Government clearly planning a return to high immigration

Before the pandemic, Australia’s population was growing at around 1.5 per cent to 1.6 per cent a year.

Will the Big Australia brigade win out? This is a question worth posing as we begin to return to a more normal world.

While the lull in the rate of population growth associated with closed international borders is something most Australians have welcomed, the signs are that the federal government intends to return to population growth turbocharged by immigration as soon as possible.

Before I explain why it’s likely to be all systems go in returning to the high rates of immigration that were the norm pre-COVID, it’s worth just running through the numbers Before the pandemic, Australia’s population was growing at around 1.5 per cent to 1.6 per cent a year. This put us at the top of all other developed countries.

Net overseas migration was contributing about two-thirds of this growth in population, at 200,000 to 250,000 a year. The largest single group of migrants to arrive and stay at least 16 months was international students.

This had been the situation for the past 15-odd years, with some fluctuations for the global financial crisis and the mining boom that occurred after. It was in marked contrast with the situation before that, when net overseas migration rarely exceeded 100,000 a year. That was also when permanent migration was numerically more important than temporary migration, a reverse of the recent situation.

During these years of high immigration, employers were happy to have a ready source of labour, skilled and unskilled; universities were happy to have unconstrained growth in international student numbers; and the property industry was happy with the strong demand for accommodation. But there is no doubt that there are many costs as well as benefits associated with such high immigration rates, a point federal and state governments have not been prepared to concede.

Take the following quotes from the recent population statement released by the federal Treasury. (I apologise for their length but they illustrate how dreadful Treasury’s analysis is.)

“Migration will be a key component of Australia’s economic and health recovery from COVID-19. The government will maximise the economic benefits of the migration program by addressing skill shortages, attracting highly skilled migrants in niche industries, increasing investment to support economic recovery, and supporting regional migration.”

These are really just words. In fact, the composition of net overseas migration has become much less skilled across time. Moreover, as the Productivity Commission has demonstrated, what passes as skilled in the permanent migrant intake is not very skilled at all and many who enter through this gateway are not employed in skilled occupations.

But it gets worse. “Migration is important in ameliorating some of the economic impacts of our ageing population, as migrants tend to arrive at a younger age than the average Australian. This means they are generally in a position to contribute to our workforce, and have a higher participation rate than the rest of the population. Because migrants tend to arrive in Australia at a relatively young age, they are also more likely to be in a position to have children. This means their arrival not only contributes to immediate population growth but also future population growth through their children.

“If there were no future migration … we would miss out on the demographic and economic benefits migrants bring by increasing the proportion of people working and paying income tax, and decreasing the proportion of people drawing on government services.”

This analysis is so lopsided as to be laughable. It makes no mention of the impact of immigration on per capita GDP or the fact migrants themselves age, so there is no noticeable effect on the age composition of the population — a point made by the Productivity Commission. There is also no consideration of the ethical problem of taking the “best and brightest” from countries that could really use their services.

Why the Treasury’s recent population statement is worth looking at is that it points to the assumptions being made about future levels of net overseas migration. After just a few years, Treasury is expecting net overseas migration to return to its pre-pandemic levels, averaging about 240,000 a year.

We have some further insight into the government’s thinking on future migrant intakes from the equally defective draft report released by the Joint Standing Committee on Migration on Australia’s skilled migration program. To say the recom­menda­tions are a disgrace is to be kind.

They are a sop to demanding employer groups and employers who prefer not to find local workers or invest in their training. They involve streamlining migrant entry, removing the need for labour market testing, absolving employers from contributing to a training fund and expanding the list of Priority Migration Skilled Occupations.

It even recommends that the government reserve places on flights and in quarantine for skilled migrants, and that all employer-sponsored visa holders be given a clearer path to permanent residency.

For once, Labor has demonstrated its important role as opposition by issuing a dissenting report. It’s hard to disagree with the comment there that “you couldn’t make this stuff up. It would make sense if the report was released on April 1, but it’s not.”

Joint standing committee chairman Julian Leeser should hang his head in shame. His comment that “we need to bring back skilled migration, to fill essential gaps and to help create more jobs for Australians” simply points to his capitulation to the Big Australia lobbyists and poor bureaucratic advice.

At this stage it’s clear what the government is planning — to learn nothing from the COVID experience, to ignore the wishes of most Australians and to resume high rates of immigration as soon as possible using the veil of meeting skill needs and benefiting the economy.

What the government should do, by contrast, is to reconsider its approach to immigration, not least because it would have some electoral advantages. It is wrong to ignore the costs of immigration — pressure on infrastructure, accommodation and services, lower wage growth and loss of social cohesion, to name a few — while exaggerating the benefits.

It’s all very well placating the interest groups that seek high rates of immigration for their own gain, but the government should do what’s in the national interest. Returning to the pre-COVID situation doesn’t meet that test.