This appeared last week:
Time to bust the migration paradox
· 12:00AM May 4, 2024
Australia has an economic model that depends on high immigration – and it is past time the flaws in this system were confronted as the Albanese government desperately tries to wind back our unsustainably record high migrant intakes in the post-Covid period.
The magnitude of Labor’s immigration misjudgment is alarming. Australia is a remarkably tolerant nation but its tolerance is being pushed to the limit.
In the year to September 2023 the increase in net overseas migration was 548,800 and this compares with our natural increase (births over deaths) of just 111,000 – so for the year in question immigration ran at about five times the natural rate.
The surge is a function of mistakes in the post-Covid period when an inflow of students and temporary workers was bound to take off. You can be a strong supporter of immigration but still grasp the current intake is untenable given the many downsides – economic, social and political.
For the above year the total increase in Australia’s population was 659,800 people, or an increase of 2.5 per cent, in just 12 months. The 548,800 overseas migration figure was a 60 per cent rise on the previous year. Unsurprisingly, Anthony Albanese has pledged to halve the net migration intake.
Home Affairs Minister Clare O’Neil says changes to reduce the intake have been put in place, notably in the overseas student intake and reforms to fix what she says is the “broken system” that Labor inherited.
Australia’s immigration policy faces two challenges – moving beyond the wild gyrations induced by the pandemic’s legacy and then, critically, deciding what normality looks like in the aftermath. It is no surprise that in this transition migration policy bipartisanship has been terminated.
But the old pre-Covid normality won’t do. Australia faces four conundrums in its population future. First, record low fertility, now 1.78 births per woman – well below population replacement at 2.1 – drives strong long-run momentum for immigration. Second, high immigration has become indispensable to economic growth and for more than a decade immigration has substituted for productivity in delivering the economic growth we need. Third, this substitution means Australia has growth without prosperity because the real income increase per person across a decade has been grossly inadequate (that’s when it avoids being negative), leading to public frustration and anger. Fourth, the fusion of weak income growth combined with high immigration and the rise of identity politics puts social cohesion on the long-run road to turbulence, as evidenced in other Western nations.
Jim Chalmers spent this week describing how Australia faces a world transformed – geostrategic risks, weaker global growth, the climate transition, technological disruption, huge industrial subsidies and the fusion of economics and security. But one event the Treasurer missed (not his job) is the unravelling of social cohesion courtesy of weak income growth, rampant inequality and the identity politics revolution that aims to terminate the principles of Western liberalism on which multiculturalism is supposed to be based.
The nation stands at a crossroads. Australia’s high immigration, low productivity, social cohesion model doesn’t work anymore. As part of the Chalmers’ old world scenario it is slated for extinction. Something has to give in this three-way contradiction. Take your pick. The denial in government and policy circles is near absolute – Australia is a country that can’t see what’s staring it in the face. We nurse our orthodoxies as they die before us.
Measured in per capita terms Australia has been struggling through a series of negative growth quarters – and weak productivity combined with high immigration is no long-run answer.
At the same time Labor seems convinced that the social cohesion from multiculturalism is ingrained in our character – rather than the unique product of remarkable forces.
On display today is the shredding of the multicultural principle – having one group of Australians preaching hatred against another group of Australians as political leaders stay silent or issue pious declarations under the misapprehension that the distress will be a passing phase.
In his recent Cook Society address, Liberal MP Julian Leeser named the two intellectual and moral poisons with the potential to destroy multiculturalism: “The first is the modern idea of privilege and the belief that certain races embody privilege. The idea of Jewish privilege has become the Protocols of the Elders of Zion for the 21st century. Its central premise is that if you want to tackle ‘white privilege’ you must start with ‘Jewish privilege’.”
The protests at universities and schools reflect a vision of the world divided into two groups – the oppressors and the oppressed – with people to be treated separately on this basis. The second idea is that Jewish Australians must be held to account for the actions of the state of Israel – when, as Leeser says, nobody holds the local Chinese community responsible for the fate of the Uighurs, the Russian community for Vladimir Putin’s violence or the Persian community for Iranian suppression of women.
