One Nation leader Pauline Hanson has released new modelling predicting that her party’s plan to slash temporary migration by 750,000 over three years and shrink Australia’s population would save renters up to $4300 a year.
But a former Reserve Bank economist who co-wrote a 2019 paper equating a 3 per cent population fall with a 9 per cent drop in rents - that formed the basis of One Nation’s modelling - warned cheaper rents would mean falling living standards.
Peter Tulip, who was previously the RBA’s senior research manager, backed One Nation’s modelling of cheaper rents based on his research but warned shrinking Australia’s population by 750,000 over three years, via cuts to temporary student visas, would have economic consequences, including reduced income tax revenue.
“Rents are driven by demand and supply so you would get fewer potential tenants bidding at each rental inspection,” Dr Tulip told The Nightly as chief economist with the Centre for Independent Studies.
“So yes, there would be an improvement in housing affordability - financially, we would be worse off but I don’t think financial considerations are really what’s driving the immigration debate.
“Education is Australia’s fourth biggest export industry: if you restrict our export earnings, you’ll reduce our overall standard of living.”
Under One Nation’s best-case scenario with a 10.1 per cent saving, rents would fall by $83 a week, adding up to $4340 a year.
In the middle case, rents would fall by 6.5 per cent, as a $54 weekly saving equated to $2818 a year.
The lower case had rents dropping by 4.7 per cent, with the $39 saved every week adding up to $2019 annually.
The three scenarios would mark a contrast to a 5.9 per cent annual surge in rents during the last financial year to $705 a week, based on Cotality data that formed the basis of One Nation’s dollar figures.
Policy advisers with One Nation did the rent scenario modelling based on 2019 Reserve Bank modelling on population growth and rental vacancy rates, with the Parliamentary Budget Office unable to provide policy analysis unrelated to effects on the Budget, a spokesman for Senator Hanson told The Nightly.
Canada’s 70 per cent cut to temporary foreign worker visas, implemented in September 2024, has made life easier for renters, with official government data showing a 6.4 per cent plunge in Calgary apartment rents during the last financial year, compared with a 5.2 per cent drop in Montreal and a 4.1 per cent dip in Vancouver.
Economist Daniel Wild, the deputy executive director of the conservative Institute of Public Affairs think tank, said One Nation’s proposed cut to temporary migration would be likely to reduce rents, but this would be offset by Labor’s negative gearing changes discouraging new landlord investors.
“It’s broadly feasible when you look at the size of the reduction that’s being proposed with One Nation who’ve actually said they want net negative migration,” he told The Nightly.
“I think it’s reasonable to say there’s going to be a noticeable drop to prices in the rental market - obviously, there’s a lot of other factors; we’ve got a lot of tax changes which are playing a fairly major role and may offset some of that.”
Australia’s three million temporary visa holders, including many international students, typically live in rental accommodation and housing cost increases are vastly outpacing already high inflation levels.
This housing shortage is expected to linger despite new data showing the highest level of new home completions in almost seven years.
“Families are competing with hundreds of people for rental accommodation while more of their wages disappear into rent,” Senator Hanson said on Wednesday.
“For too long, Labor and the Liberals have outsourced immigration policy to universities and put the demand for cheap unskilled workers ahead of Australian living standards.
“Universities collect the fees, while Australians compete for the homes and pay the price.”
Her party has released its new rent modelling a day after Opposition Leader Angus Taylor unveiled a plan to slash the number of temporary migrants in Australia and cut net overseas migration by two-thirds - from 300,000 to 100,000.
Both the Coalition and One Nation are vowing to return long-term immigration levels to where they were before the late 2000s mining boom, prompting business groups to warn of severe economic consequences.
While Australia’s annual building completions rate rose to a seven-year high of 180,546 during the last financial year, Master Builders Australia chief executive Denita Wawn said the latest Australian Bureau of Statistics data released on Wednesday was more reflective of decisions made up to three years ago.
“If you think about it, it takes on average 12, 15 months for a detached house to be built from the time it’s approved to time it’s completed; high rise takes nearly three years from building approval to completion,” she told The Nightly.
The annual pace was well below the 240,000 annual average needed under Labor’s plan to build 1.2 million homes over five years even though the June quarter completion rate of 47,168 was the highest level over three months since the December quarter of 2019.
The annual building commencement rate was better at 203,707, but that will still well below Labor’s home building target.
Master Builders Australia is expecting Labor’s National Housing Accord to fall 262,000 short of its target by mid-2029, and has argued many temporary migrants work on building sites as labourers and in traffic management.
“We don’t only rely on skilled migrants, including tradies, but we also rely on labourers and semi-skilled workers, many of them who are here not under a skilled migration visa but alternative visas such as student visas and so forth and they do contribute to our industry,” Ms Wawn said.
One Nation last month unveiled a plan for Australia to reduce the number of temporary migrants and visa overstayers by 750,000 over three years, producing net negative population growth, by restricting student and graduate visas and cracking down on visa switching.
Net overseas migration would then settle at 130,000 a year, marking a return to pre-mining boom migration pace of 2004 based on arrivals of at least a year minus equivalent departures.
“The Liberals are now talking about lower migration after years of helping create this mess. Australians deserve more than another major party target that won’t be achieved,” Senator Hanson said.
With One Nation consistently outpolling the Coalition, Mr Taylor has denied the Opposition is spooked.
“Look, that’s nonsense. Our focus is on our nation, not One Nation, and what we need as a country,” he told Nine’s Today show on Wednesday.
“And we’ve seen the biggest increase in immigration in our history as a country, and that’s why we need the biggest cut to breathe again.”
Mr Taylor has also responded by picking a fight with the business lobby, made up of the Australian Chamber of Commerce and Industry, the Business Council of Australia and the Property Council who have slammed the Coalition’s plan to reduce the number of temporary migrants by 650,000 over four years by banning bridging and temporary graduate visas.
“Can I say, we will develop our policy and announce our policy based on the national interest, not based on vested interests,” he said.
“I talk to business groups all the time, particularly small businesses, and right now what we are seeing is a guest worker economy.”
Under a Coalition government, net overseas migration would fall to 100,000 in its first two years, which, excluding the pandemic, would be the smallest intake since 1997 and 1998.
After that, it would rise slightly to 130,000 in year three and 160,000 in the fourth year.
After that, future net overseas migration would be based on home building completions.
Australia’s net overseas migration rate stood at 292,100 in the year to March.
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