Peter Dutton's migration cut numbers don't add up

Peter Dutton's claims to free up 40,000 homes through migration cuts are nowhere close to accurate. Dr Abul Rizvi reports.

AS A RESULT of his migration cuts, Opposition Leader Peter Dutton said last May:

“In the first year, 40,000 homes will be freed up. That includes the numbers who would be bidding at auctions this weekend against Australian citizens.”

This claim does not come close to standing up to scrutiny.

In his analysis of immigration demand for housing, ABC finance journalist Alan Kohler has assumed an average of 2.4 persons per household. That ratio is likely to be too low for students, who tend to live in more crowded accommodation. But let’s go with it, to be generous to Dutton.

Dutton proposes three main cuts to migration:

45,000 reduction in the permanent migration program;
6,750 cuts to the humanitarian program; and
30,000 lower student cap than Labor had proposed.

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Migration program cut

Between 60% and 70% of the annual migration program is delivered via people already living in Australia and 30% to 40% from overseas. Temporary entrants already in Australia would not require additional accommodation. To be generous to Dutton, let’s assume 40% of people in the migration program in the future are from overseas rather than existing temporary entrants. That reduces the size of Dutton’s cut for housing purposes to 18,000.

Dutton says he will cut a third from the family stream and two-thirds from the skill stream. While he does not have the legal power to cut places for partners and dependent children, let’s assume Parliament somehow decides to give him that power.

The family stream is almost entirely partners, dependent children and parents who tend to live with their sponsors rather than require additional accommodation. That reduces his cut for housing purposes to 12,000. But every year, between 5,000 and 6,500 permanent skilled migrants depart Australia, either permanently or long-term. Let’s assume that will be 5,500 in future. That effectively reduces the impact of Dutton’s migration program cut to 6,500.

Dividing by a ratio of 2.4 people per household would mean around 2,700 homes are freed up as a result of Dutton’s cut to the permanent migration program.

Humanitarian program cut

The humanitarian program is usually 10% to 15% onshore and the remainder offshore. But let’s be generous to Dutton and assume his 6,750 cut to the humanitarian program will be entirely people from offshore.

Traditionally, the average family size of humanitarian program entrants is between three and four. Let’s use the lower value of this range and assume an average family size is three people. That would mean 2,250 homes would be freed up as a result of the cuts to the humanitarian program.

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Student cut

Dutton proposes a student cap that is 30,000 less than that proposed by Labor. While students generally live in more crowded accommodation, let’s assume the ratio of 2.4 applies. That would produce an outcome of 12,500 freed-up homes.

But Dutton has proposed a vocational education and training (VET) sector student cap of 95,000. Based on current VET sector student visa grant levels, that is around 50,000 more than it would be if the current visa processing policy was retained. It is not clear if Dutton is intending to change student visa processing policy to hit the VET cap of 95,000. If he were his student capping policy would actually require more homes, not less.

Note that it is also highly unlikely he could implement his student visa cuts until well into 2026, given the need to negotiate caps for individual providers and to secure passage of student capping legislation (which he opposed in late 2024).

Summary

The above suggests Dutton’s migration cuts may free up between 4,950 homes (due to the migration and humanitarian program cuts alone) or 17,450 homes if the 30,000 cut is achieved and there is no change in student visa processing policy for the VET sector to hit the 95,000 cap.

Nowhere near the 40,000 he is claiming.

Dr Abul Rizvi is an Independent Australia columnist and a former Deputy Secretary of the Department of Immigration. You can follow Abul on Twitter @RizviAbul.