Leading economist Chris Richardson has called on the Australian government to cap some migration as he labelled the nation's housing crisis a decades-long "misery machine" on Q+A.

Mr Richardson, an independent economist, who has previously worked for the International Monetary Fund and the Australian Treasury was responding to a question from audience member Julian Coxall on migration levels and the ability to build new dwellings at a fast enough rate.

With housing prices in Australia continuing to rise and rental availabilities dwindling as prices rise, many Australians are finding the housing market difficult.

And Mr Richardson did not mince his word on Monday night as he took aim at Australian housing policy across several decades.

"What we messed up is housing," the leading economist said.

"We may need to react around migration, but what we messed up is housing.

"Across 40 years, we have turned housing into a misery machine in Australia.

"This is a stunning national fail."

He also said that he, like the Reserve Bank, believed that rising interest rates would help solve problems around housing and inflation but realised that the mechanism the RBA have used is not the answer.

"It is almost certain today that we have clicked over as a nation to housing prices being a new record high," he said.

"They fell for a time as interest rates went up.

"We had a terrible experiment over the past year with interest rates roaring up and yet, house prices went up.

"I used to think interest rates would do the trick.

"They won't. We have to build."

Local councils need to relax development policy

He also laid blame at the feet of local governments for being unwilling to build as councils rejected building proposals but eventually said that the nation had to look at capping the influx of people moving here.

"I would love not to touch migration," Mr Richardson said.

"But we have screwed this up so massively as a nation that we temporarily need to look at migration as part of this equation."

The main group? University students.

"We have now 725,000 students from the rest of the world studying in Australia, a year ago that was 555,000.

"We sell education to the world and a lot of that we do well and some of it, we don't do as well, but it is a big part of the increase in the pressure at the moment and it is a relatively concentrated bit where we can make a change."

He then called on the government to fund universities so they would not be so reliant on foreign students before adding that once again local councils also needed to look at planning.

"The bigger lever is to insist local councils say yes to more [building] and the government is gently starting that process ...  until we do that, we need, I would say, students as the lever and pull back for a while."

Asked if the government was prepared to make such a move Assistant Treasurer Stephen Jones said it would be looked at.

"I agree with Chris, that we need to look at the student stuff," Mr Jones said.

Mr Jones also flagged that the government wanted to look at better rights for renters after 67-year-old audience member Julie Knott said she had recently had to move due to her rent going up by $200 a week.

"The pattern of rental has changed in Australia," Mr Jones said.

"It used to be something which just young people did and that's no longer the case.

"We've got to agree to build 1.5 million homes over the next five years.

"[But] even if we build more homes and build more homes for renters, that in and of itself won't deal with the issue of renters being turfed out for no reason.

"We need to have better regulation around long-term tenancies and we've got to work with the states because they have the levers to do that."

Hold off on Stage 3 tax cuts

While many Australians are struggling with the rising cost of living and inflation is still trying to be brought under control Independent MP Monique Ryan called for stage three cuts, scheduled for July 2024 to be abandoned.

Her argument was that the tax cuts would result in more money in the economy which would then keep inflation higher.

"If you're talking about trying to bring down inflation, one thing you might not do is put $313 billion back into the economy," Ms Ryan said.

"We should look at the stage three tax cuts and we should be mature enough to look at something which was legislated in 2019, before the pandemic, before the current cost-of-living crisis and before the crisis of affordability and see if it is fit for purpose and have the maturity to make changes to something which is no longer in the country's best interests."

Mr Richardson agreed that the tax cuts being implemented would likely stop inflation coming down but rather than calling for them to be scrapped suggested they should be delayed.

"I don't think they are as unfair as people think they are ... but they're too big and they're coming too soon," he said before adding their implementation would mean interest rates in Australia would stay higher for longer.

"The rest of the world can start to expect interest rates to be cut in six months time. In Australia, maybe a year because these big tax cuts are coming," Mr Richardson said.

"There is a good case for delay.

"I'd like to see inflation lower, put them back 12 months."

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