Palme McGuinness: Australia not immune to immigration anxiety, but we have no need to worry

Another interesting article from Australia with some similar issues and some similar optimism (although tatters may be too strong a term for Canada but some may not agree). And Canada would benefit from an independent review or commission to review the objectives and their implementation:

Fashion, ideology and political expedience have left Australia’s immigration system in tatters. Now, finally, we have a solid review of the immigration system, embraced by responsible minister Clare O’Neil. There are still details left to be finessed, but implementing the principles of the Martin Parkinson-led review will be the hard reset our visa system needs.

Not before time. Immigration anxiety is escalating around the world as countries struggle to manage the inflows of refugees and economic migrants keen to share the protection and opportunities of liberal democracy. The European Union is bickering over who should take the migrants that keep coming and who should pay. Italy, an immigration inflow frontier, elected a prime minister tasked with firming its borders. Britain brexited the discussion at great cost to its economy. In the US, migrants walking over the border are bussed around to make a political point. Immigration anxiety has moved more elections than climate anxiety.

Australia, protected by its geography, has been spared much of this. But not all. We have many problems of our own making that feed into what the Transatlantic Council on Migration identifies as the key drivers of immigration anxiety.

Our anxiety in this area, the Council finds, is caused by common factors, including some we’re facing in Australia right here, right now.

One of these is a sudden large flow of immigrants – and Australia is expecting at least 650,000 over two years. Another is the perception that new arrivals will compete with the existing population for scarce resources and opportunities – such as housing, medical care, welfare, and jobs. And then there’s the level of trust in the ability of policymakers to control inflows and deliver successful integration policies. Australia has scraped by, though fissures regularly appear on asylum seeker policy and integration. But our infrastructure, housing and services are groaning at a time when immigration is about to spike.

In the circumstances, we needed the Parkinson review a couple of decades ago. But since we have it now, now will have to do.

The review won’t build the new houses, roads or hospitals we already needed yesterday. But it might just be able to help us agree on how we can become a better nation, with the help of the people that business and the care sector need today.

That is perhaps the most important part of this review. It starts out by stating the purpose of our immigration system. Because, as the review panel writes, “clear objectives are part of the story Australians tell about why the country is taking certain action” and “when that story is lost sight of or stops being told, trust and confidence is weakened”.

The purpose laid out in the review might be expressed in modern language, but goes back to the core principles of what makes nations strong and citizens confident of their collective sovereignty.

The first principle is that immigration should build Australia’s prosperity. This should be a no-brainer, but as usual somehow partisan politics from the left and the right got in the way. So let’s say it straight: bringing in clever people adds bodies, yes, but it also raises the national IQ. Smart people generate ideas, create businesses, or win overseas business for Australian companies, which creates more jobs right here onshore. Keeping an eye on national prosperity doesn’t mean forgoing humanitarian intake (sometimes doing the right thing is just the right thing to do), but it means evaluating the overall effect of the combined intake against one very important objective: that we all benefit. This is why recent migrants are sometimes not wild about untargeted new intakes. They want to know that the country they’ve invested themselves in is going to get richer and better.

The next is enabling fair labour markets. This principle has had some less than savoury incarnations, including the White Australia policy, which limited immigration from non-European countries. Along with a large dollop of racism, the purpose of the Restricted Immigration Act of 1901 was to keep out people who would work for lower wages. It is a considerable improvement that we can now say our immigration system is designed to protect people in our society who need lower paid jobs as a step into the labour market and dispense with the racist excuse.

The review also, refreshingly, prioritises “building a community of Australians”. It recognises the importance of giving migrants the ability to set down roots and become Australian. One of the most corrosive ideas in immigration here and abroad has been the notion that a country is acting in its best interests when it treats migrants who want to stay as temporary, or guest workers. If decency doesn’t tell you people who spend their productive years in a country might find that they and their children have built a life there, not just a career, then international experience can.

Guest worker programs, like the Turkish workers Germany brought in after WWII to rebuild bombed out cities, lead to parallel societies. The children of the guest workers still wanted to stay, but spoke poor German and felt no sense of belonging. Guests don’t, to return to the housing shortage, build new accommodation for themselves and their kin. Terms like “assimilation” have gone out of style, but the review emphasises the importance of “democratic resilience and social cohesion” – a nation in which nationality is a bond is stronger and happier.

Finally, and I have to say I like this as much as the other principles which underpin the review, it puts an Orwellian caveat on all the above: break any of these rules rather than be outright barbarous. Some of the migrants we want, want to be temporary. We have to be OK with that too.

A hard reset to principle and purpose is what our immigration system desperately needs. Like all the best policy work, once it’s clearly articulated it seems just to state the bleeding obvious.

Parnell Palme McGuinness is managing director strategy and policy at strategic communications firm Agenda C. The company was engaged to work for a Liberal Party MP during the federal election. She has also worked for the German Greens.

