We’re the big losers in this immigration numbers game

Neither major party seems to be listening to public opinion about the number of new arrivals to the country.

This week the Morrison government announced its intention to reduce the annual cap on new permanent migrants from 190,000 to 160,000. This lower figure will apply for the next four years.

The trouble with the announcement is that an effective cap of about 160,000 has been in place for the past two years. It’s a Clayton’s change — the cap change you have when you’re not having a cap change.

In combination with other announcements, which will mean even more temporary migrants, the government has decided that the population will continue to grow at a rapid pace, mainly as a result of immigration.

Rather than act on a very clear message from the public that the migrant intake should be cut, the government has preferred to appease various sectional interests while pretending otherwise. We should expect better, even of a government in its last throes.

The bigger picture is that there has been a significant disintegration of the broad consensus on immigration — you could call it a settlement — that was achieved by prime minister John Howard. This consensus involved strong border protection preventing the entry of illegal migrants while expanding the pathways for legal migrants to enter and stay in the country.

For a while this worked well. Let us not forget that the number of permanent migrants went from about 90,000 per year when Howard was first elected to close to 160,000 when he left office. Nonetheless, the public’s generally favourable view of immigration and high migrant intakes persisted for some time.

In more recent times, however, there has been a marked shift in the public’s view on immigration and the related issue of population growth. I won’t go through all the results of these surveys — it would take too long — but let me mention some of the sources: Newspoll, Essential Research, Lowy Institute Poll, Scanlon Survey and the Australian Population Research Institute.

To give you a flavour, last year’s Lowy poll found there had been a 14 percentage point jump from the previous year in the proportion of respondents who agreed that “the total number of migrants coming to Australia each year is too high”. A majority (54 per cent) now agrees with this statement.

A poll conducted by Essential Research last year also found that 54 per cent of respondents thought Australia’s population was growing too fast (only 4 per cent thought it was too slow) and 64 per cent expressed the view that the level of immigration had been too high during the previous 10 years. The poll found 37 per cent thought the level of immigration was “much too high”.

Let me also just touch on a recent Newspoll survey in which the respondents from NSW were asked: “When thinking about the population of NSW, would you like to see the population of NSW increase, stay about the same or decrease?” Note that the question was not about population growth but about the level of population.

A mere 16 per cent stated that they wanted the population to increase. About 55 per cent wanted it to stay the same and a quarter wanted it to decrease. Bear this in mind, there is no way that the population of NSW is about to stay the same given natural increase and the migrant intake.

To tease out the reasons for this shift in attitudes towards immigration, the key is to look at the figures. To be sure, the lift in the permanent migrant intake that has occurred across time was always likely to cause some members of the public to query the change. But another factor is the explosion in the number of temporary entrants during the past 15 years. Traditionally, temporary migration was insignificant in the scheme of things. Migrants came to the country to settle or not at all, with the exception of visitors.

In more recent times, the number of international students, working holidaymakers and temporary workers has exploded. About 700,000 international students are in the country and it is estimated there are more than two million temporary migrants with work rights.

The best summary measure of the movements of migrants, both permanent and temporary, is net overseas migration, which is published quarterly by the Australian Bureau of Statistics. The figure includes arrivals and departures of those migrants who have lived in Australia for at least 12 months out of 16 months.

In the 10 years ending in 2005, the annual NOM averaged 105,000. Since then, the NOM has averaged more than 220,000. In other words, the NOM has more than doubled, which undoubtedly is behind the public’s growing opposition to immigration. The latest figure for the NOM (for the year ending in the September quarter of last year) was 242,000.

Note that net overseas migration accounts for more than 60 per cent of the growth in the population. Australia has one of the highest rates of population growth among developed economies, with the population growing at close to an extra 400,000 people a year. This is more than Canberra’s entire population.

Moreover, the pattern of growth is not even across the country. In Victoria, the population grew by 2.2 per cent in the year ending in the September quarter last year compared with a figure of 1.6 per cent for the country as a whole.

Given that all the evidence indicates the consensus position on immigration — endorsement of high rates of immigration in the context of strong border protection — has crumbled, how have politicians reacted? The main response has been denial, leading to a continuation of current policy settings, which encourage high rates of migrant intake.

This has been particularly noticeable in relation to the Morrison government’s refusal to countenance any substantive cut to the migrant intake or to place any restrictions on the entry of temporary migrants.

While conceding that high rates of population growth impose significant costs on residents — think congestion, overcrowded schools and hospitals, loss of urban amenity and the like — the government has not been prepared to make any noteworthy adjustments to the core features of its immigration policy.

There is a faux appeal made to the supposed economic and fiscal benefits of immigration. The economics of immigration are quite clear: the overall economic benefits are relatively small; they take many years to emerge; and in the meantime productivity is lower as more workers enter the market before the capital stock adjusts.

Moreover, the benefits of immigration are largely captured by the immigrants themselves as well as by the owners of capital and employers.

The truth is that immigration is not really about economics; it’s about the kind of society we want. Do we want a big Australia with very large groaning cities or do we want a medium-sized country with an enviable lifestyle?

Do we want our politicians to act in line with the preferences of voters or to cave in to the pleas of vested interests (big business, property developers, universities, employer associations, some ethnic groups) when it comes to formulating immigration policy? It’s clear what we’ve got from the Morrison government; it’s less clear what a Shorten government would deliver.