WEBVTT - Leith Van Onselen - ‘The Treasury of Common Sense’ 0:00:00.080 --> 0:00:00.480 Each week. 0:00:00.520 --> 0:00:04.359 We love our chats with Leith van Onsalin, chief economists 0:00:04.360 --> 0:00:07.440 at the NB Fund at mb super one of the 0:00:07.520 --> 0:00:10.440 key brains at macrobusiness dot com dot au is where 0:00:10.480 --> 0:00:13.880 we get our economic news each day. An excellent place 0:00:13.920 --> 0:00:16.680 to head and Leith it's on the line. Sorry to 0:00:16.760 --> 0:00:18.160 keep you waiting, made thanks so much. 0:00:18.200 --> 0:00:20.800 I hope you well yeah, okay, look, yeah, I'm fine. 0:00:20.840 --> 0:00:24.360 Thanks, good on you. Housing crisis it continues to be 0:00:24.440 --> 0:00:28.520 a thing here. Obviously didn't affect the election result, but 0:00:28.560 --> 0:00:31.360 we've had population data I saw I think come through 0:00:31.400 --> 0:00:35.519 on Thursday and I think there's a bit of I 0:00:35.560 --> 0:00:37.519 don't want to say it's not fudging of the figures, 0:00:37.560 --> 0:00:40.640 but the government's got lucky here because more people are 0:00:40.720 --> 0:00:42.479 leaving Australia from what I could see. 0:00:43.320 --> 0:00:43.560 Yeah. 0:00:43.600 --> 0:00:47.160 Yeah, So this Trabia Artistics release the official population data 0:00:47.159 --> 0:00:49.199 for the fourth quarter of twenty twenty four and it 0:00:49.280 --> 0:00:53.040 showed that both immigration and population growth continue to ease 0:00:53.120 --> 0:00:57.760 back from their post pandemic extreme levels. So over the year, 0:00:57.960 --> 0:01:00.360 so this is twenty twenty four astray As population grew 0:01:00.400 --> 0:01:03.319 by about four hundred and forty six thousand, So it's 0:01:03.320 --> 0:01:05.759 basically a camera. So we added a camera in one year, 0:01:06.280 --> 0:01:08.600 and that was driven by NED overseas migration of about 0:01:08.800 --> 0:01:12.800 three hundred and forty one thousand. Now this is obviously 0:01:12.840 --> 0:01:16.160 down from about five hundred and fifty odd, so it's 0:01:16.200 --> 0:01:18.720 fallen quite a lot net overseas migration. But just to 0:01:18.800 --> 0:01:22.280 keep it in the perspective, before the pandemic hit, Australia's 0:01:22.360 --> 0:01:25.840 single biggest year for net overseas migration was just under 0:01:25.880 --> 0:01:28.319 three hundred and sixteen thousand in two thousand and eight, 0:01:28.360 --> 0:01:31.520 So three hundred and forty one thousand still very high historically, 0:01:32.319 --> 0:01:34.480 And just to put some numbers around, New South Wales 0:01:34.520 --> 0:01:36.640 and Queensland and New South Wales grew by one hundred 0:01:36.640 --> 0:01:40.520 and eight thousand last year and that was driven almost 0:01:40.560 --> 0:01:43.480 one hundred percent by NED overseas migration of just under 0:01:43.480 --> 0:01:46.880 one hundred and seven thousand. So New South Wales lost 0:01:47.080 --> 0:01:50.240 about twenty eight thousand people to either states, primarily because 0:01:50.240 --> 0:01:54.120 you've got expensive housing up there, and that loss of 0:01:54.200 --> 0:01:56.480 residents to other states basically offset. 0:01:56.080 --> 0:01:56.960 In your netbirth. 