Australia’s dependence on immigration faces its biggest economic test

Canada will face a similar test with respect to its multi-immigration plan that planned on 340,000 new permanent residents in 2020 and further annual increases in subsequent years, with immigration being responsible for virtually all population growth and thus a major contributor to economic growth:

Australia’s dependence on immigration to grow the economy is about to be sorely tested.

One of the secret ingredients to Australia’s unparalleled run of economic growth since the country’s last recession has been strong population growth.

While local mums have played their part in swelling the number of locals, the heavy lifting has been done by people from nations such as China, India, Britain, New Zealand and the Philippines who have decided to call Australia home.

Over the past decade, the nation’s permanent population has grown by 3.7 million to more than 25 million. Of that increase, 60 per cent was due to net migration.

That extra 2.2 million people have been an economic powerhouse, requiring homes, cars, food and every day goods and services while also contributing fresh skills to the jobs market.

But it has come at a price, particularly in Sydney and Melbourne. Be it via higher house prices or over-crowded schools, all levels of government have struggled to keep up with the demands of a growing population while reaping the economic benefits of that population.

The Morrison government made much of its decision in last year’s budget to cap permanent migration at 160,000 for four consecutive years as dealing with the congestion pressures on our big cities.

That cap didn’t include the hundreds of thousands of temporary migrants – be it students or workers – who help run the economy and add to demand.

But with the borders shut, international students stuck in their home countries and immigration all-but impossible, the issues around migration and Australia’s dependence on it cannot be ignored.

The government is now expecting net overseas migration – which was forecast to reach 271,000 in 2019-20 – to be 30 per cent lower. Next year, the drop is tipped to be 85 per cent.

Combined, that’s close to 300,000 missing shoppers, students, family members and skilled workers from the economy.

With temporary workers leaving the country and others unable to get in, population growth is likely to stall. Sydney could shrink while Melbourne’s stellar growth of recent years will be muted, with serious economic repercussions.

Australia will, post-virus, remain a desirable destination for permanent migrants, temporary ones and international students.

The Morrison government’s economic rebuilding plan will have to include a discussion around the nation’s dependence of immigration.

Source: Australia’s dependence on immigration faces its biggest economic test

Internal debates in the Australian Labour Party:

Kristina Keneally’s call to give Australians “first go” at jobs by cutting temporary migration has won cautious support from unions but divided Labor MPs who are worried the home affairs spokeswoman was freelancing with policy aimed at more conservative voters.

Several of Senator Keneally’s colleagues privately voiced frustrations on Sunday about her decision to write an opinion piece arguing against the “lazy approach” used by governments to prop up economic growth through immigration and suggested that the overall migrant intake could be less under Labor. Other MPs publicly defended Senator Keneally, arguing that Australia’s use of temporary migrants was a debate that needed to happen as the nation recovered from the coronavirus crisis.

In an opinion piece for The Sun-Herald and The Sunday Age on Sunday, Senator Keneally said Australian workers must “get a fair go and a first go at jobs”, and the country had an unprecedented chance to overhaul the immigration system, particularly the temporary worker intake which was not capped. It was not the first time Senator Keneally has called for the government to look at temporary migration, but it was her strongest suggestion yet that the overall number of migrants would be lower under Labor.

“The post-COVID-19 question we must ask now is this: when we restart our migration program, do we want migrants to return to Australia in the same numbers and in the same composition as before the crisis? Our answer should be no,” she wrote.

Australian Council of Trade Unions secretary Sally McManus said on Twitter that too many employers had used the temporary visa system to avoid hiring local workers and were exploiting people whose visa status and security depended on their employer. Ms McManus argued this had led to systematic wage theft. Victorian Labor MP Ged Kearney, former president of the ACTU, told The Sydney Morning Herald and The Age she welcomed the debate on whether to overhaul the immigration system.

“I think we really do need to have the conversation and get the balance right – and it may need to be a lower overall intake, but the focus should be on temporary migration and increasing permanent migration,” she said.

Immigration is a vexed issue for Labor with the party occasionally being accused of over-compensating in response to Coalition attack campaigns over border security. Bill Shorten, when he was leader in 2016, caused controversy with an “Australia First” television advertisement which featured almost all white people and pledged that Labor would “build Australian first, buy Australian first and employ Australians first”.

Multiple senior Labor sources confirmed the issue of whether to restart a debate on the size and composition of Australia’s immigration program had been discussed at shadow cabinet level but no decision had been made on a change of policy. Opposition Leader Anthony Albanese did not respond to a request for comment.

“This is still just Kristina’s view at this stage, not the party’s,” one shadow cabinet source said.

Senator Keneally, who emigrated to Australia from the US, also caused frustration among senior Labor MPs because they were blindsided by her opinion piece. It wasn’t featured in the original talking points circulated by Mr Albanese’s office to MPs on Sunday morning. A second round of talking points – the party’s message on the topical issues of the day – was sent out later in the day which included Labor’s position on immigration.

One Labor MP from the Left faction, which tends to support a more-open approach to migrants and refugees, said they were concerned about being accused of “dog-whistling”.

“We don’t have a problem with the call to look at temporary migration, but we don’t have to sound like Peter Dutton while doing it,” he said.

Another Labor MP said: “This is a very sensitive issue. The ALP has torn itself apart over this issue in the past. This is an issue that needs to be handled very sensitively.”

Labor’s education spokeswoman, Tanya Plibersek, said immigration was an important part of Australia’s multicultural make-up, but Labor’s view had always been that the number and composition of the intake should be in the national interest.

“Immigration is a really important part of our economic success story. One of the reasons the Australian economy has been growing at all, frankly, in recent times is because of strong immigration numbers,” she said.

Victorian Labor MP Julian Hill said the COVID-19 crisis had exposed the Morrison government’s failure in migration policy, “and in particular the massive explosion in temporary migration”.

“Morrison has tried an enormous con job trumpeting a fake cut to migration, which is really just sleight of hand cutting valuable permanent migration while lower skilled permanent migration explodes,” he said.

Acting Immigration Minister Alan Tudge accused Senator Keneally of not having a consistent position on temporary migrants.

“She wants to give temporary migrants welfare payments so they can stay in Australia, but now says she doesn’t want temporary migrants,” he said.

Senator Keneally said in her piece that although migration would be a key element to the way the Australian economy recovered from the pandemic, changes had to be made to the current system which had resulted in an over-reliance on temporary workers.

The setting of limits on the migrant intake may be moot point for years with Australia’s immigration to take a serious hit coming out of the coronavirus pandemic.

Prime Minister Scott Morrison last week revealed Australia’s net overseas migration numbers would drop by 85 per cent in the 2020-21 financial year, compared to 2018-19 numbers.

Source: Labor internal angst at Kristina Keneally’s call to lower immigration

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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