Daniel Wild On National Cabinet’s Failure To Address Housing & Worker Shortages 6PR – 17 August 2023
The Institute of Public Affairs’ Deputy Executive Director Daniel Wild joined Gary Adshead on 6PR Mornings to discuss National Cabinet’s failure to address Australia’s housing and worker shortages.
IPA research, and the federal government’s own figures, show Australia faces a housing shortage of more than 252,000 houses over the next five years and the nation’s worker shortage remains at record highs.
A key driver on the current pressure on Australia’s housing market is the federal government’s unplanned increase to the migration and international student intake, which has pushed rental prices to record highs and absorbed new housing stock.
Further, IPA research has repeatedly found that removing tax and red tape barriers is an effective and low-cost solution to Australia’s worker shortage crisis that will allow willing pensioners, veterans, and students to get the work that best suits them.
To read the IPA’s housing research visit: https://ipa.org.au/publications-ipa/research-papers/mass-migration-induced-housing-shortage
Below is a transcript of the interview.
Now, the IPA, the Institute of Public Affairs, they’re sort of questioning this in terms of how it will work. Let’s go to Daniel Wild, the Deputy Director of the Institute of Public Affairs.
G’day. Good to be with you.
You’re saying this was a missed opportunity, the announcement yesterday. Just explain that.
Yeah. Look, it was a missed opportunity. As you say, there’s a lot of talk about the supply of housing and that’s fair enough to a point.
But they ignored the elephant in the room, which is the demand, which is the massive surge to population underpinned by mass migration. This government has committed to the biggest surge to our population in our nation’s history with 1.5 million migrants over the coming period in addition to a record intake of international students.
Now, we all support migration as a key part of our economic and social fabric, but the issue here is they haven’t planned for this at all. There’s no plan for where they’ll live. Our analysis has suggested that there’s about 250,000 house shortage over the next five years.
So yes, we need to deal with the supply issues, tax, red tape, land release and so forth. But the immediate and pressing matter facing Perth and facing other capital cities across our nation is the dramatic surge to population which, as I say, has not been planned for.
All right. But on the flip side of that, we have got a worker shortage and we do have major issues in and around that. So don’t we need to increase migration to cope with productivity?
You make a great point. We do have a massive worker shortage. There’s around 430,000 job vacancies across our nation and about a quarter of businesses in Perth right now can’t get the workers that they need. What that means is if you’re walking down your local shops, every fourth pub, restaurant, cafe, bar, chemist, butcher that you walk past, they can’t get the workers that they need. So yes, we need to get more skilled workforce in here.
But there is a solution right in front of us, which is that we have pensioners, veterans, students who want to get into the workforce, but they’re not working because of the massive tax and red tape barriers. Just to give you an example, if a pensioner works more than around a day and a half a week, they can lose 69 cents in the dollar. And because they lose their welfare and pension payments, then they have to pay income tax on top of that so only three out of a hundred pensioners here work, that compares to about 25% of pensioners in New Zealand. So let’s get rid of the tax on our pensioners and veterans first and then look at other approaches that we can take.
And, obviously, the federal government tinkered with that, but you don’t think they’ve gone far enough to try and get that gray army up and running.
No, you’re right. They did tinker with it in December of last year. It was a step in the right direction, but the results are in and it hasn’t worked. Our worker shortage is still more than double what it was pre-COVID, so we haven’t seen the worker shortage decline since those reforms were brought in.
Our perspective is very simple. New Zealand has got this right, which is that they don’t tax their pensions in the same way, so pensioners over there don’t lose their welfare payments when they enter the workforce. This is really a win-win. You’ll get more people into work who want to work, by the way, so this is a choice. Many pensioners won’t want to work and that’s perfectly fine. It’s up to them. They won’t be any worse off if they continue with their current circumstances.
But those who do want to work, they’ll earn income, they’ll pay tax. That tax will be reinvested back into the community. They can keep making a contribution to the workforce, which is what many of them want to do, and it won’t put pressure on our infrastructure. That’s the key point here.
All right. I mean, I take your point and I wonder why the government would be holding the line on that. I don’t know whether they think that they can’t go any further for various reasons on encouraging seniors back into workforce, et cetera. But next time we get a federal minister on, we’ll have to ask the question. I appreciate you joining us today.
Daniel Wild there, Deputy Director of the Institute of Public Affairs.
This transcript with Daniel Wild talking on Mornings with Gary Adshead – 6PR from 17 August 2023 has been edited for clarity.