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An immigration re-think is well overdue

By Alex Walsh - posted Wednesday, 13 May 2020


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.

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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.

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About the Author

Alex Walsh is a former public servant and now small business proprietor and postgraduate history student. His writing has previously appeared in the Spectator Australia.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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