There Is No “You” In Liberal Or Labor…

The Australian Bureau of Statistics says 30% of Australia is now born overseas.

According to Sky News, Australia had 400,000 skilled migrants immigrate in 2022.

This is a concept recently referred to as “quantitative peopling”.

Compared to “quantitative easing” which involves Federal governments buying bonds to push up bond prices and bring down interest rates.

Most immigration to Australia is on the basis of work or study.

In terms of work, the Grattan Institute shows Australia is importing substandard or low-skilled jobs like cooks/chefs or ones that have low demand due to the increase of electric cars (auto mechanics) or will be replaced by AI-like ITC professionals.

In terms of study, it is for university education for jobs that will make them overqualified or will eventually be displaced by AI.

Yet, we have a skills shortage in areas like manufacturing, health and trades (to build accommodation, more on this shortly), because we neglected or made it hard to up-skill our own citizens through overhauling education like TAFE, and the ongoing brain drain.

Nor are we being productive with our existing skills and adding value to products and services.

This means we are not driving up real wage growth and GDP per capita despite having one of the highest casual wages in the world.

This high immigration for both study and jobs obviously means an increased need for housing (either to buy or to rent) as well as the need for increased road and rail transport infrastructure to access it.

This transport infrastructure isn’t being built as quickly as it is needed — have you driven around Adelaide recently?

We simply have a lack of housing for both immigrants and citizens to purchase or rent, in terms of sheer numbers available compared to population size.

The Federal Government has promised to build 1 million houses for the projected 3 million incoming migrants and States are doing no better…

The SA Budget, will increase “the number of public houses from 400 to 564, and stopping the sell-off of a further 580 public housing properties.”

What a joke.

This shortfall in accommodation will increase the need for rental properties and increase both house and rental prices.

As if they were bad enough already.

Current house prices are based on low supply and high demand, not real wage growth and affordability.

We also need labouring skills to build these houses to accommodate the population increase, but they are not skills being imported or trained at home.

Remenber the whole TAFE debarcale.

And because Australia printed so much money during the pandemic, we have the inflation of goods and services.

Housing construction is not immune to this either!

Higher inflation means higher building material costs and combine that with fixed-price construction contracts, it results in the daily reports of construction companies collapsing and going insolvent.

To stop inflation, Philip Lowe via the Reserve Bank of Australia, is increasing interest rates, presumably in part to incentivise people to make savings deposits, instead of spending (so they can buy more in the future).

But high-interest rates for those who have purchased houses make it even harder for them to service their loans — it’s been reported that almost 50% of mortgages are in mortgage stress and 60% of renters in rental stress.

There are really only two options here: let them default or let inflation increase.

If they default, house prices will come down.

More inflation means interest rates will likely need to go up further and make them default eventually.

It’s also reasonable to assume that banks will tighten up lending due to mortgage stress.

And while inflation and interest rates are both high, at least for a period, as consumers we get less bang for our buck.

This means people are unlike to spend outside of basics, especially if they are in debt from the mortgage and rental stress.

In fact, Australia’s household debt to GDP is the fifth highest in the OECD.

The Federal Government has 1,000,000,000,000 of debt and this isn’t including State debts.

There is a savings deposit guarantee of amounts up to $250,000, which disincentivises savings deposits above that amount due to rising interest rates and this may exacerbate banks tightening up lending because they may not have funds if large amounts aren’t guaranteed.

Less lending means less capital for businesses hiring extra staff, which in turn means less productivity and less adding value to products and services (again we are not driving a rise in real wage growth and GDP per capita despite having one of the highest casual employment pay rates in the world.)

Low wage growth combined with inflation, means a decline in real wages — the erosion of your living standards.

Couple that with emerging AI, businesses can get away with not hiring staff.

AI will be able to do a lot of the computer work for them.

If businesses start cutting staff due to AI, as they have been reported they will, they could afford to increase wages for those who still have a job, but increased unemployment will tax the welfare system even more and increase Federal debt.

Our Federal Government has been negligent with its policies and mismanaged the country for decades now.

And who is to blame?

Us.

We collectively voted them in.

Don’t like your situation right now?

Be wise next time you vote at election time.