0:01:57.880 --> 0:02:00.920 Queensland grew by one hundred and just under one hundred 0:02:00.920 --> 0:02:03.080 and three thousand last year and that was driven by 0:02:03.280 --> 0:02:07.240 nedoseas migration about fifty seven thousand, you received about twenty 0:02:07.240 --> 0:02:09.600 six thousand from other states, and you had net versts 0:02:09.600 --> 0:02:12.880 about twenty thousand, so you know, population growth still remains 0:02:13.000 --> 0:02:15.760 very high, although it is coming down now. This is 0:02:15.800 --> 0:02:18.919 obviously very good news if you're worried about the housing market, 0:02:18.960 --> 0:02:21.440 because if you've got less people coming in, it means 0:02:21.480 --> 0:02:23.880 less pressure on rents and house prices and that sort 0:02:23.880 --> 0:02:28.560 of stuff. And obviously housing's incredibly expensive, both the purchased 0:02:28.560 --> 0:02:33.600 and rent at the moment, so near historical record highs. Now, 0:02:33.960 --> 0:02:36.480 the Federal Budget's forecast the immigration is going to ease 0:02:36.480 --> 0:02:39.480 back to its pre pandemic level by twenty twenty seven, 0:02:39.600 --> 0:02:42.040 and it then forecasts that we're going to have two 0:02:42.080 --> 0:02:44.360 hundred and thirty five thousand then overseas migration for the 0:02:44.400 --> 0:02:47.760 next four decades. Now they'll come out and say, look, look, 0:02:47.840 --> 0:02:48.959 see we've halved immigration. 0:02:49.080 --> 0:02:51.640 But the problem, Luke, is that two. 0:02:51.600 --> 0:02:55.079 Hundred and thirty five thousand projected net overseas migration is 0:02:55.160 --> 0:02:58.440 still incredibly high and it's going to ensure that Australia 0:02:58.520 --> 0:03:00.720 remains in a permanent housing crisis. And we only need 0:03:00.760 --> 0:03:02.880 to look at the last twenty years of data to 0:03:03.040 --> 0:03:07.680 show why that's the case. So Australi's population growth surged 0:03:08.040 --> 0:03:10.680 after the Big Australia Policy came in and twenty years ago, 0:03:11.440 --> 0:03:14.760 and Australia's net overseas migration more than doubled after two 0:03:14.760 --> 0:03:17.440 thousand and five. So in the sixty years following World 0:03:17.440 --> 0:03:22.119 War Two, Australias net overseas migration averaged ninety thousand per year, 0:03:22.560 --> 0:03:24.799 and there's only two of those years in that sixty 0:03:24.880 --> 0:03:27.080 years following World War Two that we exceed one hundred 0:03:27.080 --> 0:03:29.800 and fifty thousand. We didn't exceed it by much. But 0:03:29.840 --> 0:03:32.200 in the last twenty years, and this includes the pandemic, 0:03:32.720 --> 0:03:36.040 Australia's net overseas migrations average two hundred and thirty one thousand, 0:03:36.240 --> 0:03:38.240 So that's one hundred and fifty six percent increase on 0:03:38.280 --> 0:03:40.840 the sixty year average post World War two. And as 0:03:40.840 --> 0:03:43.880 a result, Australia's population has grown by eight point seven 0:03:43.960 --> 0:03:46.880 million people this century, so since the year two thousand, 0:03:47.320 --> 0:03:50.560 that's that's forty six percent growth and that is the 0:03:50.600 --> 0:03:54.960 strongest growth in the advanced world. So this extreme population 0:03:55.080 --> 0:03:57.720 growth is why we have not been able to build 0:03:57.800 --> 0:04:01.520 enough thousing or infrastructure. We've not kept up with demand, 0:04:01.800 --> 0:04:05.920 and as a result, we've got this housing crisis across 0:04:06.200 --> 0:04:09.040 all the major cities and declining libability in our major cities. 0:04:09.040 --> 0:04:11.560 Because I've done enough infrastructure, everything's getting more crush loaded. 