Should Australia be keeping people out?

Border security and people smuggling may not be all that the debate over the boatloads of asylum seekers headed for Australia and diverted to Indonesia might suggest.

Behind the dominant debate is a greater social concern with the level of immigration in Australia, coming at a time of a population boom projected to grow by 60 per cent over the next 40 years.

This in an economy emerging from a global financial crisis, with the pressures on jobs, services and the environment, and implications on Australia's way of life, that a population growing to 35 million might imply.

Now Prime Minister Kevin Rudd risks long-term damage in Australia's relations with Indonesia, with asylum seekers anchored off Indonesia refusing to disembark, and local authorities reluctant to go along with an agreement between President Susilo Bambang Yudhoyono and Rudd to process the asylum seekers in Indonesia.

Riau Islands Governor Ismeth Abdullah has been openly hostile to the agreement, proclaiming "we're not a dumping ground for other countries". Indonesia has its problems, not least among them the earthquake in Sumatra last month that killed more than 1,000 people and its own infrastructure needs. 

With Rudd fresh from talks at the East Asia summit in Hua Hin, where he sought to advance his idea of an Asia-Pacific Community, which he proposed in June last year, regional countries are watching how Canberra deals with its neighbour.

"In my view, the asylum seeker debate is a displacement of a greater social concern with the level of immigration in Australia," Australian National University political scientist Dr Lindy Edwards tells the New Sunday Times.

"We currently have one of the highest levels of immigration per capita of anywhere in the world. Australia is changing very rapidly as a consequence."

The government's obvious response to the asylum seeker issue should be to point out the tiny number of people arriving as asylum seekers relative to Australia's formal immigration program.

 But the government does not want to open a discussion on the level of legal immigration, because economically it cannot afford to make the reductions in immigration that would be politically popular.

"This level of immigration is propping up growth in the economy," says Edwards. "One of the reasons we fared so well in the global financial crisis is because there was such enormous pressure on housing that our housing bubble did not collapse in the way that it did in other comparable countries.

"Population growth is a large part of Australia's miracle economy story."