ABC finance guru points the finger at the ONE factor that is driving up inflation and interest rates – and it’s completely in Anthony Albanese’s control

Skyrocketing immigration is fueling inflation and contributing to Australia’s rising interest rate problems, according to ABC financial guru Alan Kohler.

A record 400,000 migrants have moved to Australia in the past year, with almost 1.5 million expected to arrive over the next five years.

Rapid population growth has seen house prices in Sydney, Brisbane and Perth rise by double digits since January, with capital city rents rising by an average of 16 per cent over the past year.

Despite the concerns of a chorus of experts, Anthony AlbaneseThe government has no plans to restrict immigration.

“Net overseas migration exceeds 600,000 annually,” Kohler wrote in the New daily.

“How can the Reserve Bank be expected to slow demand when there are still half a million mouths to feed,” he asked.

The annual migration growth rate in Australia is currently 2.3 percent. When the 29,400 births in the March quarter are added, population growth was 2.8 percent.

There have been only four years in the past 113 years – 1910, 1920, 1950 and 1970 – when the country’s population growth exceeded 2.5 percent per year.

The level of inward migration in 2023 “will cause a huge shock and change everything about the economy, leading to a recovery in housing prices despite the massive increase in interest rates,” Kohler wrote.

Population growth is leading to stronger-than-expected economic growth, he said.

Kohler pointed out that GDP and aggregate demand would fall if population growth did not increase by 2.8 percent, meaning interest rates would be maintained or even reduced, not increased.

Previous Labor governments in the 1970s, 1980s and 1990s cut immigration during cost-of-living crises, keeping house and rent increases in check.

But on Tuesday the Reserve Bank raised the cash rate for the 13th time in 18 months, taking it to a 12-year high of 4.35 per cent, after inflation rose 5.4 per cent in the year to September .

ABC finance guru Alan Kohler (pictured) has joined the growing number of experts who have pointed out the fatal flaw in Anthony Albanese’s attempts to bring down inflation and interest rates – Australia’s massive levels of immigration

New Governor Michele Bullock now expects it will take longer for inflation to moderate. He predicts a return to the target of two to three percent by the end of 2025, instead of mid-2025 as only predicted in August.

Monthly mortgage repayments in November will be 68 per cent higher than in May 2022, when the RBA cash rate was at a record low 0.1 per cent.

Yet housing prices have soared this year, leaving young people without access to real estate as new migrants compete for cash to buy or rent a home.

Treasurer Jim Chalmers has repeatedly suggested that the government has no control over or targets for long-term and permanent arrivals, including skilled migrants and international students.

“That is not a government policy or a government objective,” he told ABC’s Q+A program in May.

‘It’s not a floor or a ceiling, it’s not something the government determines.’

This is despite a record 400,000 migrants pouring into Australia in just a year, far exceeding the Treasury’s forecast of 315,000 arrivals in 2023-2024.

Dr. Chalmers and his department expect 1.5 million migrants to move to Australia in the five years to June 2027.

As many as 152,200 people moved to Australia in the three months to March, pushing up rents in the capital by 16 percent over the past year

The treasurer wrote a thesis on former Labor Prime Minister Paul Keating in 2004 – entitled Brawler Statesman – and considers him a hero.

But the Keating government was the last government outside of a world war, depression or pandemic to halve immigration rates, causing net overseas arrivals to fall from 81,669 in 1991 to 51,358 in 1992 and 34,822 in 1993.

A Labor government led by an outspoken advocate of multiculturalism and family reunifications halved immigration levels in just two years 30 years ago, during an era of double-digit unemployment.

As a result, inflation fell from 6.9 percent in December 1990 to just 0.3 percent in December 1992.