Treasurer Jim Chalmers says Australia’s migration intake has fallen sharply from its peak while housing construction is beginning to recover, rejecting the Coalition’s argument that a much lower migration ceiling is needed to bring population growth and new housing supply back into balance.
Chalmers said net overseas migration had fallen 45 per cent from its peak and was expected to decline further over the next two years, as the government also works to increase the number of homes being built.
“We’re making progress getting net overseas migration down. We’re making progress when it comes to the housing market as well. Those two things are really important,” Chalmers told RN Breakfast.
His comments came as Shadow Housing Minister Andrew Bragg prepared to argue for net overseas migration to average below 180,000 a year over four years, linking the proposal to the number of new homes Australia can build.
Asked whether such a policy made economic sense, Chalmers pointed instead to changes in both migration and housing construction since Labor took office.
“On migration, we’ve seen net overseas migration come down 45 per cent from its peak and we expect it to go down further over the course of the next year or two,” he said.
“How that relates to the housing market is when we came to office, dwelling completions and commencements were going backwards and now they’re growing.”
The exchange comes amid an intensifying argument over the relationship between migration, housing supply and affordability, with both major parties under pressure to explain how population growth can be accommodated when Australia is struggling to build enough homes.
Chalmers also acknowledged that Australia’s building regulations are adding complexity and costs to housing construction, saying the government was already working with states and the industry to simplify the National Construction Code.
“He’s a bit late to the party on this. We’ve been very clear that the Code’s too hard to navigate and it’s too costly,” Chalmers said when asked about Bragg’s proposal to reduce a Building Code of more than 2,000 pages to about 80.
“We’re making it easier and faster to build by pausing the Code and working with the states and with the industry to streamline it.”
Chalmers said Housing Minister Clare O’Neil had held about 30 consultation sessions with the industry over the past year and draft proposals had already been released.
“We released some draft proposals earlier this year to do that, we’re going to present a final plan to building ministers later this year,” he said.
Chalmers said migration had been “absolutely galloping” when Labor took office and repeated that net overseas migration was now 45 per cent below its peak
“That will streamline the Code, reduce variations, improve where the provisions are too complicated, make the Code relevant in an age of AI.”
The comments add another dimension to the debate over whether technology can substantially reduce Australian housing costs.
Research published in the seventeenth report of The Balance Sheet series estimates physical construction represents about $33 of every $100 spent on an indicative new house-and-land package, compared with $38 for land and $29 for taxes, infrastructure charges, development finance, margins and professional costs.
The report argues that technologies including robotic bricklaying, 3D printing, prefabrication and artificial intelligence can improve the construction component but have little direct effect on the price of land, planning restrictions or government taxes and charges.
Chalmers’ acknowledgement that the Construction Code is costly and difficult to navigate points to the regulatory side of the housing supply equation, even as the government and Coalition differ over the role migration should play.
The Treasurer also declined to say when Home Affairs Minister Tony Burke would deliver his postponed National Press Club address on migration policy.
“That will be at some point in the future. Obviously, I don’t schedule Tony’s speeches for him,” Chalmers said.
Asked why the address had been called off, he said the government was continuing to work through migration policy.
“We’ve been working through these issues in migration,” he said. “Obviously, as I said before, we’ve made some progress getting net overseas migration down.”
Chalmers said migration had been “absolutely galloping” when Labor took office and repeated that net overseas migration was now 45 per cent below its peak.
“We expect to get it down a bit further. That requires ongoing work,” he said.
“We have flagged that publicly and when we’re ready to make an announcement, no doubt Tony will make that announcement in the usual way.”
On the housing market itself, Chalmers cautioned against drawing conclusions from short-term movements in property prices.
“Housing is a long-term investment,” he said. “People don’t make decisions on housing from week to week. They make decisions on investing in housing over a longer period, and over a long period now we’ve seen house price growth and we expect to see more modest growth over the course of the next couple of years.”
The debate leaves governments confronting several parts of the housing equation at once: how quickly the population grows, how much land can be developed, how quickly approvals are issued, what it costs to comply with building rules and how efficiently the construction industry can turn approvals into completed homes.
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