Source: Australia not immune to immigration anxiety, but we have no need to worry

Australia: Uncapping work hours forged ‘Ponzi scheme’ in student visas

Uncapping student work hours, as the Canadian government recently did, will likely generate further abuse by education agents and immigration consultants:

The Morrison government’s allowing people on student visas to work unlimited hours created a ‘Ponzi scheme’ that was exploited ruthlessly by some education agents, an international education conference was told on 19 April, writes Julie Hare for AFR .

The move also heaped pressure on the Department of Home Affairs, which is trying to process a backlog of one million visas, with the more complicated ones linked to questionable applications being shunted to the back of the queue, said Labor backbencher Julian Hill. Speaking at an international education conference, Hill said it was clear the Morrison government’s decision to uncap work hours was irresponsible because it “distorted student choice and corrupted the market”.

Phil Honeywood, chief executive of the International Education Association of Australia, described the uncapping of work hours as creating a ‘Ponzi scheme’ in student visas. Before the removal of caps, international students were restricted to working 40 hours a fortnight.

Source: Uncapping work hours forged ‘Ponzi scheme’ in student visas

Australia/New Zealand agreement: Citizenship celebration turns sour in record time

Always interesting to see the reactions when a long-standing irritant is resolved, provoking in the smaller country:

For 22 years, media stories regularly bemoaned Kiwis treated as second class citizens across the ditch. This week, the problem finally got resolved, only for coverage to turn to fears of a ‘Great Exodus’ within hours.​

In November last year 1News correspondent Andrew MacFarlane asked Australian home affairs minister Clare O’Neill why her government was treating New Zealanders as “second-class citizens”.

“That’s a really good question and that’s something that’s been bothering me for a long time,” she said.

Her frank concession came after years of reports about the perilous legal status of New Zealanders living long-term across the ditch.

They have been denied disability payments, jobseeker support and student loan services in Australia since the introduction of a 2001 law limiting their pathways to citizenship.

That has resulted in hardship and complaints about unequal treatment.

Back in 2011, Kiwis living in Australia were denied government assistance after being caught up in the Queensland floods.

Stuff story at the time picked up on the plight of Jayde Fuli, who was facing financial ruin due to a lack of assistance from the Australian government.

In 2014, Stuff reported on a sick toddler who was denied healthcare in Australia because his parents were Kiwis, despite him having never set foot in New Zealand.

It also published an investigation on what it called discrimination across the ditch in 2018, highlighting the case of a woman who fell into depression and drug addiction after being unable to access support following the death of her child.

This coverage has been matched in other media, which have consistently called out the Australian government for collecting New Zealanders’ taxes but failing to offer them the same rights as other citizens.

Given that, prime minister Chris Hipkins was probably expecting a glowing reception and a run of good press when he stepped up to a media scrum last weekend to announce a new citizenship pathway for Kiwis living in the lucky country.

“It is a very significant day for the trans-Tasman relationship, a very positive day for the relationship between New Zealand and Australia,” he said.

There was some positive coverage for the move on the front pages of the Weekend Herald, The Press and The Dominion Post.

But as it turns out, putting an end to a 22-year problem only wins you about six hours of good headlines.

By early Saturday afternoon, a less celebratory angle was starting to cut through on the websites of our major news organisations.

Both the Herald and Stuff ran stories about a potential “exodus” of New Zealand workers to Australia following the citizenship change.

Those worries amped up the following day.

The Sunday Star-Times carried two profiles of New Zealanders packing their bags and moving across the ditch.

Its editor Tracy Watkins accompanied those with a stinging editorial about the “big fish hook” in the Australia citizenship deal, which ended: “Will the last one to leave please turn off the lights?”.

On Wednesday TVNZ’s Seven Sharp joined the chorus warning that Australia is stealing our workers, just like they did with our best horse and our sweet treats.

“We’re used to Australia taking things from us: Phar Lapp, pav, Crowded House, and don’t forget lamingtons,” said presenter Jeremy Wells.

“Well it turns out they’re at it again: this time it’s Aussie employers trying to poach hard-working Kiwis,” added Hilary Barry.

That may have been a bit tongue in cheek, and Seven Sharp’s story delivered a useful comparison of the wages and conditions workers can expect in New Zealand and Australia.

In The New Zealand Herald commentator Richard Prebble was less constrained by facts, figures, or indeed reality, writing that New Zealand is “becoming a third-world country”, and Australia is only changing its citizenship rules to “strip this country of our best”.

The overarching theme of the coverage was that getting a better deal in Australia might leave some New Zealanders with little reason to stay here, and the rest of us worse off as a result.

There’s one small problem with that assertion: it doesn’t appear to have much – if any – real data underpinning it.

The economist Shamubeel Eaqub noted emigration to Australia peaked in 2013, and has since dropped off.