0:04:12.080 --> 0:04:12.360 Now. 0:04:12.960 --> 0:04:16.840 The problem is luke the housing shortage. Even though immigration 0:04:16.920 --> 0:04:20.039 is coming down and basing the budget forecast, it's still 0:04:20.040 --> 0:04:25.320 projected to worsen. So recently, Ampchief Economy Shane Oliver estimated 0:04:25.320 --> 0:04:28.359 that Australia's current housing shortages is somewhere between two hundred 0:04:28.400 --> 0:04:32.039 and three hundred thousand homes. And last month, the federal 0:04:32.120 --> 0:04:36.000 government's own advisory council, the National Housing Supply and Affordability Council, 0:04:36.560 --> 0:04:38.760 released their later State of the Housing Report, and it 0:04:39.360 --> 0:04:43.200 forecast that Australia's shortage is going to worsen by another 0:04:43.279 --> 0:04:46.560 seventy nine thousand over the next five years. And what 0:04:46.600 --> 0:04:49.320 they did was they based their population forecast on the 0:04:49.360 --> 0:04:52.719 Treasury's own forecasts. They just basically grabbed the Center for 0:04:52.720 --> 0:04:55.799 Populations forecast, which based on the Budget and inter Generation Report, 0:04:55.800 --> 0:04:59.240 et cetera. And then they worked out what's a realistic 0:04:59.320 --> 0:05:00.880 level of ability and they said we're going to come 0:05:00.920 --> 0:05:04.520 up for seventy nine thousand homes short the next five years, 0:05:04.760 --> 0:05:06.719 So that means our cumulative housing shorge is going to 0:05:06.760 --> 0:05:08.919 increase from where it already is somewhere between two hundred 0:05:08.920 --> 0:05:11.520 and two hundred thousand by another seventy nine thousand. But 0:05:11.560 --> 0:05:14.880 here's a robblue the National has in Supply and Affordability 0:05:15.040 --> 0:05:17.640 councils own and our Sensitivity oalys. 0:05:17.680 --> 0:05:18.120 At the end of the. 0:05:18.160 --> 0:05:21.320 Report, they said that if we cut population growth by 0:05:21.480 --> 0:05:24.360 just fifteen percent, or population growth is fifteen percent less 0:05:24.360 --> 0:05:27.400 than what the government forecasts, instead of having a shortage 0:05:27.400 --> 0:05:29.760 of seventy nine thousand homes over five years, we'd actually 0:05:29.760 --> 0:05:31.640 have a surplus of forty thousand homes. 0:05:31.960 --> 0:05:34.520 That's cutting in by just fifteen percent. 0:05:35.040 --> 0:05:38.240 Fifteen percent, mate, And what that tells you is that 0:05:38.279 --> 0:05:40.919 the primary solution if you want to solve this mess 0:05:41.360 --> 0:05:43.960 is to cut at net overseas migration. Obviously, you bring 0:05:44.000 --> 0:05:46.240 less people in that they need less housing for them. 0:05:47.400 --> 0:05:51.200 But sadly, Luke, the federal government has no genuine intention 0:05:51.320 --> 0:05:53.320 to solve the housing crisis because it wants to keep 0:05:53.360 --> 0:05:54.799 running this Big Australia policy. 0:05:54.880 --> 0:05:57.279 And in fact, the Center. 0:05:56.960 --> 0:06:00.160 For Population's own projections and these are released in decent 0:06:00.000 --> 0:06:02.480 twenty four, so they're you know, as current as we've 0:06:02.480 --> 0:06:04.599 got that's run out of the Australian Treasury. 0:06:05.080 --> 0:06:07.360 They said that we're going to grow the population by thirty. 0:06:07.160 --> 0:06:09.640 And a half million people in the next forty years. 0:06:09.920 --> 0:06:13.600 So put that into perspective, and that follows obviously eight 0:06:13.600 --> 0:06:16.560 point seven million so far this century, but that is 0:06:16.640 --> 0:06:19.599 equivalent to adding another Sydney, Melbourne and Brisbane to the 0:06:19.640 --> 0:06:20.440 current population. 0:06:20.560 --> 0:06:22.240 So think of all the houses. 