For generations our leaders have done the right thing by Australia on population. They strongly supported high immigration, and did so despite great reluctance from voters for it. From Ben Chifley through to John Howard, they resisted the narrow-minded temptations of Little Australia.
The postwar political consensus that gave us high immigration was the first great economic reform of the modern era, one that created the demographic platform for a high-growth economy once it was opened to competition in the 1980s. It’s a reform that continues to generate prosperity to this day. And Kevin Rudd followed the same path, maintaining high levels of immigration and committing himself to the idea of a Big Australia.
Is he the last of a proud tradition?
Perhaps Julia Gillard — who reminds me much more of John Howard than Kevin Rudd ever did — will, like her Liberal predecessor, talk the talk of anti-immigration but quietly oversee a continuation of former policies. Perhaps Tony Abbott is merely being opportunistic and will adopt his mentor’s approach of a strong immigration program if elected.
But the bipartisan consensus on high immigration has been broken, and there’s no clear path back to it. John Howard as Prime Minister never faced pressure from Labor to curtail immigration, not even when One Nation was pushing the issue from the Right, or when Howard was providing a back door for temporary migrants on student visas to jump the queue and obtain permanent residency.
But the Liberals under Abbott and his loathsome innumerate of an Immigration spokesman, Scott Morrison, have abandoned their policy in Government and embraced Little Australia. Labor has seemingly decidedly it has no choice but to follow them -– though not with reluctance, but with apparent relish, complete with attacks on Kevin Rudd for “hurtling toward a Big Australia”.
Either our politicians are opportunistic hypocrites, or they’ve embarked on one of the biggest economic policy debacles in modern Australian history.
As Michael Pascoe explained succinctly last week for Fairfax, cutting immigration is a recipe for higher interest rates in the shorter term as we run out of workers and higher taxes in the longer term as our population ages.
The Little Australia brigade have no answer on these issues. For a country that has 5% unemployment amidst a lingering global economic malaise, lower immigration necessarily means fewer workers, higher wages, higher inflation and higher interest rates. Lower immigration means fewer workers per retiree in decades to come and higher taxation on top of higher inflation and interest rates. That’s the mathematical reality that all the talk about “sustainability” and “Australia is full” stickers on utes can’t hide.
That’s not to say there isn’t some dissembling on both sides of the debate. Let’s be clear about the motives of the business community: it wants a larger pool of workers not just to fill skill shortages, but to undermine unions and keep wage pressures down. Business instinctively dislikes the idea of lower immigration because fewer workers mean having to pay their employees more to hang onto them, and having to invest more in training.
Except, as we saw during the boom years before the GFC, even historically high rates of immigration and hundreds of thousands of temporary workers couldn’t prevent skill shortages and low rates of unemployment. If business thinks high immigration means it won’t have to reward staff well and invest in their development, they’re kidding themselves.
But the economic argument isn’t the only rationale for maintaining high immigration. There’s a strong moral case. Nearly all Australians are the children or descendants of immigrants. To demand a slashing of immigration is a staggering example of inter-generational opportunism on our part, in effect denying to future immigrants and their children the advantages that we ourselves have accrued as the result of the generosity of generations past.
The Little Australia advocates want to preserve Australia in amber, to prevent it from ever changing, because change is threatening. Gillard and Abbott like to say they’re not afraid of the future, but their professed stances on immigration reflect exactly that sort of fear.
It’s the same sort of thinking that reflexively opposes real economic reform because it leads to restructuring and job losses in some industries and growth in others. The mindset that sees only risk, not opportunity.
The best contribution to the population debate so far came on Wednesday from the unfairly maligned Ken Henry. Henry, as reported yesterday by the AFR, told a business lunch that he felt the key first step in addressing issues around regional population imbalances was to address the range of areas where economic growth is being constrained, often at a local level, by interventions that prevent markets from operating effectively.
