High immigration is not an economic “no brainer”

ScreenHunter_23 Oct. 29 07.31

By Leith van Onselen

Over the weekend, Business Spectator’s Rob Burgess posted an article strongly supporting his boss, Rupert Murdoch’s, plea that Australia maintain its high immigration intake, while lambasting those whom question the merits of such policy:

[Rupert Murdoch] addressed two points that have been misused as political weapons in the past four years.

First, he reiterated his belief that Australia should continue a robust immigration program. To demographers and economists, that’s a no-brainer. However, with the complicty of the ‘he-said-she-said’ style of journalism Australians have become too comfortable with, this was seriously raised as a problem at the 2010 election.

At that time, both sides of politics (afraid of losing the xenophobe vote) paid lip service to the idea that Big Australia was something to fear (The invention of cloud campaigning, July 2010).

Thankfully we were spared such silliness at the 2013 election. With Labor’s silly campaign handing power to Tony Abbott on a platter, there was no time to even broach the topic…

He is right to… celebrate immigration as an important lifeblood of the nation.

That Burgess has gone into bat for his boss and argued for an ever-growing population is understandable. After all, more people means more potential users of Murdoch’s various media assets, and more profits to be had.

But Burgess’ claim that to question high immigration is either silly or xenophobic is economic hogwash.

As regular readers will know, I have been a long-time skeptic of Australia’s high immigration policy, which is running at roughly double historical norms (see next chart). While expanding Australia’s population by more than 1 million people every three years might be great for Australia’s business elites –  who enjoy the fruits of an expanded market – it imposes real costs on the rest of us, who must endure increased costs of congestion, higher infrastructure costs, lower environmental amenity, and minimal uplift in material economic well-being.

ScreenHunter_75 Sep. 11 10.02

Below is my critique of the view that high population growth (based primarily on immigration) is unambiguously beneficial for Australia. These arguments have been articulated previously, therefore, apologies if you have read them before.

Population growth and the economy:

Advocates of population growth argue that it is required in order to grow the economy and that, without it, growth would suffer, lowering overall living standards.

However, from a narrow economic perspective, population growth (immigration) is good only if it raises the real incomes of the pre-existing population (e.g. GDP per capita). While it is true that Australia’s high population growth over the second half of the 2000s boosted Australia’s real GDP (more labour inputs, other things equal, means more outputs), evidence is sketchy as to whether GDP per capita increased due to population growth. In fact, as the below chart shows, real GDP per capita has remained lacklustre since 2007, suggesting that while the overall economic pie has increased in size because of high population growth, everyone’s share of that pie has barely grown.

ScreenHunter_76 Sep. 11 10.15

The economic impact of ongoing high immigration is also illustrated by the next chart, which shows population growth’s contribution to headline GDP, and how growth in per capita terms has been lacklustre ever since the Global Financial Crisis, with Australia experiencing a recession in per capita terms in 2008:

ScreenHunter_10 Sep. 26 13.10

Of course, we don’t know the counter-factual. Growth in per capita GDP might have been worse (or better) without such strong immigration. But the arguments for (or against) high rates of immigration purely on narrow economic grounds is inconclusive.

Population growth, infrastructure and productivity:

The question around living standards becomes more important when infrastructure constraints and the environment are taken into account.

Indeed, a big negative of Australia’s high rate of population growth is that it is placing increasing pressure on the pre-existing (already strained) stock of infrastructure and housing, which reduces productivity and living standards unless costly new investments are made. Further, controversial investments like desalination plants would arguably not have been required absent such population growth.

Further, when infrastructure and housing investment fails to keep up, it places upward pressure on inflation, requiring higher interest rates, which can then damage productive sectors of the economy. As explained in a 2011 speech by the Reserve Bank of Australia’s Phil Lowe (summarised here), these factors were certainly in play in the late-2000s, when rapid population growth placed upward pressure on rents, as well as caused a big surge in utilities prices as the capacity of the system struggled to keep pace with the growing demand, requiring costly new investments.

Ongoing high population growth also places additional strain on the natural environment, causing greater environmental degradation, increasing water scarcity and pollution, and making it more difficult for Australia to reduce its carbon footprint and meet international pollution reduction targets.

We need immigration to ameliorate the affects of an aging population?

Another common argument from proponents of high immigration is that it is required in order to mitigate the aging of Australia’s population.

The United Nations forecasts that the ratio of workers to dependents in Australia is projected to fall significantly over coming decades as the Baby Boomer generation retires en masse (see next chart).

ScreenHunter_77 Sep. 11 10.33

However, the argument that Australia can avoid (rather than delay) population aging is spurious. The issue of an aging population will need to be addressed at some point irrespective of the level of immigration. Simply importing more workers to cover the retirement of the Baby Boomers only delays the aging problem, pushing the problem onto future generations. Further, what will be the solution in 30 years time when current migrants grow old, retire and need taxpayer support? More immigration and an even larger Australia?

While the current population growth rate of 1.8% seems fairly benign, due to the powers of compounding, such a rate of growth is clearly unsustainable over a long time frame (see next chart).

ScreenHunter_78 Sep. 11 10.40

While the above chart may seem facetious, as population growth could be curtailed at some point in the future, the fact remains that there will always be vested interests pressuring governments to expand population growth in the face of an ever-aging population. Hence, boosting immigration to overcome an aging population is no solution at all.

A free kick to rent-seekers:

Why, then, are Australia’s politicians continuing to follow the high immigration path when the benefits to the pre-existing population are so questionable?

Well, apart from juicing headline GDP growth and delaying the impact of an aging population (explained above), high immigration appeases big business.

