Australian immigration: Growing pains hit home in an age-old dilemma
In the tortured national dilemma around immigration, Rafael and Ana Luiza Huguenin are part of the problem — and the solution.
In the tortured national dilemma around immigration, housing affordability, and congestion, Rafael and Ana Luiza Huguenin show how fine young skilled migrants are simultaneously part of the solution and part of the problem.
The Brazilian couple are the sort of people Australia needs to fill skill gaps at a high level, generate economic activity, pay taxes to support an ageing population and have babies to repeat the process.
Rafael, 34, a mechanical engineer, and Ana Luiza, 31, a bioprocess scientist, had excellent jobs in Rio de Janeiro, in his case working on sophisticated subsea processing in the oil and gas industry, in her case the tricky task of calculating radiation doses for cancer patients.
But Ana Luiza had done some of her studies at Queensland’s Griffith University, and she and Rafael saw this country as a better place for their children than crime-prone Brazil.
“Australia is a very safe place, I don’t feel threatened when I walk in the street, I don’t feel that people will rob us, that people will shoot us,” Rafael says.
Referring to their first child, seven-month-old Marcelo, he says: “He’ll be able to go to the beach with his friends on his own when he’s perhaps 12 years old, something we would not have been comfortable with in Brazil.”
Despite their skills, the process of migrating to Australia was not easy, involving working through stringent requirements and applications before they were granted skilled migrant visas.
“We did all that from Rio,” Rafael says. “It took almost two years to organise everything, my degree needed to be validated by Engineers Australia.”
In 2015 the couple moved to Queensland, where Rafael is Asia-Pacific sales manager for an engineering company specialising in asset integrity in the gas, oil and power sector. Ana Luiza works in a Brisbane biomedical company that makes high-end biological treatments involving creating cells and taking proteins from them.
Rafael says their story shows the real picture of modern immigration in Australia, one of professionals offering their skills when they are just entering their peak.
“If I was over 30 years old (when I applied), I couldn’t have the visa,” he says, adding that they were accepted only because their respective skills were in demand.
He has a lot of Brazilian friends in the professions who have also moved to Australia. “They all contribute to society, paying taxes, and they are good people.”
The statistics show this is indeed the case for skilled migrants — they tick those boxes. Whereas in the early 1980s, skilled migration accounted for only a fraction of total migration, with family reunion the main category, the trend reversed in the mid-90s.
During the past decade, skilled migration has dominated over the family stream by a ratio of about two to one, and in 2016-17 the skill stream accounted for about 124,000 places compared with 56,000 in the family stream.
The family stream is no longer concentrated on bringing in parents, grandparents and siblings, but partners; spouses and fiance visas accounted for 85 per cent of the total in this category.
The top three source countries in the migration program in 2016-17 were India at 21 per cent, China at 15 per cent and Britain at 9 per cent. It reflects a big change from a decade ago when Britain was running a close second behind southern Asia, and Chinese Asia was a close third.
A big risk in the immigration debate is to conflate the skilled migrants category with the humanitarian, or refugee, program.
The outcomes for refugees, particularly in the first year, are for the most part not good; one reason is that on average their education, and ability to speak English, are nowhere near those of skilled migrants.
A 2017 study by the Department of Social Services found of the refugees surveyed, only 16 per cent had a university degree or trade or technical qualification. Only 27 per cent of those surveyed were employed one year after arriving in Australia.
The humanitarian program is not hugely significant in the overall mix — it has averaged about 15,000 arrivals a year in the past decade, well under 10 per cent of the total. By contrast, the skilled migrants get rapidly and successfully into the workforce.
Since 2009, what is now the Department of Home Affairs has run what’s called a continuous survey of Australia’s migrants.
“At the six-month stage of settlement, almost nine in 10 skilled migrants were employed,” the latest survey says. “More than three-quarters were working in full-time jobs and more than six in 10 were in highly skilled employment. Skilled migrants significantly outperformed Australia’s general population (and) had higher earnings on average than the Australian population. A high level of educational achievement contributed to these outcomes. Almost eight in 10 had a university degree, and half had attained an Australian qualification.”
The problem with the rate of migration is the corollary: because the skilled migrants on average have better jobs than the general population, more money and commensurate aspirations, they have a disproportionate impact on the housing market.
The Huguenins live in a rented apartment in Brisbane but are saving for a deposit to buy a home. No one could expect them to do otherwise; the difficulty arising is that there are so many skilled migrants like them flocking to big Australian cities.
Melbourne’s population grew from 3.6 million to 4.5 million between 2006 and 2016, while Sydney’s grew by 700,000 to 4.6 million, and the pace of growth is accelerating.
It’s not all due to immigration from overseas — some of it is interstate migration.
But the key factor in the debate is this: with Australian women having an average of 1.9 babies, marginally below replacement level, there has been no significant natural increase in the Australian population during the past 25 years. So, in the broad, all the expansion of the population has come from overseas.
In a report last month on housing affordability, the Grattan Institute’s head, John Daley, and his colleague Brendan Coates noted: “Since 2005, annual net overseas migration has averaged 200,000 people per year, up from 100,000 in the decade prior.”
During a period of restrained wages growth, Daley and Coates observe, housing affordability has just gone out of sight. “House prices more than doubled in real terms over the past 20 years. Since 2012, house prices have risen 50 per cent in Melbourne and 70 per cent in Sydney.”
This has produced a big social transformation.