Our leaders and our elites seem not to comprehend, maybe wilfully, that the attitudes being promoted in the protests have their origins within the academy and are founded in a moral concept and intellectual view of society that threatens the core of the liberal multicultural society. This is not just about Palestine; it is about us. Yet our elites engage in useless platitudes and our Labor government, sadly, seems intimidated by electoral politics and the Muslim vote.
This occurs in the context of a high immigration model no longer working properly, with the poor economic outcomes now beyond dispute and reinforced by huge generational divides in the housing market. Everyone talks productivity but productivity is the elusive ghost. No worries, the immigration intake is the easy fix.
The worst kept secret in politics is that the opposition under Peter Dutton intends to make immigration and social cohesion into a key issue at the next election. Nobody could miss this invitation.
Opposition immigration spokesman Dan Tehan tells Inquirer the public isn’t happy. “What the figures show, whether Labor is committed or not, is that a Big Australia is what they are delivering,” Tehan says. “They’ve brought to Australia well over one million people in the first term of the Albanese government. We’ve never seen numbers like that.
“The public is getting more and more concerned. The question that’s always put to me when I say they’re on track to bring in more than a million people is: Where are they all going to live? And the government has no idea.
“Immigration will be one of the key issues at the next election, a frontline political issue. Anthony Albanese gave every signal he wanted to keep migration low but then turned around and did another thing after he was voted in. He brought into the country the largest number of people in one term in our history.
“There will be a stark difference between ourselves and the Labor Party. We think immigration needs to be lower and sustainable. We are working on what we need in terms of skills and where we are with housing, rents and infrastructure. We will be running a much lower program.
“I believe the Australian people are concerned about the lack of social cohesion, it’s something that is raised with me more and more. Governments have a key role to play here. Yet we see a complete lack of leadership from the Prime Minister, with his unwillingness to call out anti-Semitism being the greatest example.
“We’ve also seen an unwillingness to lead when it comes to reassuring the community that the government is taking every step to ensure our communities understand the importance of social cohesion.”
O’Neil repudiates the Big Australia accusation. The Home Affairs Minister tells Inquirer migration is too high, fuelled by the catch-up in international students post-Covid and the strong labour market. “The problem with the migration system is not just the size,” she says. “When we arrived in office, the system was not strategic, not sufficiently selecting for the skills we need. Our migration strategy is a huge shift in thinking – to build a smaller, more strategic and better planned migration system.”
In December last year Labor outlined its reduction forecasts – net migration would be reduced to 375,000 in 2023-24 and then to 250,000 in 2024-25. There would be hardship in the process, since the 2022-23 outcome was a huge 510,000.
At the time O’Neil said of the reductions: “It’s not a target, it’s an estimate.” She warned: “It is going to take vigilance from me and Minister Giles to meet these numbers.” That’s an understatement. Migration experts predict the 375,000 forecast is a completely lost cause and that tougher decisions will be needed to reach 250,000. Significantly, O’Neil tells Inquirer “we are on track” to halve net overseas migration – that means meeting the 250,000 forecast. In any autumn 2025 election, that forecast becomes a non-negotiable political flashpoint – with immigration as an issue Labor cannot afford not to meet it.
The bigger issue, however, is Labor’s implication that 250,000 is the new norm. Certainly it will become the benchmark against which the Coalition pledges a reduced intake and, given Tehan’s pledge about a “stark” difference, that surely means a significant cut.
Tehan says: “Halving the number to 250,000 is still an incredibly high number historically. We need to deal with here and now, migration is still growing, that figure of 100,000 growth for February alarmed a lot of people. What confidence can we have in Labor managing immigration? None.”
Asked how he saw the immigration norm, Tehan says “it was about 180,000 in the previous decade” but figures provided by the government on net overseas migration show different results – taking the three years before the pandemic the annual average was 248,000 while taking the previous six years it was 220,000.
Independent economist Saul Eslake, in a recent assessment of global migration trends, found Australia, Canada and New Zealand have all experienced a migration surge – the most pronounced for more than 70 years – dominated by international students and temporary workers. In Australia the historical evidence is clear: migrants have made a net positive contribution to the economy and are likelier to be employed than the native-born.
