Two countries with increasing immigration, Australia and the US, have dealt with accommodating the new people in the past decade in different ways – both with equally poor results.
In the US, financial institutions were allowed to lend people money to buy dwellings even if they had little prospect of repaying. The result has been the financial meltdown.
In Australia, we had more sensible regulation of the banking system, so not anyone could get a housing loan. Our response was not to release the land or provide more public housing. Rather dwellings were allowed to become less affordable to more people. Construction has not met demand for more than a decade.
The “solution” in Australia has been for homelessness to rise and for more people to live in undesirable dwellings – over-crowded, moving from one place to another and so on.
It has been so easy for the US and Australia to let people in. The immigration increase in US has been proportionately higher in than Australia so the consequences have been more severe.
Between 1925 and 1965 the US averaged 175,000 immigrants a year. That rose to 505,000 a year in the 35 years to 1990 and then rose again to one million a year since 1990, peaking at 1.8 million in 2006.
The proportion of immigrants in Australia’s population growth is at its highest since the Gold Rush — at 59 per cent. Net immigration has been about 200,000 a year for the past four years and rising. It has doubled from the number in the four years before that. In the first quarter of 2008 it rose 71,600 to an annualised rate of 286,000, the highest on record, according to Australian Bureau of Statistics figures issued this week. And we wonder why we have a housing affordability crisis.
And the US wonders why it has had a housing-driven financial crisis.
If Kevin Rudd had told us before the election that under a Labor Government net immigration would rise to a record annualised rate of 286,000 in the Government’s first year, he would not have been elected.
This is not Hansonism or rascism. It does not matter what colour or creed the immigrants are, it is a question of pure numbers. We are not providing proper shelter for the increasing population – immigrant or native. Australia’s population rose by 336,800 in the 12 months to March. That is a city the size of Canberra. At 2.5 people per dwelling that is about 135,000 dwellings a year. Add to that about 40,000 more dwellings to replace dilapidated housing stock and we need about 175,000 new dwellings a year. But we have built about 35,000 fewer dwellings than that in most years in the past half decade.
Small wonder then that we have a housing shortage, high prices, high rents and about 180,000 on public-housing waiting lists. Are we building more public houses to meet this need? No. The number of public dwellings has fallen by 30,000 to 340,000 in the past five years.
The Rudd Government’s National Rental Affordability Scheme is woefully short. It provides $623 million over four years to subsidise 50,000 new “affordable” homes – a pitiful 15 months worth of the shortfall over those four years.
Homelessness and rent strife continue.
As in the US, immigration is a major public policy failure.
We have some grim choices: open up the vast tracts of vacant land on city fringes to urban sprawl and too bad for the environment or agriculture; cram more people in to existing cities and suburbs and too bad for existing residents and strained infrastructure; or (heaven forbid) drastically cut the immigration program.
If we have a skills shortage let’s train the people we have here. In days of cheap transport it is folly to argue there are economies of scale with a large population.
As in the US, only a few people in finance, banking, building and real estate get much benefit from high immigration. The solution for those pressure groups is to build more houses, preferably with all of the infrastructure subsidised by taxpayers. None of them have ever suggested reduced immigration as the obvious solution to the housing affordability crisis. Rather they swamp government with advice to the contrary because they get rich from it. For the rest of us, our resources get strained by high immigration, through high mortgages and rent and poorer environment because of in-fill and urban sprawl.
Rudd has had endless reviews about every aspect of government and public policy, but immigration is excluded. Government does not seem to want to audit its cost, especially the cost to people who have to buy houses at inflated prices, or lease them at inflated rents, or people who have no satisfactory permanent dwelling at all.
Governments seem to think that immigration and the housing and financial crises in the US and Australia are not linked. They are blind.
Imagine, for a moment, all of the work, cost, inquiries, environmental concerns and effort that has gone into the creation of Canberra. Imagine the amount of water and energy consumed in its construction and its continued existence. We are now adding the population of one Canberra a year to Australia’s population without asking whether we are building the infrastructure to cater for it or whether we can afford it.
By all means have an immigration program. By all means help refugees. By all means allow people with skills to come here. But let’s do it with our eyes open and with an understanding of the cost. Let’s not allow the Government to increase immigration willy nilly with some accounting for it.
Even the most pro-immigration proponent must acknowledge there is a limit. I think we have gone past it.