Henry correctly nominated water, where a national market is slowly developing despite of the best efforts of the states, in addition to the more frequently nominated areas of infrastructure. But it also applies to housing, where approval processes are an important constraint on the market responding to high demand.
By pricing externalities, such reforms can help address the sort of sustainability issues that Little Australia advocates frequently hide behind. Infrastructure provision becomes easier when there are genuine price signals for its use. Carbon emissions can be reduced when polluters and their customers start paying for them. A better mix of public and private transport is achieved when motorists have to pay for the congestion they cause. Industry becomes more efficient at using water when it is priced appropriately and in recognition of the need for environmental flows.
But the Little Australia mindset resists difficult and complex reform because it fears change, while incessantly demanding that governments do something to address existing problems.
And the surrender to small-mindedness comes at a time when Australia should be exploiting the poor economic management of other developed countries to pick the eyes out of their skill bases. Across Europe and the anglosphere, there are millions of highly skilled, well-educated men and women whose potential isn’t being used, and won’t be used for years to come, until Western economies return to strong growth, if they ever do. We should be encouraging these people to make new homes in Australia, where we’ll put their talents to use and reward them well.
The craven retreat from immigration by Tony Abbot and Julia Gillard is a policy disaster of the first order. And it’s one for which generations of Australians will pay.
Well said!
Perhaps Little Australia as a catchcry reflects their intellect as well as their ideals
I disagree on 2 grounds.
The world’s population is too big and Australia shouldn’t contribute to even bigger population growth.
Keane’s economic argument leads to an infinite regress: increasing Australia’s population increases demand for labour and other resources which needs to be met by further increasing the population. It is possible to grow the economy without growing the population by increasing productivity.
The demographic and other imbalances can be met by restructuring the economy which would be no more painful than the pain of increasing the population.
Nice read Bernard, but mostly ordinary. This especially:
“But it also applies to housing, where approval processes are an important constraint on the market responding to high demand.
By pricing externalities, such reforms can help address the sort of sustainability issues that Little Australia advocates frequently hide behind. Infrastructure provision becomes easier when there are genuine price signals for its use. Carbon emissions can be reduced when polluters and their customers start paying for them. A better mix of public and private transport is achieved when motorists have to pay for the congestion they cause. Industry becomes more efficient at using water when it is priced appropriately and in recognition of the need for environmental flows.”
Housing has been a growing problem for decades. As has transport infrastructure. The recent attempt at carbon pricing was such a disaster that it initiated the downfall of the elected PM.
Successive failures from governments at all levels has left the Australian populace disillusioned with the ability of leaders to handle a growing population, aside from existing infrastructure issues.
But you say “we can do it”. Only someone so utterly ensnared by the bureaucracy would believe such rubbish. You can tell that you’re a former public servant.
Yes Bernard – good to have you on board the reality wagon! Small Australia will leave our nation as a kind of giant retirement home.
And as I’ve argued elsewhere, ‘sustainability’ has a history as a figleaf for the xenophobes since overt racism became unfashionable. Certainly there are some who truly fear for ecological sustainability, but low or no immigration will not address this effectively – it will only weaken Australia’s capacity to transform its economy and society for the reasons you and others have stated.
I wonder to what degree Gillard and Abbott are going to really shrink Australia by reducing immigration and/or cutting reproduction incentives, or whether it is just rhetoric for cheap votes. It will still be massively damaging even if it is just empty words, as it will legitimise a dreadful position in future debate.
Well Bernard, a rather slanted, ghoul-like approach and only white english speakers? Perhaps you should try for a little more balance.
“And the surrender to small-mindedness comes at a time when Australia should be exploiting the poor economic management of other developed countries to pick the eyes out of their skill bases. Across Europe and the anglosphere, there are millions of highly skilled, well-educated men and women whose potential isn’t being used, and won’t be used for years to come, until Western economies return to strong growth, if they ever do. We should be encouraging these people to make new homes in Australia, where we’ll put their talents to use and reward them well.”