Mimicking populists will not ease cost of living or boost productivity, Mathias Cormann warns

Australia’s mainstream political parties are being warned not to adopt populist policies such as migration caps to address voters’ grievances over the cost of living.

Instead, Australia’s longest-serving finance minister Mathias Cormann is urging politicians to deliver housing, real wage growth and lower energy costs by boosting productivity.

Now the secretary general for the influential Organisation for Economic Co-operation and Development (OECD), Cormann will deliver an address to the Centre for Independent Studies on Saturday night spruiking productivity as the only way to reliably lower the cost of living over the long term.

Though not directly named in his address, One Nation – which largely runs on an anti-immigration platform – has surged in popularity since the 2025 federal election, with its primary vote reaching 25%, according to the latest Guardian Essential Poll, rising above the Coalition’s 22%.

While populist parties may have gained popularity by speaking to real grievances over rising energy bills, homeownership and real incomes going backwards, Cormann is expected to warn Labor and the Coalition not to follow suit.

“Mainstream parties that respond to a populist surge by adopting its economics do not recover their voters. They lose twice: once to the original, which the electorate will always prefer to the copy, and once to the centre, which has nowhere else to go,” he will say in his address.

“The lesson is consistent: deliver homes, lower energy costs, real wage growth and a credible budget, and the populist tide recedes.

“Mimic the populists, and you simply confirm that they were right all along. The way to defeat populism is to solve the problems it feeds on.”

Cormann will point to “arbitrary migration caps” imposed regardless of their effect on business, hospitals, aged care, or universities.

He will acknowledge more Australians now than any time in 20 years say the migration intake is too high and may support such policies, with many attributing their concerns to housing.

But the answer is to address housing supply, infrastructure, services and the composition of the migration intake, he will say.

According to OECD research across Australia’s regions, in places where more migrants arrived, employment among Australian-born workers grew faster, not slower, with no measurable effect on their wages.

Without migration, Australia’s working-age population would decrease as the number of older people grows.

“An ageing country that chooses to shrink its working-age population while promising to spend more on health, care and defence has not developed a plan – it has put forward a contradiction,” Cormann will say.

Tariffs, which have been imposed by US president Donald Trump and proposed by One Nation, would also fail to address the cost of living and could instead raise costs for farmers, miners and builders, Cormann says.

He believes Australia can only grow its way out of the issue through productivity.

“There is no shortcut to a lower cost of living. There is no populist shortcut, through tariffs and caps and state banks,” he says.

“There is only the long way round: an economy that produces more, competes harder and grows faster than its costs… anyone offering you a quicker route is offering you a poorer country.”