Infometrics chief executive Brad Olsen told AM a pathway to citizenship probably won’t be the biggest draw for New Zealanders thinking of heading across the Tasman.

“I don’t know if it moves the dial considerably on Kiwis wanting to move over to Australia. There are already a lot of reasons why people have been considering doing so.” he said.

At the least it’s too early to say whether there is – in Stuff’s words – a Great Exodus underway.

Other commentators criticised the negativity of the coverage.

The media isn’t a behemoth with a unified perspective, but politicians and news audiences could be tempted to feel like they’ve been the victim of a bait and switch after seeing 20 years of stories highlighting a pressing human rights issue, only to immediately see lines like about the government being “played like a didgeridoo” when it gets resolved.

At Newstalk ZB, afternoon host Heather du Plessis said she couldn’t get behind the backlash.

“There are a bunch of commentators who are seeing negative in Australia’s immigration announcement. I totally disagree with them. This is one of the most positive and significant changes for New Zealand in the ANZAC relationship. I don’t believe it’s going to lead to a significant brain drain. That brain drain’s already happening,” she said.

In The Guardian, commentator and former Stuff political reporter Henry Cooke took aim at those trying to paint the deal as a bad thing, saying their arguments “do New Zealand a disservice”.

He said people should focus on making New Zealand better for workers, rather than making sure Australia is worse.

“The answer to this challenge shouldn’t be just trying to build the walls up higher or guilt Kiwis into staying. It should be making New Zealand as good a place to live as Australia with comparable (or better) incomes and working conditions,” he wrote.

Cooke noted that Australia consistently pays out a higher proportion of its GDP in wages.

Figures produced by AUT's 2023 survey on trust in media.

Figures produced by AUT’s 2023 survey on trust in media. Photo: AUT

But analysis of why that is – and how to put New Zealand on par – has been limited, and the media bemoaning the trans-Tasman wage discrepancy might have done more to look at what’s actually behind it.

For instance, Australia has better productivity than New Zealand’s, lower taxes on low and middle income workers, a higher minimum wage, and a longstanding Modern Awards System similar to the Fair Pay Agreements legislation recently introduced here.

A deep dive into those topics might have been more useful than articles on whether we got played by making sure sick and otherwise out-of-luck New Zealanders can access support from the Australian government.

Maybe the quick turn toward pessimism was predictable.

Negativity bias in the news is an extensively studied phenomenon.

It’s pervasive, and not only in stories on Australian citizenship. For instance, this story isn’t focusing on the hundreds of worthy and informative stories published by the New Zealand media this week, and is instead honing in on a criticism of some coverage.

Even if – in the words of one 2001 review paper – “bad is stronger than good”, that bias comes at a cost.

A recent trust in media survey by AUT produced a startling finding: New Zealanders are world-leaders in tuning out the news, with 69 percent of respondents saying they actively avoid it at least some of the time, and just 37 percent of us taking high interest in what’s being reported.

When asked why they were switching off, a common response was that the coverage is depressing and divisive.

The potential for an increase in people moving to Australia is a worthy topic to cover.

New Zealand does have a skills shortage, and workers leaving for greener pastures is a genuine concern.

But this week’s coverage could feel like a little bit of a slap in the face to the New Zealanders who’ve spent more than 20 years living as – in the media’s own words – second class citizens.

Perhaps our news organisations could do a little better at reporting and contextualising how their lives have improved in real terms, rather than just fretting over as-yet unrealised scenarios where their gain might be our loss.

Source: Citizenship celebration turns sour in record time

Australia Seeks to Fix ‘Broken’ Immigration Program After Review

Some aspects also broken in Canada but government loathe to admit:

Australia will change its immigration system after a review found the current model is not fit for purpose, Minister for Home Affairs Clare O’Neil said.

The system was overly-complicated and open to exploitation, the review found, failing to target and retain skilled workers and international students vital to boosting the country’s economic productivity.

Australia’s immigration system was “broken,” O’Neil said in Canberra Thursday. “It is failing our businesses, it is failing migrants themselves and most importantly it is failing Australians,” she said.

Australia will increase the income threshold for temporary skilled migration in July 2023 from A$53,900 ($36,000) to A$70,000 ($46,000), to raise the bar on the types of jobs which justified importing labor. In addition, all temporary skilled migrants would be given a pathway to permanent residency from the end of 2023.

Despite the changes, O’Neil said Australia’s overall immigration levels would not increase as a result of the reforms.

The difficulty of attracting skilled migrants comes as Australia attempts to boost its economic growth and productivity in the wake of the Covid-19 pandemic. With unemployment hovering at 3.5%, there are skilled labor gaps in a range of industries including aged care, health and defense.

More changes are expected in the coming months, O’Neil said, with a full plan to improve the migration system due by the end of 2023. The investor visa class is expected to be reviewed, the minister said, with concerns it has been used in the past to buy a ticket into Australian residency.

