Do we really want a population of 40m?

Malcolm Turnbull is fond of asserting that Australia is the most successful multicultural society in the world. He repeated this claim during his recent overseas trip when he accepted the Disraeli prize from the British think tank Policy Exchange.

The prize citation read: “Prime Minister Turnbull has maintained a strong non-discriminatory immigration program, helping to make Australia a land of opportunity for peoples from all around the world. He has also emphasised the importance of immigrants in Australia integrating successfully into the country’s mainstream — by acknowledging and respecting the predominant values of Australian life and society.”

No doubt, some people could query these sentences. How does a multicultural society square with the “importance of immigrants in Australia integrating successfully into the country’s mainstream”?

But leaving aside the normal euphemistic gush attached to these sorts of prizes, can Australia really claim to be the most successful multicultural society in the world?

The Prime Minister notes that “26 per cent of our people were born overseas, in my own city of Sydney the percentage is 37 per cent, and half the population have at least one parent born outside Australia. Our migration nation is also very diverse, with people drawn from every part of the world — the second-most commonly spoken language at home in Sydney is Chinese, the third is Arabic.

“And yet in an age of increasing uncertainty and friction we live ­together, citizens of a free society, in relative harmony.”

It is now appropriate to ask the Prime Minister to defend his assertion that we are the most successful multicultural society in the world because this has become code for the government supporting what is in effect a mass ­migration policy.

Also note that, in 2011, Turnbull made the astonishing claim that “anyone who thinks that it’s smart to cut immigration is sentencing Australia to poverty”.

Here’s a tip, Malcolm: there are plenty of countries without a substantial flow of immigrants and with low rates of population growth that are not sentenced to poverty. Indeed, if you look at the relationship between population growth — in Australia, immigration accounts for more than half of it — and GDP per capita, there is no statistical correlation at all.

But let’s just backtrack to the past century or so. The proportion of the Australian population born overseas fell continuously from the turn of the 20th century to the end of World War II. Virtually all of the immigrants who came to Australia during this period came from English-speaking countries.

After 1946, the maxim “populate or perish” drove government policy and there was an influx of migrants from the Britain, Ireland and Europe.

But between the early 1970s and 2003, there was a long pause in the permanent migration program, with annual numbers cut back. (The long-term average was 70,000 per year; it is now 190,000.) From 2003, there has been a surge in immigrant numbers as well as an influx of temporary entrants, including 457 visa holders, international students and people on a working holiday.

The net overseas migration numbers have varied between 150,000 and 300,000 a year. You don’t have to be very good at arithmetic to realise that we are adding another Canberra in the space of a few short years, or another Adelaide in just a few more.

But here’s an important feature of the flow of migrants: they overwhelmingly go to Sydney and Melbourne, which some would argue are bursting at the seams. And the most common countries of birth of recent immigrants are China and India.

One of the arguments put for such a substantial immigration program — and avoiding poverty is not one of them — is that the ageing of the population can be slowed. But the recent Productivity Commission analysis has dismissed this link: “(Immigration) delays rather than eliminates population ageing. In the long term, underlying trends in life expectancy mean that permanent immigrants (as they age) will themselves add to the proportion of the population aged 65 and over.”

This is one reason why some commentators refer to immigration as a sort of Ponzi scheme: any impact on the age profile of the population is only sustained if the program continues to be ramped up. And note that the PC’s analysis was undertaken before the government decided to provide a special temporary visa category for grandparents.

But what about the economic benefits of immigration? Returning to the analysis undertaken by the PC, by 2060 — a very long time away — it is estimated that per capita GDP will be 7 per cent higher based on the continuation of our immigration program compared with zero net migration.

But the PC makes it clear that no account is taken of the costs that immigration imposes on urban congestion, rising house prices, loss of social amenity or environment impacts. And compared with no net migration, real wages and productivity are actually lower with ongoing mass migration. The economic gains are simply the result of the (assumed) higher employment-to-population ratio.

In sum, it is important that we have a measured and informed debate about our immigration policies, in terms of both numbers and the integrity of the visa categories.

Are people really happy that Australia’s population will exceed 40 million in 2060? Are we really testing for skill when we set the visa categories? Has the migration program simply become a way of allowing universities to charge very high fees to international students on the understanding that the graduates can attain permanent residence?

These are the questions we should not be afraid to pose and politicians should not be afraid to answer.