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The Guardian - AU
The Guardian - AU
National
Paul Karp Chief political correspondent

Dutton readies budget reply as Chalmers links migration cut to inflation fight

Jim Chalmers
The treasurer, Jim Chalmers, says ‘a fairly substantial moderation is migration’ is ‘built into the budget’. Photograph: Mike Bowers/The Guardian

Jim Chalmers has said the projected halving of net migration will contribute to Australia’s inflation fight, ahead of Peter Dutton’s budget reply which is expected to attack Labor over the spike in arrivals.

As Guardian Australia revealed in April, the Coalition will make home ownership a “core” election issue by linking the net migration intake to housing construction, a policy expected to be announced or at least constitute a major theme of the opposition leader’s reply on Thursday.

The Albanese government has challenged Dutton to use the speech to fill in the blanks of Coalition policy, including where and how it will build nuclear power plants and where it might make savings, given its complaints Labor’s budget will fuel inflation.

On Wednesday Dutton attacked Labor in morning interviews and in question time over migration, complaining that “almost 1 million people” had arrived in the past two years while “only 265,000 homes have been built [and] building activity is at 11-year low”.

The budget papers reveal net migration is projected to fall from 528,000 last year to 395,000 this financial year, then 260,000 in 2024-25, 255,000 in 2025-26, and 235,000 in the next two years.

It said government actions had reduced net overseas migration by 110,000 people over four years from July, citing the response to the migration review. This included a reduction in international student numbers, which has been followed by a new plan to cap their numbers.

Chalmers told the National Press Club post-budget lunch on Wednesday that there was “a fairly substantial moderation in migration built into the budget”, including as a result of student changes and ending the Covid visa.

“We had that spike in the post-Covid period, which was primarily students and long-term tourists, and that meant the numbers were a bit higher and now they’re moderating to more normal levels,” he said.

Chalmers said migration was “important” but it needs to be “well managed”, including addressing pressures such as housing and infrastructure.

“We’re seeing a substantial moderation in inflation in the forecasts and in the last couple of years as well, and that is largely because of how we’re managing the budget, but it will also be increasingly about how we’re managing the population as well.”

The budget contains $6.2bn in new housing money for a total of $32bn over 10 years for housing.

Parliament is set to rise on Thursday with no resolution on Labor’s controversial deportation bill, which was described as “urgent” when introduced in May.

Labor and the Greens will move a Senate hours motion for 10 bills to be passed on Thursday but not the deportation bill, which the Greens oppose.

The government is yet to respond to the Coalition’s proposed amendments to the bill and has no agreement with the opposition to bring it on for a vote, meaning it may not be voted on until late June when the Senate returns.

The deportation bill creates new powers for the government to require unlawful non-citizens to cooperate with their removal, harsh new powers which Labor has used to deflect from criticism about its handling of releases from detention.

But population pressures from legal arrivals are also a potent political issue, with some mainstream experts, such as former Deloitte Access Economics economist Chris Richardson, linking the cost of housing to the temporary spike in arrivals.

In April, the Liberal senator Andrew Bragg, the opposition’s spokesperson for housing affordability, complained that under Labor migration had reached “a ratio of one house for every 3.2 migrants”, compared with 1.2 under the Coalition in 2016-17.

In question time on Wednesday, Anthony Albanese rebuffed Dutton’s criticisms on migration by noting he had said in September 2022 that “we do need an increase in the migration numbers”.

Albanese said Labor had inherited a “migration mess” from the Coalition, citing Martin Parkinson’s review for his claim that migration was “so badly broken, it was a deliberate decision to neglect the system”.

Chalmers said it was “long past time for the Coalition to present their plan”.

“They’ve said there should be deep spending cuts,” he told reporters in Canberra. “Well, it’s time to say what they will cut.”

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