Source: Australia Seeks to Fix ‘Broken’ Immigration Program After Review

New Zealand shouldn’t be afraid of ‘brain drain’ after Australian citizenship deal

Of interest, some similar but different dynamics between USA and Canada although restrictive immigration policies in USA are shifting somewhat the patterns in tech:

For a very long time, the concept of New Zealand and Australia as meaningfully different nations did not make much sense. The Tasman Sea was awash with two-way traffic in the 19th century, when we were outposts of the same empire, with ideas and people floating between the two countries freely. Australia’s 1900/01 constitution famously retains an option for New Zealand to join its federation of states. The two countries did not send proper diplomatic missions to each other’s capitals until 1943, and did not create separate “citizenships” until 1948.

In the decades since we have established ourselves as properly different countries, albeit ones that are extremely closely linked, with over half a million New Zealand citizens living in Australia. Over the weekend those links got even closer, as prime ministers Chris Hipkins and Anthony Albanese announced a huge change to the way New Zealanders can get citizenship, which has been far more difficult since 2001.

Kiwis living in Australia will soon be eligible to apply for citizenship after four years of living in the country, with all their children born since mid-2022 in the country automatically made citizens. This replaces a cumbersome and expensive system by which New Zealanders who had lived in Australia for years had to apply to become permanent residents of Australia first, despite already being de facto permanent residents anyway.

This is a major win for Hipkins and New Zealand. It brings Australia’s system into line with New Zealand’s and will make many New Zealanders lives measurably better, as they are able to access social services for themselves and their children in the country they have moved to. Even NZ First leader Winston Peters, who publicly decries the Labour government as “dishonest” separatists, acknowledged that the deal was a victory.

But before long an old obsession was trotted out to attack the deal: the “brain drain”. Australia is not just a richer country than New Zealand, it is one that distributes those riches differently, consistently paying workers a higher proportion of GDP. Would this not, asked several prominent economists, just send more Kiwis over the ditch for higher wages, contributing to existing skills shortages? One editor even suggested the government may have been “played” by those cunning Australians.

These arguments do New Zealand a disservice.

For one, there is scant evidence that this will meaningfully contribute to more people crossing the ditch. Between late-2003 and late-2022, 778,000 Kiwis migrated to Australia from New Zealand, suggesting that the tougher path to citizenship John Howard introduced in 2001 didn’t really stop many. If you’re the kind of young person who typically did make that move, the prospect of citizenship after four years is hard to see as much of a pull factor – over and above more immediate benefits like higher pay, better working conditions, and that half of your friends are doing the same. It could keep some Kiwis in Australia longer, sure, but anyone who is happy to become a citizen of Australia is likely a lost cause for us anyway.

Source: New Zealand shouldn’t be afraid of ‘brain drain’ after Australian citizenship deal

Faine: I’m getting intolerant of tolerance

Good commentary from Australia’s Jon Faine:

It is time to retire the T word from the vocabulary of multiculturalism. I do not want anyone to say that they “tolerate” me. It is patronising and condescending.

Tolerance denotes a reluctant acceptance, a begrudging recognition of something unpleasant that will not go away. Why be so negative about one of the greatest assets we have – our diversity?

Smilingly encouraging “tolerance” for those who used to be described as “New Australians” is actually a backhander, a well-meaning but confused commentary on our almost universally shared commitment to social cohesion.

It is usually invoked by established figures comfortable about their place in our nation, but uttered rarely by anyone insecure or struggling.

I flinch when I hear it, whether from the lips of a government minister, a faith leader or various commentators who regularly pepper it through their offerings.

We live in one of the most socially cohesive, peaceful, multicultural societies on the globe. Although we can and must do better, let us be frank about our successes.

We speak nearly 300 different languages, according to Victorian Multicultural Commission data, and claim almost every known ancestry and every imaginable variation on the human race. More than 25 per cent of Australians are born overseas, and about 50 per cent of us have at least one of our parents born overseas.

Schools, workplaces, marriages, friendships and public and private enterprises are more diverse than ever before. Belatedly, we are beginning to validate and celebrate the unique culture of our First Nations communities and at last have adopted militancy in tackling the entrenched racism to which they have and continue to be exposed.

Australia without generations of migrants and their cultural contribution is unimaginable. But it is also a historical truth that many migrant communities, once established and settled, express reservations about the next wave.

Instead of feeling affinity or empathy, they question their legitimacy — dubbed the “drawbridge” phenomenon. Once a new arrival becomes established and secure, the “drawbridge” is lifted to prevent others from enjoying the same benefits.

It would be nonsense to try to argue that contemporary Australia is the mythical fairytale melting pot, that we all sit around together harmonising Kumbaya. It is equally wrong to portray Australia as a hotbed of racial or ethnic strife.

Last month, a handful of neo-Nazis performed on the steps of Victoria’s Parliament House, scoring the attention they craved along with their goal of saturation media coverage.

