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."

Economist Sinclair Davidson is among those in favour of Australia taking more refugees, in part on economic grounds.

"Rather than trying to keep people out, we should be looking to bring people in," writes Davidson in Crikey, the online political newsletter.

Davidson is professor in the School of Economics, Finance and Marketing at RMIT University and senior fellow at the Institute of Public Affairs, a right-wing think-tank that might otherwise take an anti-migrant and anti-refugee stance.

Yet a population projected to grow to 35 million in 2050 would present Australia with its biggest challenge since Federation in 1901, says the country's most senior Treasury official.

"Where will these 13 million (extra) people live?" Treasury Secretary Dr Ken Henry posed the question at a business forum at Queensland University of Technology.

He fears Australia will not bear the load - on jobs, services and natural endowments, including water.

Grattan Institute analyst Saul Eslake is agnostic about the benefits of higher population growth. There are "gross" economic benefits in faster gross domestic product growth through retail sales, demand for housing, motor vehicles and the like, but Eslake is less convinced that faster population growth necessarily results in faster GDP growth per capita, "which is the more relevant measure of people's living standards".

"There are costs associated with higher population growth, including traffic congestion, higher housing costs, greater pressure on water supply, possibly greater environmental consequences - the kind of issues Henry was referring to," says Eslake, program director, productivity growth, at the independent think-tank. "And not all of these costs are included in GDP.

"Clearly, Australia needs immigrants, not least to deal with ongoing skills shortages. But fundamentally, I think our approach to refugees should be motivated by humanitarian considerations rather than economic ones." 

Edwards feels it is important to take a balanced and moderate point of view in examining Australia's response to the immigration debate. "It is easy to stoke up old rhetoric about xenophobia," she says. "But I do not think that is a balanced or fair response. 

"In the last 40 years, Australia has become one of the most multicultural societies in the world and has done so on the whole very peacefully and successfully.

"Serious problems have really only started to emerge in the post-9/11 world. The unfortunate shift in political rhetoric has gone hand in hand with very high levels of immigration.

"Nonetheless, I think it is understandable that any country would struggle to adapt to such a rapid change in its cultural landscape.

"I think it is unreasonable to accuse people of being racist because they struggle to cope with their community changing around them so quickly. 

"In my view, this is the discussion that Prime Minister Rudd does not want to have, that is why he is allowing asylum seekers to be scapegoats with all the ramifications that entails."

The key for Eslake is that the groups whose votes determine the outcome of elections - "swinging voters" in the marginal seats on the suburban fringes of the large cities, and in regional areas - are typically strongly opposed to a generous approach to refugees.

And any sympathy for refugees has not been helped by the "tactics" used by some of them, such as resorting to hunger strikes and threats to blow up their ships, in trying to "force" the hand of Australian authorities.