Eslake tells Inquirer: “If you look at headline GDP growth Australia did much better than the OECD average from about the turn of the century to 2020. But that was only because our population growth also exceeded the OCED average. If you look in terms of per capita GDP growth, particularly in the decade ending 2020, we were actually slightly below the OECD average. And that’s now happening in spades.
“We have come to rely on immigration to drive economic growth. Part of why we do this is to cover up the failings of our education and training system. If our education and training system was producing people with the skills the economy needs, we wouldn’t need to rely so much on immigration and, in that situation, our productivity growth would be higher.
“This stands out in Victoria. It goes back a long time, pre-dating Daniel Andrews, with Victoria having come to rely on immigration more than any other state, particularly on international students. As a result Victoria has become a poor state. That’s something most Victorians don’t realise, as measured by per capita gross product or disposable income per head. Victoria is now in the bottom four states along with Tasmania, South Australia and Queensland, rather than in the top two.”
Eslake warns that in the coming world “immigration flows are likely to raise increasingly complex and difficult issues for high-income countries”. Many factors will come into play including climate change, the blurred distinction between economic migrants and asylum-seekers, security issues, wars and geo-strategic rivalry that will generate domestic tensions along racial, cultural and religious lines. This is now obvious in most Western nations including Australia.
Australia still possesses a major asset – being an island continent it can control its borders and the national government can determine the number and quality of legal migrants. But the task of maintaining public support for high immigration will get far more difficult. The pandemic along with the “new world” transformations identified by Chalmers guarantee this – any idea such defining events will leave immigration untouched is absurd.
Both O’Neil and Tehan say retaining public support for immigration is essential. But, whether Labor or the Coalition is in government, that demands far-reaching changes. The pandemic and the world of intense power rivalry will constitute a departure point in immigration management and attitudes. There will be no short-term solution to tensions from the generational divide in the housing markets.
Yet migrants will be increasingly needed in a range of expanding skilled areas, and notably in health, aged care and jobs the native-born refuse to do.
Eslake says: “Immigration levels over the past two years are not just unsustainably high but at that level they risk a much bigger anti-immigration political constituency than Australia has had traditionally. I would think an immigration level around 200,000 is probably about right at the moment.”
The depth of general support for immigration and multiculturalism is an Australian strength that needs to be preserved. But the cultural transformations under way will be challenging – the wide acceptance of identity politics, the ideology of “oppressed and oppressed” classes, the concept of a white privileged Australian ruling group and the rise of extremists, both far-right racist groups and Islamist extremists.
The conflict in the Middle East has likely entered a new plateau of greater intensity that will accentuate domestic divisions in Australia. The principles defining a multicultural society are being undermined almost daily, not at the margins but in our institutions, with plenty of examples – witness the Greens political party, the cultural sector and our leading universities.
In his Cook Oration, Leeser identified the corrosion of our once universal, equal and multicultural values. He says Jewish Australians are being typecast as symbols of privilege: “If you judge the actions of various state police forces, the Australian Human Rights Commission, and most of the equality, diversity and human rights apparatus that exists in this country, Jews – even when their physical security is threatened – are not worthy of any form of protection.”
We are witnessing a moral failure of elite leadership in Australia. Dutton was correct when he said this week the vilification of the Jewish community would not be tolerated if another group were the victims – Indigenous people, the Islamic community, Indians or Chinese.
As Leeser says, we now accept that racism is no longer treated as a truth, just a tactic to be deployed for political gain.
The tension between the Coalition and the universities is sure to deepen.
As Tehan says: “Our universities have a serious role to play in social cohesion, yet we see no leadership from them. We need to see the chancellors and vice-chancellors step up. There’s just a deficit of leadership on this issue.”
Here is the link:
https://www.theaustralian.com.au/inquirer/time-to-bust-the-migration-paradox/news-story/0c1e58dbaa60f2e928cc6d792c120fbb
I really wonder just what 250,000 to 500,000 permanent settlers are going to do to our various health services. Already we are seeing hospital, aged care and mental health services really struggling to cope and because of the time taken to stand up these services. It is going to get way worse before there is any improvement I suspect!
Skilled professionals in these sectors are in heavy demand around the world and that fact will surely not help solve the problem!
We need more skilled health migrants and we need to be training more health professionals here to keep up as well.
I fear this will be an issue for a decade or two at least.
David.