Reassuringly, their parade was swiftly condemned by almost all community leaders. Zero tolerance was confirmed at nearly every level. This is how standards are set.

Choosing to turn a blind eye or to stay silent about overt racism is in effect to support it. Saying nothing signifies everything. Not condemning is assisting – the nod, a sly wink, a slight hint of approval is oxygen to racists and assists their recruiting.

The annual monitor from the authoritative Scanlon Foundation, which researches social cohesion and helps migrants transition to Australia, notes a recent change in the value we place on migration. Since the foundation began more than 20 years ago, it has measured and tracked consistent support for immigration as a source of strength for our culture and economy.

That steady support over many years has stalled during the pandemic. Suddenly, our sense of national belonging has declined, according to the foundation, although local belonging has improved. Lockdown and isolation achieved something.

At the same time – and surely, related – fewer Australians think we are still a land of equal opportunity, both economic and social.

It ought not surprise that in times of financial stress, multiculturalism is vulnerable. Growing economic inequality exacerbates social inequality which puts stress on social cohesion.

Fear of “the other” is driving repression and racial tension all over the world, as it has throughout history. Although we have a continent to ourselves, with no land borders to spark friction, we are not immune.

For many years, I was honoured and humbled to be an Australia Day ambassador and to assist at citizenship ceremonies across the state. There are few more moving moments in public life than to witness first-hand the emotion, excitement and sincerity with which new citizens pledge allegiance to their adopted home. I recommend it as a tonic for even the most hardened of hearts and jaded of souls.

Many of us take for granted what for others is a profound privilege, the priceless reward for unimaginable hardship and struggle.

Immigration and diversity add strength to our society and counter the ossification and stagnation that impacts many countries that turn their back on the fresh ideas and energy that comes with welcoming new arrivals.

We must repel the efforts of those who try to exploit and inflame community tensions instead of resolving them, who see an opportunity for power or profit by poking a stick into an ants’ nest, and then wondering aloud why the ants have become so agitated.

Jon Faine is a regular columnist and former ABC Radio Melbourne broadcaster. He is a Vice Chancellor’s Fellow at the University of Melbourne.

Australia unveils direct pathway to citizenship for New Zealanders

Of note (longstanding issue):

Australia announced on Saturday a direct pathway to citizenship for New Zealanders living in the country, reversing controversial visa rules a day before a visit by New Zealand Prime Minister Chris Hipkins.

Hipkins, set to visit Queensland state’s capital Brisbane on Sunday, hailed the move as “the biggest improvement in the rights of New Zealanders living in Australia in a generation”.

The changes, effective from July, meant New Zealand citizens living in Australia for four years or more could apply for citizenship without having to become permanent residents first, Australian Prime Minister Anthony Albanese said in a statement.

“We know that many New Zealanders are here on a Special Category Visa while raising families, working and building their lives in Australia. So I am proud to offer the benefits that citizenship provides,” Albanese added.

New Zealand has long campaigned for changes since visa rules were altered in 2001, making it tougher for Kiwis in Australia to get citizenship.

The reform would bring New Zealanders’ rights more into line with those of Australian expats living in New Zealand, Australia’s Labor government said.

“Kiwis taking up Australian citizenship will still retain their New Zealand citizenship. These dual citizens are not lost to New Zealand – but draw us closer together,” Hipkins said in a statement.

The changes also meant children born in Australia since July to an Australia-based New Zealand parent would be automatically entitled to Australian citizenship, he said.

“This will make critical services available to them,” he said, adding the changes delivered on an Albanese promise that no New Zealander be left “permanently temporary” in Australia.

Around 670,000 New Zealand citizens live in Australia, while there are around 70,000 Australians in New Zealand, according to Australia’s Department of Foreign Affairs and Trade.

Australia’s Home Affairs Minister Clare O’Neil ruled out the changes being extended to other migrant groups, saying it was a “special arrangement with New Zealand”.

The reform was about ensuring the “strong friendship we have is reflected properly in law”, she told ABC television.

Source: Australia unveils direct pathway to citizenship for New Zealanders

Record immigration, nowhere to live. Welcome to Australia’s rent crisis

Sounds familiar:

For Meg Edwards, it was $30 that sealed the deal.

The 20-year-old international relations student and her two housemates were struggling to find a home in Melbourne’s hypercompetitive, inner-city rental market, having inspected close to two dozen properties over the course of a couple of months.

“It was getting pretty stressful,” Edwards tells AFR Weekend. “There’s one place where we were calling the agent every day to make it really clear that we were interested.”

The real estate agent for the three-bedroom terrace house in North Melbourne told the trio they would need to offer more than the advertised $770 price if they wanted to stand out from the other 25 applicants and have a chance of securing the property.

