Leading executives from some of Australia's top companies are emphasising the need for improved infrastructure and housing policies.
This comes as the Australian Bureau of Statistics (ABS) reports a 7.6% rise in rental prices in the year to September 30, the most significant annual increase since 2009. This surge is indicative of the tight housing market across major cities.
Surge in rental prices
A call to action from business leaders for increased immigration recognises the need to ease a tight labour market – but this would place upward pressure on an already overcooked rental market and pose the challenge of where to house new migrants.
Commonwealth Bank CEO Matt Comyn conveyed to The Australian the necessity of balancing immigration levels, which are expected to moderate in 2024 from record highs.
Comyn highlighted the long-term economic and social benefits of immigration to Australia, coupled with the need for corresponding improvements in infrastructure, housing and support services.
Recruitment remains a challenge
The Australian canvassed other business owners who also pointed out the need for more workers in various businesses where staff recruitment remains a challenge. This scarcity of workers contributes to rising service costs and wages.
On the other hand, the housing shortage would be exacerbated by increased immigration and some economists argue for a reduced annual net migration to ease the problem.
Economists warn that the current levels of immigration are fuelling retail sales inflation, especially concerning rents. Temporary visa holders, who now constitute a record 10% of the population, are having an impact on inflation and demand.
RBA governor Michele Bullock acknowledged the complexity of the immigration issue, noting its dual role in both adding to demand-driven inflation and supplying labour to the market.
The head of the Australian Banking Association Anna Bligh stressed the importance of addressing the living arrangements of international students in Australia. Bligh suggested exploring incentives for households to rent out spare rooms to students, thereby addressing the room shortage issue.
Government review pending
All of these perspectives will need to be considered by Dr Martin Parkinson, who is spearheading the government's ongoing review of the immigration system. The review aims to implement changes, including more streamlined skills assessments and fair pay thresholds for incoming workers.
The suggested approaches from diverse business leaders and commentators underscore the multifaceted nature of immigration's impact on Australia's economy and housing market.
The roadmap is clear but getting there not as certain – the country needs a balanced and strategic approach to immigration, backed by robust infrastructure and housing policies.