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Higher Immigration Exploded

July 18, 2011

Dr. Bob Birrell, one of the authors of today's report

They deserve our thanks for applying some rigor to the soft-headed arguments for higher immigration being churned out by the business lobby.

The authors say that alarmist claims about workforce growth if immigration were reduced are false. With net overseas migration at 90,000 a year and the same labour force participation rates, the workforce will still expand by one million over the 11 years to 2021. And if participation rates increase – as they have over the past decade and as the government is planning – workforce growth will be nearer to 1.7 million over this period.

I really welcome their logic on the next point.

They argue that Australia needs lower, but better targeted immigration.

They point out the bulk of current migration has little to do with providing scarce skills to the resource sector. Instead it largely delivers a stream of workers to the big cities where immigrants are being employed in people-servicing industries such as health and welfare. As the authors point out, “The demand for these services is, in turn, partly driven by migration-fuelled population growth.”

It’s the old story of a dog chasing its tail.

The authors point out that the resources boom Mark 2 will involve contraction of some city-based industries such as manufacturing because of the appreciation of the Australian dollar. This undercuts the panicked arguments in favour of high immigration.

Remember that high immigration promotes rapid metropolitan population growth. The report takes Melbourne as a case study. They conclude that if the current high population growth pathway is continued, any fiscal dividend the Commonwealth will reap from the resources boom will be squandered on city-building.

They argue, “This dividend would be far better spent on training the domestic workforce and investing in knowledge-intensive industries.”

The more the knee-jerk argument for high immigration is subjected to analysis, the weaker it looks.

2 Comments
  1. Karen Joynes permalink
    July 20, 2011 4:16 pm

    How do we get the Federal Government to follow this report?

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