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