this week's champion is US energy expert Robert Bryce.
Speaker 3: So he's a US energy expert who's testified before the
Speaker 3: US Congress and then on energy he wrote for the
Speaker 3: Wall Street Journal. And you know, Robert Bryce is visited
Speaker 3: Australia and he's dropped some truth bombs in Australia's net
Speaker 3: zero fantasy, which he described as quote madness and reckless.
Speaker 1: So Bryce told.
Speaker 3: Two GB's own Ben Forden fact that Australia is a
Speaker 3: quote energy superpower, but we act like a quote energy weekly.
Speaker 3: Now he liked me question why Australia exports He says
Speaker 3: seven times more coal than it consumes, yet we are
Speaker 3: blowing up our coal plants.
Speaker 1: A very good question.
Speaker 3: They also questioned why we export many times more gas.
Speaker 3: So it's about four times more gas than we use locally,
Speaker 3: but we deny ourselves access to cheap and abundant gas.
Speaker 3: They also said that Australia's position on nuclear power is
Speaker 3: completely contradictory and that we are logical to say yes
Speaker 3: to net zero and no to nuclear power when Australia
Speaker 3: holds nearly a third of the world's uranium reserves. And
Speaker 3: he likened Australia's energy policy stands to Saudi Arabia refusing
Speaker 3: to use its own oil, and he described us as
Speaker 3: the Saudi Arabia the southern hemisphere, and he said, you know,
Speaker 3: could you imagine a situation whereby the Saudis deny themselves
Speaker 3: the use of their own oil while they export it
Speaker 3: to the rest of the world, which is effectively what
Speaker 3: we're doing with coal and gas. And he also said
Speaker 3: that Australias zero ambitions are futile and won't make any
Speaker 3: difference to the global climate, but are going to come
Speaker 3: at a very high cost to our own residence. So
Speaker 3: he said that Australias emissions have gone down from about
Speaker 3: one and a half percent to one percent of global
Speaker 3: the global total emissions. Meanwhile, China and India have gone
Speaker 3: to about forty percent of the total emissions and their
Speaker 3: emissions of skyrocketing. So he basically said Australia should quote
Speaker 3: stop doing stupid things such as shutting down coal plans prematurely,
Speaker 3: and that our power prices are skyrocking, you know, to
Speaker 3: the detriment of the poor and working class. And of
Speaker 3: course you know everyone knows that these these views obviously
Speaker 3: mirror my own, so that's why I obviously support it.
Speaker 1: But my constant.
Speaker 3: Ramblings are that Australia should give itself cheap and reliable
Speaker 3: energy by book burning more of its coal at home
Speaker 3: and exporting a bit less. Same with gas. And guess what,
Speaker 3: the global clim would be no worse and worse off,
Speaker 3: but we'd have cheap and abut energy. It's just common sense.
Speaker 2: It's just common sense. Great stuff, mate, Stay well. I'm
Speaker 2: happy in a couple of weeks break, but I'll talk
Speaker 2: to you on my return. And thanks for jumping on
Speaker 2: each week. We love your WORKMATEE stay well. Leath than
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