Dick Smith blames “ridiculous immigration” for Australia’s affordability crisis

Dick Smith blames “ridiculous immigration” for Australia’s affordability crisis

Entrepreneur Dick Smith has taken a pop at immigrants, blaming Australia’s “unbelievable” population increase for “enormous” house prices, Sydney’s traffic jams and couples not being able to get on the property ladder.

“You can’t drive in Sydney at the moment … the housing prices are enormous, young couples can’t afford a house with a backyard anymore,“ Smith said on Sky News on Tuesday evening.

“You think each generation will be better off – yeah, you can buy more LCD TV sets and fly to Bali cheaper,” declared the multi- millionaire, who made his name as owner of the Dick Smith electronics chain, which he later sold to Woolworths.

 

He must be about to announce his candidacy for the next election...

 

Tony's got the same idea:

Abbott lays out five-point plan for the 'winnable' next election

"In short, why not say to the people of Australia: we'll cut the RET [renewable energy target] to help with your power bills; we'll cut immigration to make housing more affordable; we'll scrap the Human Rights Commission to stop official bullying; we'll stop all new spending to end ripping off our grandkids; and we'll reform the Senate to have government, not gridlock?"

 

I have very little respect for some of these people mouthing populist ****.

”The most fundamental right is to get a house with a backyard” he declared, lamenting that “young couples can’t do that anymore.”

I would love to live in New York and have a house with Central Park as my backyard! That's my fundamental right.....

 

I think he is pretty much right, and its going to see the loss of votes to parties like One Nation.

At the current run rate Sydney is adding 500,000 every 5 years. I just can't see the level of building going on to facilitate that. In terms of Schools, Hospitals, Public Transport, etc.

There was an article the other day that said the Eastern Suburbs lightrail will be over its capacity before its even finished completion. They will effectively have to keep running bus services during the peak.
Now take into account as part of a means to fund and justify the development, they have planned for rezoning along its corridors also, so it will be even further over capacity.

Once again a case of reap the windfall but cheap out on the solution. This is going to leave a future infrastructure debt/deficit.

Motorways still being opened with 2 lanes in each direction, etc..

Schools starting to burst at the seems.

We should be pretty much building a major hospital every 3-4 years.

Our infrastructure and planning is based around a much lower growth rate.
Most of the current infrastructure being built is just clearing previous backlogs with little extra capacity for a quickly expanding population.

I do think we need to plan carefully if we dont want Sydney being overrun in the next 5-10 years.

Thats without even taking into account any effect it might have on things like housing.

 

Wow, just wow. Because I know my power bills have improved massively from your previous 'fix' Tone....... NOT . But yeah the rest of tripe too, go have a surf with the sharks would ya Tone. lol.

To a degree pressures are population related but that's a global issue that seems to be largely avoided. One could argue global population growth of 10,000 net per hour is perhaps inappropriate? Ironically though this population growth thing is one of the drivers for investments, including property as part of the human infinite growth idea. Hence touching is a bit taboo.

 

So back in the day when Dick Smith was selling TV's, if he was selling out too fast would he limit customers allowed in the store or would be just order more TV's?

Cutting demand isn't a solution, upping supply is. Harry Triguboff has been saying for years that Sydney's approvals process is what is holding things back.

 

Australia is not just Sydney.....

Oh well.

 

There's a big shiny thing in the sky that does wonders for power bills....how about making it easier to pop solar on the roof?

Immigration is the only way this country grows. Developed countries don't make enough babies....He may have a point here but you've got to be very careful....

And how in Earth does scrapping a human rights commission stop bullying?

 

The concept that new people arriving to Australia is bad is based on the concept of scarcity of resrouces. There are no jobs for these people. There is not enough houses. There are not enough hospitals. There are not enough schools.

It is not an issue of their is not enough. The new people create jobs, add houses, add hospitals and add the number of schools.

It is an issue of making sure the new people have skills and abilities that we need so they can assist in adding to our economic prosperity.

 

Ah yes it's all the fault of the immigrants.
He doesn't strike me as a native though.
He is a Dick indeed.

 

Immigration policy, not immigrants.

"Did Dick Smith blame “immigrants” for high house prices? No, he blamed high immigration. The difference is subtle but very important. One is objective and the other a clear “dog whistle” that Dick Smith is somehow racist." Domainfax smears Dick Smith with fake news - MacroBusiness

 

High Rise Harry just wants to make himself even richer. In an interview when asked if all the apartment building lead to an over supply of housing he said 'simple I would just bring in more immigrants'. Funny that, I thought the Federal government set immigration numbers!

 

Obviously there are other factors with regards to our high house prices, but it is not just Dick Smith's idea that high population growth (fuelled by immigration) is a factor. Eg look at this RBA research paper:

https://www.rba.gov.au/publications/bulletin/2015/sep/pdf/bu-0915-3.pdf

Long-run Trends in Housing Price Growth

Marion Kohler and Michelle van der Merwe*

This article examines the factors driving long-run trends in Australian housing price growth
over the past three decades. During the 1980s, housing prices grew broadly in line with general
price inflation in the economy. The period from the 1990s until the mid 2000s saw relatively
strong housing price growth associated with a significant increase in the debt-to-income ratio of
Australian households. Since the mid 2000s, strong population growth has played an increasing
role in explaining housing price growth.

