An immigration re-think is well overdue

For decades the major parties have deliberately kept the immigration issue off the political agenda and kept the migrant intake at supercharged levels. But that big immigration bipartisan consensus now looks a bit shakier following comments last week by Labor Senator Kristina Keneally.

In a column for the Nine newspapers, Keneally took aim at Australia's extremely large immigration program, arguing that that the shape and size of the intake had hurt many Australian workers and contributed to high labour underutilisation and low wage growth. She also observed that just adding people was a lazy way to generate economic growth.

Since 2006, net overseas migration has been running at an average rate of nearly 230,000 per year, which is more than double the annual rate of the prior quarter-century. It is also one of the highest per capita immigration rates in the world, making Australia a freak among countries. Australia's total population has risen by around six million since 2000 - a whopping 30 percent increase mostly attributable to immigration.

With unemployment set to skyrocket due to the economic fallout from the coronavirus pandemic, Senator Keneally quite reasonably asserted that Australians should be first in line for jobs during the recovery period and we should not go back to the frenzied immigration numbers of the last 15 years.

Keneally wrote:

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. Our economic recovery must help all Australians get back on their feet, and to do that we need a migration program that puts Australian workers first.

I imagine most ordinary Australians - especially those facing unemployment or under-employment - would find such comments to be eminently sensible. Yet among some sections of Labor and the media, Keneally's remarks prompted bouts of pearl-clutching and point-and-splutter denunciations.

A number of Labor MPs were reportedly "stunned" by Keneally's "jingoistic" comments. Member for Cowan Anne Aly urged Keneally to move away from the "Australians first" rhetoric and implied that Australians really couldn't be trusted to debate immigration without engaging in ugly minority-bashing.

Aly and some of her fellow parliamentarians evidently believe that their prime responsibility is not actually to Australians but to the citizens of all countries. Long gone are the days when all Australian Labor politicians at least pretended to be fighting for the interests of Australian labour. Aly and her colleagues also appear to hold a very low opinion of Australians, seemingly believing them to be latent bigots just itching to spew forth xenophobic hatred at the first opportunity. Never mind that Australians have been remarkably tolerant in the face of dramatic immigration-fuelled demographic and cultural changes that they were never asked to approve.

Sociologist Katharine Betts at the Australian Population Research Institute has extensively studied the vast attitudinal gulf between ordinary Australians and the political elite when it comes to immigration and population growth. Even though many traditional Labor voters want lower immigration, contemporary Labor politicians overwhelmingly favour a higher intake. The latter are drawn from the ranks of the inner-city progressive Left and tend to view any criticism of high immigration as xenophobic and racist. Keneally herself has previously championed high immigration and attacked those seeking a more moderate intake.

Perhaps the economic carnage wrought by COVID-19 prompted Keneally to genuinely re-think her own views on immigration. Whatever the case, this policy shift makes sense politically. Labor desperately needs to make itself relevant again and win back the working and middle class voters who abandoned it in droves at the last federal election.

Even before COVID-19, polls showed that Big Australia mass immigration was well and truly on the nose with the Australian public. With the country facing the most severe economic and unemployment crisis since the Great Depression (one estimate by Roy Morgan already has the jobless rate at over 15 percent), it is not hard to foresee mass immigration becoming politically radioactive. Immigration reduction is a potenially potent vote winner.

Disappointingly, Prime Minister Scott Morrison seemed to suggest late last week that he wanted a return to the pre-COVID-19 mass immigration model. This would be a serious blunder.

For too long successive federal governments, egged on by Treasury, have sought to cheat their way to higher GDP growth through massive immigration. The end result is a "rat wheel economy" (a term coined by economist Leith van Onselen) that has failed to lift the living standards of existing residents. While adding lots of warm bodies may make the economy bigger in aggregate terms, it doesn't make us richer on a per capita basis.

Prior to the coronavirus pandemic, Australia was one of the worst performing developed economies in terms of GDP growth per head. Real wages and household income growth have been stagnant for the better part of a decade. Modelling by the Productivity Commission has shown that the economic benefits of high immigration are chiefly vacuumed up by those migrating and the wealthy owners of capital while incumbent workers are left worse off.

Restarting the giant immigration Ponzi scheme would kill any prospect of a tighter labour market and wage growth in the post-COVID-19 era. It would continue to hinder much-needed productivity improvements. It would also re-intensify pressure on infrastructure, community amenity, housing affordability, natural resources and the environment, and social cohesion.

Australia's infrastructure shortfall has been estimated at around $800 billion. As Ben Power recently observed in the Spectator Australia, frenetic immigration-led population growth has left our health system perilously overstretched and with significantly fewer hospital beds per capita than the OECD average. Australian hospitals have a very limited surge capacity should the coronavirus hit us with a vengeance.

Clearly, the coronavirus pandemic is going to force many changes to the status quo. There's no reason why immigration policy should be exempt. As economist Andrew Stone argues in his book, Restoring Hope: Practical Policies to Revitalise the Australian Economy (released just before COVID-19), the number of occupation categories on temporary and permanent visa skills lists is excessive and should be substantively reduced. This is even more pressing now.

Certain sectors and businesses should no longer be allowed to hold down the wages of Australians and avoid training costs through easy access to foreign workers. Gifting business cheaper labour and more consumers via relentlessly high immigration is a form of subsidy that Australia can no longer afford.

Now is the time to formulate and implement an immigration system that properly serves the interests of the wider Australian community and is actually accountable to Australian voters.