“So we did end up doing that, and we did end up getting it,” Edwards says, with the group offering $800 per week for the home. “Obviously, we were pretty lucky to be able to do that. But not everyone can.”

What happened to Edwards and her friends was a clear breach of Victoria’s tough rental-bidding laws, which state higher offers cannot be solicited by an agent. Unfortunately, with Australia in the grip of what experts say is a rental crisis, what happened to the group is not likely a one-off.

Advertised rents have galloped 10 per cent higher in the past 12 months, research house CoreLogic says, and that adds to the cost-of-living pressures households already grapple with, such as soaring energy bills and grocery prices.

Worse, moving to a cheaper rental isn’t an easy alternative. Finding a place to live is harder now than at any time in at least two decades, with just 1.1 per cent of the nation’s stock of rental properties available for lease.

The country’s rental market is clearly out of balance, says Brendan Coates, the Grattan Institute’s economic policy program director.

“The rule of thumb vacancy rate for a healthy rental market – one where renters can find somewhere to live that suits their preferences and budget in a reasonable time frame – is around 3 per cent,” Coates tells AFR Weekend.

The situation is even worse in smaller capital cities such as Adelaide and Perth, where fewer than 1 in every 200 rental properties were vacant in February.

But the crisis facing renters, with few vacancies and rapidly rising prices, didn’t arise overnight. It’s the inevitable consequence of what happens when high, and rising, demand collides with limited supply. That, in turn, is the result of decades of policy failure and inaction across all levels of government. It took the pandemic, with its resulting inflation outbreak and flood of immigration, to bring it to a head.

It’s a problem being felt around the world. But in this country it is happening alongside forecasts for chronic underbuilding, property prices that have increased so rapidly that an entire generation of Australians believe home ownership is out of reach, and a system that treats property as just another asset class, favouring landlords at the expense of renters.

Finding a way out of this big squeeze won’t be easy.

Immigration and the ‘race for space’

On the demand side, Coates says a shift toward living in smaller households has contributed to the extraordinary tightness in rental markets.

“In a hybrid work world, people want more space to themselves and to live in smaller households. This means for a given number of renters, we need more rentals to go around,” he tells AFR Weekend.

The average number of people living in a household fell to 2.55 in 2021 from 2.59 in 2016, analysis of census data by real estate analysts at PropTrack shows. That means 160,000 more dwellings are required to meet the housing needs of the population.

“The ‘race for space’ started during COVID-19 and had a more subdued effect because borders were closed and there were no arrivals,” Coates says. “Now that migration has come roaring back, we have both more people and each person wanting more space.”

Treasury forecasts an influx of 650,000 migrants between this financial year and the next, as the reopening of Australia’s borders prompts the return of international students, working holidaymakers and skilled migrants, who are in high demand thanks to a chronic shortage of workers.

Coates says the migration boom contributes to the dwindling availability of rentals, as migrants compete with locals to snap up a shrinking number of homes for lease. “The more people there are, the more houses we need. And we are adding people a lot faster than we are adding houses,” he says.

Centre for Independent Studies chief economist Peter Tulip says the federal government has an obligation to help fix the problem of inadequate housing supply given it is responsible for the immigration program. “Canberra needs to ensure that new migrants have somewhere to live,” the former RBA researcher tells AFR Weekend.

The migration surge is bad news for renters in Sydney and Melbourne, where property markets are expected to bear a disproportionate share of the burden of the influx, given their popularity with international students.

Compounding the problem is that the boom comes as the construction industry is scaling back its plans to build more homes, burnt by rising interest rates and soaring material costs that have pushed a raft of builders into bankruptcy.

It means Australia will fall short of its housing needs between 2023 and 2027 by 106,300 dwellings, a report released on Monday by the government-run National Housing Finance and Investment Corporation said.

The rise of NIMBYism

A major handbrake on new housing supply has been the influence of existing homeowners who object to new developments in their communities. Known as NIMBYs (Not In My Backyard), their power is derived from their sheer number.

Twice as many Australians own property than rent – about a third of households own outright, and another third are paying off a mortgage – and to much of that cohort nearby development equates to putting their lifestyle and the value of their property at risk.

As such, the path of least resistance for politicians is to accommodate the will of a homeowning class through tough planning laws that restrict medium- and higher-density construction.

Limiting what can get built and where it’s built restricts the supply of new homes, making life harder for renters and prospective first home buyers by driving up rents and house prices. The problem is most evident in wealthy areas, where demand for new housing is high but very little is being built.

Councils in Sydney’s affluent eastern suburbs and lower north shore were the city’s most anti-development local government areas, CIS’ Tulip’s research showed last month. While the research only looked at Sydney, the findings would almost certainly translate to other housing markets.

Tulip found that council areas like Woollahra, Hunters Hill and Mosman built almost no new homes over the past few years. Between 2016 and 2021, Woollahra council built just 61 homes a year, while Hunters Hill – the smallest council area in Sydney – gained 12 homes annually on average and Mosman built 33 homes a year. The figures equate to tepid 0.2 per cent annual growth in the dwelling stock in each of the three harbourside locales.

