Australia homes: Tony Abbott says reducing migration may lessen housing issues

Sydney Homes — A newly-constructed home is listed as sold on an advertising board in the Sydney suburb of Greenhills Beach, Australia, August 2, 2016. Reuters/Jason Reed

Former Prime Minister Tony Abbott urged the government to cut the migration program as there is nothing "sacrosanct" about the country’s immigration numbers. He believes that reducing migration would lessen issues in housing.

Abbott also suggested a proposal that would allow access to people’s retirement savings for payments of home deposit. The proposal from the former Australian prime minister comes while the government forms its housing affordability package prior to the May budget.

Speaking to reporters on Monday, he explained that there are supply factors and demand factors. “And one thing the federal government could do that would ease some of the demand pressure is to scale back immigration at least until land release and infrastructure can keep up,” he said, adding that the Howard government has opted to scale back immigration its first few years for several reasons.

As for the superannuation access idea, Abbot said he has "quite a bit of sympathy" for it. He recognised that superannuation belongs to the people who want their money to be as useful as it can be. The former Liberal leader is open to the idea of people using superannuation to put down a deposit on a home instead of waiting between thirty to fifty years, which makes him consider superannuation for housing as a good idea.

But there are critics of the proposal too, with some saying people should not be allowed to chip away at savings that can be of good use during retirement. Shadow treasurer Chris Bowen argued that a very special plan to drive up housing prices by increasing demand and undermining Australia's retirement income system require a special plan, ABC reported. Bowen added that Treasurer Scott Morrison was "flailing around trying to find some answer on housing affordability when he refuses to use the main lever at his disposal.”

For crossbencher Derryn Hinch, the idea was crazy and pointed that home ownership was not a right of Australians, but a dream and everyone wanted to do it. Senator Hinch told ABC Radio that more people should consider renting.

The permanent migration program, which is now at 190,000 places per year, is generally made up of skilled workers below the age of 50. Sydney Morning Herald noted that immigration amounts to roughly 55 percent of the country’s population growth and the general consensus among experts is that it affects the cost of housing. A 2016 Productivity Commission report indicated that high rates of immigration put upward pressure on land as well as prices of housing.