0:06:21.880 --> 0:06:23.880 And infrastructure and everything that are in Sydney, Melbourne and 0:06:23.880 --> 0:06:24.719 Brisbane right now. 0:06:25.160 --> 0:06:25.720 We'd have to. 0:06:25.680 --> 0:06:28.799 Replicate that in forty years, right, it's not going to happen. 0:06:29.279 --> 0:06:32.239 And it took Australia one hundred and eighty five years 0:06:32.839 --> 0:06:35.160 to reach a population of thirteen point five million in 0:06:35.240 --> 0:06:38.880 nineteen seventy three. We're supposed to add that same amount 0:06:38.920 --> 0:06:42.480 in just forty years. So you know, this just proves 0:06:42.720 --> 0:06:45.560 that the primary solution to the housing crisis is to 0:06:45.640 --> 0:06:48.920 merely cut immigration back to pre two thousand and five 0:06:49.160 --> 0:06:51.719 historical levels that we had the sixty years post World 0:06:51.720 --> 0:06:55.640 War Two. And if we did that, we would be 0:06:55.720 --> 0:06:58.680 able to catch up and supply both housing and infrastructure, 0:06:59.360 --> 0:07:03.359 and we'd have more Liveraboo cities, and i'd i you 0:07:03.360 --> 0:07:06.920 also better economy a universe by better economy and everything 0:07:06.920 --> 0:07:09.080 else that the government says around supply and everything, it's 0:07:09.120 --> 0:07:09.880 all window dressing. 0:07:10.080 --> 0:07:10.240 Yeah. 0:07:10.320 --> 0:07:12.640 The number one solution is to stop adding to the 0:07:12.640 --> 0:07:14.880 problem every year by adding hundreds of thousands of extra 0:07:14.920 --> 0:07:16.400 people that meat house in the infrastructure. 0:07:16.400 --> 0:07:17.120 It's very simple. 0:07:17.400 --> 0:07:20.560 It is very simple. We say that often when you 0:07:20.600 --> 0:07:23.840 and I talk at this time, and you know, we 0:07:23.920 --> 0:07:27.040 did get the hope at the election that perhaps something 0:07:27.120 --> 0:07:30.160 might happen, because it's just a no brainer. And even 0:07:30.160 --> 0:07:31.840 if you go back, if you want to be generous 0:07:31.880 --> 0:07:34.480 and go back to before the pandemic, if if you 0:07:34.560 --> 0:07:38.920 believe supply is the issue, you go back before the pandemic. 0:07:39.000 --> 0:07:43.000 The targets that the government are published now it's one 0:07:43.040 --> 0:07:45.160 point two million homes over five years. I think it 0:07:45.240 --> 0:07:48.080 is they would have to that would have to be 0:07:48.720 --> 0:07:52.240 building homes at a rate we've never built homes in 0:07:52.280 --> 0:07:55.280 the history of Australia. Whilst they say at the same 0:07:55.360 --> 0:07:58.600 time there's a labor shortage and the cost of building 0:07:58.600 --> 0:08:02.640 has gone through the roof, it is a fantasy. Or 0:08:02.680 --> 0:08:07.160 you could cut net overseed's migration by fifteen percent hello, now, mate, 0:08:07.200 --> 0:08:09.480 do we have a do we have a champion or 0:08:09.480 --> 0:08:09.960 a clown? 0:08:10.040 --> 0:08:11.840 This week it's a champion, mate. 0:08:11.880 --> 0:08:19.320 We stand by, stand by. This is very very very 0:08:19.320 --> 0:08:22.559 good news because you know, we like to point out 0:08:22.840 --> 0:08:26.760 the wrongs, but we also like to reward the excellence. 0:08:26.800 --> 0:08:28.160 Who's a champion? Mate? 0:08:28.560 --> 0:08:32.200 Okay, So this week's champion is US energy expert Robert Bryce. 0:08:32.280 --> 0:08:36.079 So he's a US energy expert who's testified before the 0:08:36.160 --> 0:08:38.559 US Congress and then on energy he wrote for the 0:08:38.640 --> 0:08:41.920 Wall Street Journal. And you know, Robert Bryce is visited 0:08:41.960 --> 0:08:44.480 Australia and he's dropped some truth bombs in Australia's net 0:08:44.600 --> 0:08:48.080 zero fantasy, which he described as quote madness and reckless. 