Tulip found that most building took place in Sydney’s western suburbs, even though demand for housing was highest in the city’s inner and eastern suburbs.

While some planners argue that NIMBYs are not important since technical panels – not residents – make planning decisions, Tulip says it’s more complex. “The panels are guided by parameters set by politicians. And the politicians set restrictive parameters because they perceive their voters would object to new housing,” he says. “So the implication of this claim that public opinion is not driving planning decisions is false.”

Concerns about higher density developments harming neighbourhood character, which drives opposition to new homes from residents, are misplaced, Tulip says.

“There are lots of stories of people who opposed developments before they were built who then change their mind after seeing the final outcome,” he adds. “In particular, they like the new shops, restaurants and transport services that accompany higher density.”

In Sydney suburbs dominated by high-rise, such as Chatswood, Green Square and Liverpool, Tulip says house prices didn’t fall when development increased, in a sign that the lift in density had no effect on amenity. “I suspect that NIMBY opposition is just fear of the unknown,” Tulip says.

No silver bullet

Because the problem with the housing market stems in part from government policy, relief for renters can only come from government intervention. In the short-term Coates says the immediate priority for the federal government should be to increase rent assistance, which is a supplementary payment made to people on welfare who are also renting.

“Rent assistance works,” Coates says. “In 2021, it reduced housing stress levels for recipients nationwide from 72 per cent to 46 per cent.

“But the maximum rate of rent assistance hasn’t kept pace with the rising rents paid by low-income renters.”

For a single, the maximum fortnightly payment is $157.20, or just $79 per week, and research by economists at AHURI found that over one-third of recipients were still in rental stress after the payment was considered.

Rent assistance was already too low, even before the latest rental squeeze, says Australian National University associate professor Ben Phillips.

“Over the longer term we know that low-income renters are increasingly struggling and for that rent assistance is one part of the answer while the other part is some rebuilding of public housing and encouraging other forms of social housing and rental investment in lower cost housing options,” Phillips says.

A 40 per cent increase in rent assistance would cost the federal government about $2 billion, the Grattan Institute says, but it would go straight towards easing the cost of living for those struggling the most in the private rental market.

One way to pay for the increase would be to make the payment better targeted, with the Australian Housing and Urban Research Institute estimating that 419,000 renters on moderate incomes receive rent assistance, while some renters on low income are missing out.

In a report last year, the Productivity Commission said an increase in rent assistance should be a priority, citing the fact the value of the payment had declined over time relative to rents, while urging the federal government to make the support better targeted.

Coates says there is also a case for state governments to lift the rate of land tax applying to short-stay accommodation platforms like Airbnb to encourage owners to return the properties to the rental market.

“That would come with a cost because fewer Airbnb would mean less regional tourism, and therefore fewer regional jobs. But it would be better than seeing families in regional Australia living in caravan parks, tents and cars.”

He also says state governments should consider expanding “hard leasing”, where the public sector takes out a lease on private rentals and sublets them to vulnerable people. Coates says governments should also buy existing homes and turn them into social housing.

ANU’s Phillips says purchasing existing dwellings would be an easy way for the government to increase the stock of public housing. “This has the advantage of being more timely but also removes the issue of public housing concentrating disadvantage in one small area.”

Build more homes

In the long run, most experts say the only solution is to relax planning laws and build more homes.

“This is the recommendation of a succession of official reports into housing affordability,” Tulip says, referring to reports by the Productivity Commission and former RBA governor Glenn Stevens. “Those reports, in turn, summarise a mountain of academic research from Australia and overseas.“

Tulip says governments need to set and enforce high housing targets for local councils, while also funding infrastructure that would allay concerns about overcrowding. “This preserves local control over the type and precise location of new construction, without letting local residents restrict the supply, as they otherwise would.”

Coates says the focus needs to be on building both government-owned social housing and market rate homes.

Grattan Institute research found the stock of government-subsidised social housing, which stands at 430,000 dwellings, had barely increased in 20 years even though the population had increased by more than a third.

“The Senate should pass the Housing Australia Future Fund (HAFF) bill so we have a healthy stream of funding to help grow our social housing stock in line with population growth, and the fund should be increased from $10 billion to $20 billion,” Coates says.

The HAFF is one of the Albanese government’s two signature housing initiatives, but it lacks Senate support, with the Greens and Independent Senator David Pocock saying it doesn’t go anywhere near far enough given the scale of the problem.

And Tulip says the $10 billion initiative, designed to fund 6000 social and affordable homes per year, is close to useless. “Thirty-thousand new subsidised dwellings over five years is not much more than a rounding error in a housing market with hundreds of thousands of new households each year,” he says.

