What’s worse than the constant, self-serving urgings is that these interest groups clearly have the ear of most politicians at all three tiers of government.
The international travel restrictions imposed since the beginning of February have severely curtailed the arrival here of anyone without permanent residence.
Net overseas migration (long-term arrivals over long-term departures), which hovered about 250,000 annually for more than a decade, is estimated to have collapsed about by 85 per cent. According to Scott Morrison, “we’re looking at net overseas migration falling to 34,000-odd”.
Judged by multiple surveys — Newspoll, the Lowy Poll, the Scanlon poll, Essential Research, the Australian Population Research Institute — this fall will be one outcome of the pandemic welcomed by most of us.
Sadly, it seems the federal government, which controls the migration program, is keen to resume high levels of migration as soon as possible. Migration has been about two-thirds of population growth and we have one of the highest rates of population growth among developed economies.
Curiously, in his National Press Club address last week, the Prime Minister cited “the great professor” Peter McDonald to claim the optimal NOM is between 160,000 and 210,000 annually.
Evidently this is the figure required to maintain per capita GDP growth. But McDonald is a demographer, not an economist. The estimate is based on a long-term demographic model using old data. In the past decade, per capita GDP has gone nowhere despite high levels of NOM. Also, McDonald’s research conflicts with other studies. The work of the Productivity Commission, for instance, highlights that any positive impact on per capita GDP of migrant intakes is very lagged — there is dilution of the capital stock in the meantime — and that almost all the benefits are captured by the migrants themselves.
The concern is the Treasury is selectively feeding Morrison studies supporting a Big Australia. Let’s face it, Treasury’s reputation has taken a severe battering after the JobKeeper costing error. I guess the newly created Centre for Population created within Treasury at a cost of more than $23m has to do something. (The alternative is to close it down and use the resources to improve Treasury’s costing capacity.)
Most strongly arguing for a resumption of high migrant intakes — possibly before Australians can travel overseas or even cross state borders — are the universities and the property industry.
Lobbyists arguing this case are not concerned that new migrants may take the jobs of Australians at a time of high unemployment. Nor are they worried that the source countries may be best served by keeping their skilled workers and students. Commercial interests are at stake. The strategy is to conflate these interests with acting in the national interest.
Universities Australia developed a plan to allow international students into the country but requiring them to undertake a two-week quarantine. Astonishingly, Victorian Liberal Opposition Leader Michael O’Brien even suggested the state’s taxpayers should bear the cost of the quarantine.
The big-city mayors back the idea. Concerned about the emptying ugly towers in the various CBDs in which so many international students reside, these mayors are keen to see their cities restocked with students many of whom are motivated by the hope of securing permanent residence when they complete their studies.
All this is notwithstanding that only about 20 per cent of enrolled international students are stranded overseas. In any case, some of them are continuing studies online. All this tells us that universities and other education providers have become dependent on international student fee income. Any minor deviation from expected revenue and all hell breaks loose. Capital works are put on hold, discretionary spending is pruned and job losses forecast.
A large chunk of these enrolled international students is likely to seek to complete their studies. And those not in the country will probably return.
The key issue is whether the demand from international students for Australian educational offerings can or should be sustained in the future. The economies of the largest source countries for students, including India, Nepal and Brazil, have been hit for six by the pandemic.
And there are doubts Chinese students will continue to come at past rates given geopolitical complications of recent months. The economic damage of the pandemic in China is also a factor here because many of our students from China are from families running businesses; the party elite send their children to prestigious universities in the US and Britain.
A sensible approach would be to plan for significantly lower student numbers and fee revenue, and to concentrate efforts on providing value to domestic students while selectively improving research. The federal government could also cap international students as a proportion of the total — 10 per cent to 15 per cent sounds reasonable. In return, the government could offer the sector funding assistance to restructure.
The property sector — and be mindful of the connection, in part, with international students — is concerned that lower population growth will reduce the demand for new housing and other construction. There have been calls for substantial subsidies for new housing as well as fast-moving approval processes to bring forward projects.
Unsurprisingly, the Victorian government recently ticked off three high-rise towers, noting the importance of the (unionised) construction sector. Whether more high-rise building will be required in a post-pandemic world remains to be seen.
The bottom line is that economic shifts are inevitable as we begin to emerge from the strict lockdowns. Some sectors will shrink — not entirely a bad thing. Hopefully, other sectors can grow to fill the gap. It’s important always to differentiate between self-interest and the national interest.
Hail a new shepherd and father for the church
Religious leaders such as Leo XIV transcend the usual left-right binaries. Indeed the relatively quick decision of the cardinals suggests the talk of entrenched positions was rather overblown.
Tech elites are dumbing down the ‘smart’ house – why you should too
Nobody wants their house to eavesdrop or be stuck on the phone to tech support at midnight when the lights won’t turn on.
Promoters of a Big Australia never give up, irrespective of the circumstances. Strong economic growth? We need more migrants. Weak economic growth? We need more migrants. The answer is always the same.