0:08:48.160 --> 0:08:49.600 So Bryce told. 0:08:49.640 --> 0:08:53.080 Two GB's own Ben Forden fact that Australia is a 0:08:53.200 --> 0:08:56.720 quote energy superpower, but we act like a quote energy weekly. 0:08:56.960 --> 0:09:01.839 Now he liked me question why Australia exports He says 0:09:01.840 --> 0:09:05.160 seven times more coal than it consumes, yet we are 0:09:05.160 --> 0:09:06.600 blowing up our coal plants. 0:09:06.640 --> 0:09:07.480 A very good question. 0:09:07.960 --> 0:09:11.320 They also questioned why we export many times more gas. 0:09:11.520 --> 0:09:14.760 So it's about four times more gas than we use locally, 0:09:14.920 --> 0:09:18.320 but we deny ourselves access to cheap and abundant gas. 0:09:18.720 --> 0:09:21.720 They also said that Australia's position on nuclear power is 0:09:21.760 --> 0:09:25.400 completely contradictory and that we are logical to say yes 0:09:25.440 --> 0:09:28.320 to net zero and no to nuclear power when Australia 0:09:28.320 --> 0:09:31.480 holds nearly a third of the world's uranium reserves. And 0:09:31.480 --> 0:09:35.480 he likened Australia's energy policy stands to Saudi Arabia refusing 0:09:35.520 --> 0:09:37.600 to use its own oil, and he described us as 0:09:37.640 --> 0:09:40.679 the Saudi Arabia the southern hemisphere, and he said, you know, 0:09:40.960 --> 0:09:44.400 could you imagine a situation whereby the Saudis deny themselves 0:09:44.440 --> 0:09:46.280 the use of their own oil while they export it 0:09:46.320 --> 0:09:48.400 to the rest of the world, which is effectively what 0:09:48.440 --> 0:09:52.360 we're doing with coal and gas. And he also said 0:09:52.400 --> 0:09:55.200 that Australias zero ambitions are futile and won't make any 0:09:55.240 --> 0:09:57.720 difference to the global climate, but are going to come 0:09:57.760 --> 0:09:59.719 at a very high cost to our own residence. So 0:09:59.720 --> 0:10:01.959 he said that Australias emissions have gone down from about 0:10:01.960 --> 0:10:04.880 one and a half percent to one percent of global 0:10:05.160 --> 0:10:08.920 the global total emissions. Meanwhile, China and India have gone 0:10:08.960 --> 0:10:10.880 to about forty percent of the total emissions and their 0:10:10.920 --> 0:10:15.240 emissions of skyrocketing. So he basically said Australia should quote 0:10:15.280 --> 0:10:19.040 stop doing stupid things such as shutting down coal plans prematurely, 0:10:19.760 --> 0:10:23.240 and that our power prices are skyrocking, you know, to 0:10:23.320 --> 0:10:26.480 the detriment of the poor and working class. And of 0:10:26.480 --> 0:10:30.160 course you know everyone knows that these these views obviously 0:10:30.160 --> 0:10:32.920 mirror my own, so that's why I obviously support it. 0:10:32.960 --> 0:10:35.080 But my constant. 0:10:36.040 --> 0:10:38.760 Ramblings are that Australia should give itself cheap and reliable 0:10:38.880 --> 0:10:41.680 energy by book burning more of its coal at home 0:10:41.760 --> 0:10:45.440 and exporting a bit less. Same with gas. And guess what, 0:10:45.480 --> 0:10:48.680 the global clim would be no worse and worse off, 0:10:48.679 --> 0:10:51.319 but we'd have cheap and abut energy. It's just common sense. 0:10:51.400 --> 0:10:54.760 It's just common sense. Great stuff, mate, Stay well. I'm 0:10:54.760 --> 0:10:56.600 happy in a couple of weeks break, but I'll talk 0:10:56.600 --> 0:11:00.440 to you on my return. And thanks for jumping on 0:11:00.480 --> 0:11:03.120 each week. We love your WORKMATEE stay well. 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