“Owning a home increasingly depends on who your parents are, a big change from 35 years ago when home ownership rates were high for all levels of income.”
Daley and Coates cite a survey by the Australian Housing and Urban Research Institute and polling firm Essential showing that during the past four years, housing affordability has jumped from a close second last to second among what Australians regard as the most important issues for government.
In the most recent poll, the health system came first, then housing affordability, beating unemployment, national security and terrorism, tax avoidance by big companies, and the budget deficit, in that order.
The factors driving the alarming housing affordability trend are not just immigration, Daley and Coates say, but “a perfect storm of rising incomes and falling interest rates, rapid migration, tax and welfare settings feeding demand, and planning rules restricting supply”.
Nonetheless, among Daley and Coates’s recommendations one is crystal clear. “If planning and infrastructure policies do not improve, consider reducing Australia’s current migrant intake.”
The Grattan Institute also has done a recent report on urban traffic congestion, by researcher Marion Terrill. In this case as well, the evidence is clear: congestion has got worse in major cities, and the one overwhelming reason is rapid population growth.
Rafael’s engineering company is on the Gold Coast; he drives about an hour each day to work and back, usually dropping off Ana Luiza at her workplace along the way, because it’s cheaper and more convenient than taking the train. Again, it’s quite reasonable, but also again, there are just too many skilled migrants like Rafael who find a car beats public transport for commuting.
In her study, Terrill did some serious work to drill down on whether increased traffic congestion was urban myth or fact, and came to the firm conclusion it was the latter.
Among her data, she tracked the average travel speed on inner-region freeways in Melbourne using VicRoads data, and found they had slowed significantly in a decade.
Across the 10-year period, the evening peak traffic had slowed from about 75km/h to about 58km/h. Asked if she put the congestion down to rapid urban population growth, Terrill responded: “That’s a resounding yes.”
“The population has grown by 25 per cent in Melbourne, and 20 per cent in Sydney over the past decade,” she tells Inquirer. “It’s extremely high … there would not be many cities in the developed world with that sort of growth.”
One might think a pretty logical way of approaching these issues from a federal government point of view would be to have a population policy integrating migration targets with their impact on transport and housing.
A “first best” outcome, Daley tells Inquirer, would be to have “quite a lot” of migration for its economic activity and demographic benefits but build enough housing and transport infrastructure to cope with it.
The third best option, Daley says, is that “you have extensive migration and don’t build enough housing and infrastructure, and people end up paying a lot more for housing than they would otherwise, and the trains are a lot more crowded.
“That is more or less the world we have been in. If you are not going to get the planning right, maybe you tap the brakes on migration.”
But this is a discussion no major party or the Greens are prepared to touch. “I think it’s partly because migration policy has been tightly connected with ethnic policy, and there is a xenophobia issue with it,” Daley says.
This, he says, is absurd — the ethnicity of migrants has no relevance to him or the country as a whole, but politicians are scared to death that someone may make something of it.
Indeed, Greens immigration spokesman Nick McKim has done just that. “Political parties and commentators seeking to blame immigration for congestion and declining housing affordability are missing the point … I suspect this is deliberate, and based on an underlying racism,” McKim has said.
Inquirer put the same set of questions to McKim, Home Affairs Minister Peter Dutton and opposition immigration spokesman Shayne Neumann, asking if they were worried about housing affordability and congestion and if migration should be lowered to help deal with it; if they had a population policy; and, if so, what were their future population targets.
None of the three articulated a population policy, none was prepared to link housing and congestion problems to migration levels, and none would say they would cut migration until the problems were fixed.
Neumann says: “Australians in all cities are understandably frustrated with clogged infrastructure but this is more about the Turnbull government’s poor development and jobs policies rather than current immigration numbers. Labor knows that housing affordability is a huge issue across the country … blame has to be put at the Abbott-Turnbull government’s (ignoring) of warnings to act on unfair and distortionary housing tax concessions and on the risks associated with increased borrowing in superannuation funds.”
Dutton says: “It is simplistic to blame permanent migration and shorter-term visitors for the pressures Australians feel from congestion and other pressures on infrastructure. State governments have a lead role to play in getting the planning arrangements right, yet some have failed to do so.”
Daley says one of the factors preventing governments from acting to cut migration is the business lobby, particularly employers liking a steady flow of skilled migrants, and big developers who make money out of building housing and offices for them.
The lobby group that represents the big developers is Urban Taskforce Australia, whose chief executive Chris Johnson does not deny the companies he represents, like Mirvac and Lend Lease, have a vested interest.
But he points to a bigger issue that demographers in universities and state and federal governments have repeatedly warned about: without substantial migration, the ageing of the population will become exponential in coming decades and place an immense burden on working people in future generations to fund retirees’ pensions and health needs.
Johnson points to a NSW government intergenerational report a couple of years ago. The study found that while 40 years ago there were seven income-earning taxpayers for each retiree, at the time of the report it was down to four, and projecting out 40 years from now, it could end up at 2.4.
“I think what others are missing is this big bubble of older people moving through Australia, moving out of work and moving into the health system to some extent.
“The clear indication was that we needed more migration, fundamentally. You need to boost younger workers earning taxes to keep the country in balance.”
Which, once again, is exactly what Rafael and Ana Luiza are doing, and Marcelo and any other children will do after them.
Rafael says: “We are permanent residents, Marcelo’s born an Aussie, so our family’s future is definitely here.”
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