Labor’s other major policy – an accord with the states to build 1 million homes over five years – has also been criticised for a lack of ambition and insufficient detail. But despite questions over how it will operate, Coates says the accord has the potential to be a game changer.

“But that will only happen if the Albanese government puts enough money on the table to push state and territory governments to ease land-use planning rules, to enable more housing, including more high-density housing, to be built.”

Tough times

The bad news for renters is that the situation will probably get worse before it gets better. An increasing population, a subdued construction pipeline and inaction by federal and state governments means people who don’t own their own home should brace for more rent rises.

Together with already-high property prices and the likelihood that higher mortgage rates will make it even tougher for new buyers to get into the market, the rental crisis is just a part of a longer-term problem.

Australia’s housing economy, and broader social compact, is based around people owning their home by the time they retire. For many who don’t, paying ever-rising rents with modest super and pensions will be unaffordable.

While Tulip concedes it will be politically difficult to relax planning laws and build more homes, he says there is no alternative.

“It will be difficult to get meaningful improvements in affordability until we see a change in social values,” he says. “As a society, we need to show more concern for renters and future homebuyers and less concern for wealthy busybodies.”

Edwards, who is still settling into her North Melbourne home, says enforcing existing rules around rental bidding would make the market fairer.

“[Bidding] just completely rules some people out, which is just not fair. Because some people can offer more money doesn’t really mean that they’re going to be a better tenant.”

While she only signed a one-year lease, Edwards wouldn’t mind staying longer. But under the rules of Australia’s rental market, the decision won’t be entirely her own.

Source: Record immigration, nowhere to live. Welcome to Australia’s rent crisis

‘Stop the boats’: Sunak’s anti-asylum slogan echoes Australia’s harsh policy

Of note and a cautionary tale of simplistic slogans vs complex realities:

“Stop the boats.” The white-on-red slogan on Rishi Sunak’s podium on Tuesday was – word for word – the slogan used by Tony Abbott to win the Australian prime ministership a decade ago.

To Australian audiences, so much of the rhetoric emerging from the UK over its small boats policy is reminiscent of two decades of a toxic domestic debate.

A succession of Australian prime ministers have led the rhetorical charge against asylum seekers, insisting that their arrival is an issue of “national security” and “border protection”. They are “illegals”, “queue jumpers” and “terrorists”, Australians have been told, while people-smugglers are the “scum of the earth”.

That hostile and militarised language has held a potent place in the Australian political debate for 20 years. And the language is the fundamental basis of the policies that flow from it: of deterrence and forcible turnbacks, of “offshoring” and indefinite detention.

The rhetoric not only allows governments to create for asylum seekers a “hostile environment”, it compels it from them. This too has been copied in the UK straight from the Australian playbook.

Even many of the characters are the same. Alexander Downer, Australia’s former high commissioner to the UK, argued in the Daily Mail on Tuesday in support of immediate deportation and a lifetime ban from Britain for “anyone caught trying to enter Britain by a dangerous ‘irregular route’, such as a Channel crossing in a small boat”.

Downer was a foreign minister in the conservative government of John Howard that first implemented the “Pacific solution” of warehousing refugees on foreign islands.

The Tory strategist Sir Lynton Crosby was the federal director of Howard’s conservative Liberal party, overseeing his four successful election campaigns.

And Crosby’s protege Isaac Levido, later an adviser to Boris Johnson, was deputy campaign director for the Liberal party’s 2019 election campaign, bolstering the premiership of Scott Morrison, who came to prominence as the architect of the adamantine Operation Sovereign Borders, and who famously adorned his prime ministerial office with a trophy of a boat engraved “I stopped these”.

Source: ‘Stop the boats’: Sunak’s anti-asylum slogan echoes Australia’s harsh policy

Australia’s multicultural framework under review after 50 years

Of note and to watch. Given that the review is under a Labour government, likely to incline towards greater diversity, equity and inclusion:

The Australian Government is set to begin a policy review of the 50-year-old ‘A multi-cultural society for the future’ report by Whitlam.

Consultation on the draft terms of reference to ensure they advance a multicultural Australia, support a cohesive and inclusive multicultural society, and harness the talents of all Australians.

“Australia is proudly one of the world’s most vibrant and successful multicultural societies. Widespread community support for multiculturalism is one of our major strengths as a nation,” said Minister Giles, adding that “50 years on from our first multicultural policy it is time to look at Australia’s multiculturalism and make sure we have the settings right. We need to make sure every Australian from a culturally and linguistically diverse background can reach their full potential.”

“Drawing on the knowledge of culturally and linguistically diverse communities, the Review will assess what the Commonwealth needs to do at institutional and policy levels to ensure no one is left behind, and everyone feels as though they truly belong.”

The draft Terms of Reference for the Multicultural Framework Review are now open for public comment and close on 19 March 2023. Find it here.

Source: Australia’s multicultural framework under review after 50 years