Key facts
- Populist policies like migration caps do not solve cost of living issues, Cormann said.
- OECD research indicates migration boosts employment for Australian-born workers without harming wages.
- Cormann believes productivity growth is the only sustainable way to lower living costs.
- Tariffs would increase costs for farmers, miners and builders, according to Cormann.
Mathias Cormann, secretary general of the OECD, is urging Australia's mainstream political parties not to adopt populist policies such as migration caps to address voter concerns about the cost of living. He argues that such measures, while popular, do not solve underlying economic issues and can even exacerbate them.
Cormann advocates for boosting productivity as the long-term solution to lower living costs. He plans to deliver these remarks in an address to the Centre for Independent Studies. He will highlight that mimicking populist economics does not win back voters and that addressing housing supply, energy costs, and real wage growth is key to receding populist tides.
He pointed to "arbitrary migration caps" and noted that while many Australians feel the intake is too high, the solution lies in addressing housing supply, infrastructure, and services. Cormann also stated that tariffs, like those imposed by US President Donald Trump and proposed by One Nation, would raise costs for various industries.