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Judith Sloan

Memo ScoMo: put up the ‘wrong way, go back’ sign

Judith Sloan

Scott Morrison has two major blind spots — on the Paris climate agreement and on immigration.

When the now Prime Minister first became treasurer, he swallowed the Treasury kool-aid that a bigger economy was always better and the easiest (albeit laziest) way to get a bigger economy was to ramp up migrant numbers.

He is completely mistaken to think a bigger economy generates free resources for the government to spend on pet projects — a fallacy he repeated yesterday.

More people require more services and more people do not necessarily translate into higher productivity.

To be sure, the electoral consequences of allowing the population to grow too fast, particularly in Melbourne, Sydney and southeast Queensland, are all too apparent. It’s not just congestion that annoys residents, but the range of urban pressures associated with very large numbers of migrants with poor language skills coming to these cities.

Yet Morrison thinks he has a solution to this dilemma that doesn’t involve cutting migrant numbers. He is completely wrong.

Trusted lieutenant Alan Tudge — the minister for lots of things but essentially congestion-busting — is doing his best to sell a dog of a policy. He wants to force a trivial number of independent, skilled permanent migrants to locate to certain places because these places are crying out for more people and there are jobs to be had. Adelaide, Darwin, Tasmania and Warrnambool are cited by both Tudge and Morrison.

But here’s the thing: if these places really have so many unfilled jobs that can suitably be filled by migrants then the current immigration program settings can fully accommodate this scenario. There is the employer-nominated category and the extra points already attached to these places when it comes to certain visa categories.

It is simply naive to think that this tweaking of the program to direct a handful of migrants away from Melbourne, Sydney and southeast Queensland will make a material difference to population growth rates.

And let’s get real, we don’t construct rabbit fences once people are here. Regional-based visas are very easy to game — set up an address in the region and off you go. Do you really imagine migrants will be deported if they shift to Melbourne?

The real solution is for the government to cut the annual migrant intake significantly — to 120,000 a year, say, rather than the current cap of 190,000 — and to have a firm word with universities about restricting how many international students they accept.

Trying to blame the Rudd government for the current immigration problems is simply lame. When the net overseas migration numbers peaked under the Labor government, it had everything to do with the mining investment boom and large numbers of migrants went to Western Australia.

The Coalition government has had five years to cut the program and has refused to do so. NOM figures for Sydney and Melbourne have been higher in these years than they ever were under Labor.

This is a policy area crying out for a leader to declare: wrong way, go back. It’s just hard to imagine this leader being Scott Morrison.

Judith Sloan
Judith SloanContributing Economics Editor

Judith Sloan is an economist and company director. She holds degrees from the University of Melbourne and the London School of Economics. She has held a number of government appointments, including Commissioner of the Productivity Commission; Commissioner of the Australian Fair Pay Commission; and Deputy Chairman of the Australian Broadcasting Corporation.

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Original URL: https://www.theaustralian.com.au/opinion/columnists/judith-sloan/memo-scomo-put-up-the-wrong-way-go-back-sign/news-story/3725195f68584931e70ab5a928cf7871