To summarise, since the mid 2000s, the Australian housing market looks to have been subject to a series of persistent increases in demand stemming from high population growth, while supply has continued to increase by around 145 000 dwellings.
Graph 9 suggests that the excess demand for new dwellings (measured as underlying additional demand less additional dwellings) may have played a role in generating price growth since the mid 2000s, while it looks to have played a less prominent role in the decade before that.

 

The concept actually is that the high number of arrivals creates an infrastructure deficit. It's all well and good that they might make some contribution in the future, but they need infrastructure right away (eg homes, schools, hospital, power, transport). It takes time to build as well as money. It will be decades before the new arrivals start making a significant contribution by way of the tax system.

 

You have created a false dichotomy there (false choice). We could have more sustainable growth just by cutting immigration back to around the long term average of around 70,000 pa as opposed to the approx. 200,000 pa of the last 12 years. The latter is giving us the fastest population growth in the developed World.

 

Overall, migrants bring money from overseas and actually contribute instantaneously. My family moved from the UK, as did a large number of their friends. Each sold up their UK property and swapped their pounds for dollars, bringing 5-6 figures upon their arrival. There are studies showing that if you were to take away this type of money coming in, Australia is in full recession. The two biggest countries feeding population growth are China and India, with something like 65,000 people a year between them. If each person brings $20k each, thats well over $1bn added to the economy. That feeds consumer spending which feeds tax revenue which supports infrastructure and employment.

Economies grow by receiving more $ than they give. On a national scale it doesn't matter how many people you have buying and selling from eachother, the economy doesnt grow until something external comes in.

 

If you look at actual incomes they are stagnant at best. Population growth adds to the GDP figure but it doesn't mean we are better off on a per capita basis. Immigrants may bring in assets but this does not immediately fall into government coffers - but they do need government provided infrastructure straight away. Hence the infrastructure deficit. Why do you think that infrastructure has been declining in recent years?

 

This backs up what I am saying regarding infrastructure and how population growth is only giving the illusion of economic growth and prosperity:

Infrastructure deficit puts us on a road to nowhere
Opinion
The Drum
By Alan Kohler
Updated 30 Jan 2014, 2:57pmThu 30 Jan 2014, 2:57pm


There's every indication we are approaching a national emergency when it comes to infrastructure, writes Alan Kohler.

One of Australia's many political ironies is that the national effort to Stop The Boats has disguised an immigration boom.

Immigration has increased five-fold since the Howard Government came to office and with a big increase in births over the past ten years, in part also due to Howard Government policies, Australia's total population growth has doubled and is now about three times that of most other developed countries.

The Abbott Government's ambitious paid parental leave project will ensure that the baby boom goes on and the pressure for immigration from India and China - apart from New Zealand the two leading sources of migrants - will only increase as well.

Last year Australia's population grew 1.8 per cent, or 407,000, compared with 0.7 per cent for the United States, 0.5 per cent for Europe and China, and minus 0.1 per cent for Japan.

The extra 400,000 or so people a year is the reason Australia has not had a recession for 23 years and it's why GDP growth is now around 2.5 per cent. On a per capita basis, Australia's economic growth is among the weakest in the world, and per capita consumption growth is zero.

In other words, population growth is the only reason it looks like the economy is growing.

One obvious consequence of Australia's population boom, apart from disguising a fundamentally weak economy, is rising house prices because not enough houses are being built as a result of restrictive planning laws and high construction costs.

Not enough infrastructure is being built either, to the point where a national emergency is approaching.

There is far too much focus on politically motivated big ticket infrastructure projects that soak up the available funding, and not enough on what you might call business-as-usual infrastructure.

Infrastructure Australia (IA) was set up as a statutory body in 2008 to organise and prioritise infrastructure spending but six years later Michael Deegan, the Infrastructure Coordinator (effectively the body's chief executive), has written a deeply frustrated submission to a Senate inquiry, declaring: "There is an air of unreality about our infrastructure planning."

The inquiry, by the way, is into the "Infrastructure Australia Amendment Bill 2013", which basically seems designed to scrap IA and start again. Deegan says the bill will make IA less independent; the Minister for Infrastructure and Regional Development, Warren Truss, says it will make it more independent but it doesn't look that way.

Says Deegan: "Several provisions in the Bill considerably broaden the power of a Minister to give specific directions to Infrastructure Australia in areas that are at the core of the organisation's responsibilities, so independence is not in fact conferred."

Rarely have we seen a more critical submission on a bill from a public servant. Through more than 20 drafts of the bill, IA was not consulted on it at all.

Deegan's broad complaint is that infrastructure planning in Australia is still not independent of politics.

That used to be true of monetary policy too, but not anymore. It has been generally agreed that setting interest rates is too important a task to be left to politicians, so the Reserve Bank is now entirely independent.

With Australia's population growing the way it is, infrastructure has become as important to the economy as monetary policy - if not more so.

IA should be given the sort of independence that the RBA has.

 

I actually don't see how any of that supports migrant number limitations, it just highlights inadequate government planning and politically motivated bad decision making. It actually says that economic growth only remained positive because of what migrants brought to the table. Its us that is doing it wrong, not the migrants who are saving our a$$es. without them adding to gdp, we would have had a negative per capita result.

"not enough houses are being built as a result of restrictive planning laws and high construction costs"

"There is far too much focus on politically motivated big ticket infrastructure projects that soak up the available funding, and not enough on what you might call business-as-usual infrastructure."

"In other words, population growth is the only reason it looks like the economy is growing."