Australia is ruled by duopolies and oligopolies, which see a rising population as an easy way of selling more goods and services. Big business also receives, through immigration, access to lower cost workers. And there’s less need to become more efficient when your customer base is growing inexorably. Rather, just sit back and watch the profits flow.

Take, for example, Australia’s banks, which get the double bonus of not just having more consumers to sell debt to, but also extra demand for housing, which helps to support house prices and their loan collateral, especially given the urban consolidation policies operated by Australia’s states.

However, while the big end of town is the clear winner from rapid population growth, it doesn’t wear many of the costs. That is borne by you and I.

As argued many times previously, while I believe that Australia could probably support a substantially larger population with improved policy settings and investment, like many Australians, I don’t hold much faith in our political class or policy making processes, which have time and again proven to be deficient in providing adequately for the pre-existing population (let also tens of millions more people), or that a substantially larger population would improve living standards anyway.

I challenge commentators, like Rob Burgess, to counter my arguments and articulate why high immigration is unambiguously beneficial for ordinary Australians. Given high immigration is supposedly a “no brainer”, they shouldn’t have too much trouble drafting their response.

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Leith van Onselen

Comments

    • haha well said.

      Fact, immigration is a direct threat to low income earners because of a couple of reasons, though all reasons lead to a lower quality of life

      1. Higher cost of living because of restrictions in property. Proof of this is earnings/mortgage ratio’s etc… are now about 7 when they use to be 3. This is the biggest indicator. With cashed up immigrants many have been forced to give up the Australian dream of owning a home.

      2. Public transport is already over crowded. People are stressed enough as it is without the burden of been made to stand because of foreign immigration.

      3. Many Australian’s are now been made homeless because of cashed up foreign immigrants. Proof is in stats from the gov showing a huge increase in homeless people including families.

      4. Water resources will become under threat more and more

      5. Wage erosion though cheap/imported labor. I don’t know of any foreign student that is making more than $12 an hour. Carnegie in Melbourne is a good example, so many workers in the Asian restaurants been paid about $10 an hour, you just need to ask in a clever way

      6. Foreign investment into property. This is just nasty, might as well say rich people over seas have a right to property over local people who were born here.

      Australia is a country built on immigration. This is the most useless saying I have ever heard, as many countries are built on immigration. What the problem is, is that locals born here are losing their options and chances because of this massive immigration drive. There are no problems with immigration if you take all land restrictions away from housing, stop land banking, take away tax breaks for property owners and land owners and tax them. Increase spending on decent train systems (including one to the airport) and many other options. And regulate student workers, ie, it must all be electronic so transactions can be tracked etc…

      Government instead is going to make it easier for foreign students to study and then work here. They are also now talking about concessions to them for public transport, thus overloading that system even more.

      Until this happens, immigrants are a direct threat now to many Australian’s.

      • +Infinity.

        I migrated from India to Australia as a PR in 2000 and lived there upto 2012. I am a Citizen now. I live now in India and will be back in Australia in couple of years (hopefully).

        I have seen the change. it does not make sense.

        Immigration must be throttled according to the economy’s state and when unemployment is at 3%.
        Only citizens of Australia must be allowed to own homes.

        currently Australian economy is not in great shape and by the looks of it, is only bound to go down.

        Otherwise the citizens will face the tune.

        This immigration madness/home ownership by overseas people or PR’s/employment Visa (with few exceptions) needs to be put into freeze for at least few years.

        Does not really matter how this hurts the economy. At least the citizens will live with less agony.

        All these things can be re-started down the lane when we can actually accommodate such intake without causing agony to citizen’s in term’s of Jobs/Home ownership/good not so crowded amenities.

    • Problem with democracy as we know it: the choice is between political parties and political platforms, none of which are likely to represent your wishes on everything.

      Swiss democracy is the only real one.

    • That’s the tragedy. I really don’t think people willingly did vote for it.. So the question should be. How do we (those opposed to a growing pop) get the message out there? I tried to give Stable Pop Party help, but they were so disorganised I couldn’t even GIVE my help.

      • How did they not allow your help Rich?

        I thought they put in a good effort.

        I think they should have gotten a lot more votes given that they had big signs on main roads for lengthy periods of time and they were mentioned in the comments of the main stream media and blogs like this constantly.

        I know that a lot of people who do want lower immigration levels didn’t vote for them. Some on here for instance. Why I don’t know. They’re certainly a nice and intelligent bunch of people.

      • I have an interview with Mr Murdoch at home published in the Age in 1979. He said then that he supported population growth as long as there was “judicious protection of Australian industry.” When I get back tonight, I will provide the exact quote.

      • Rupert Murdoch interview 1979

        “I think we have to develop this country in every way possible. We haven’t got much time to keep it as a homogeneous, free society. One thing we have to do is to populate it and to do that we need judicious protection of a lot of industries.”

        Q: You said homogeneous?

        “Yes. I believe it is a homogeneous society today. I am not, I hope, being racist about it. I think the mix we have here – it may be a bit too Anglo-Saxon – is not bad. Whether we like it or not, we are a European nation in our lifestyle. We can integrate a great number of Vietnamese, Japanese, Chinese, very successfully – I am completely in favour of that – I think we have to be careful we don’t get ourselves into the sort of problem the United States has. There is a very serious problem there that you cannot ignore and I don’t see why we should import such a problem when we don’t have to. On the other hand, by just sitting on what we have, would mean we don’t deserve to hold it.”

        The Age,November 23 1979. Interview with business editor Terry McCrann

    • But almost everyone voted for it. So it must be what they want.
      What are you talking about ? Most people voted for parties promising to STOP THE BOATS!

      /sarcasm

      • I spoke to some old boomer, he was whinging about Julia, he said he hoped he lived long enough to vote her out, I said I was going to vote for the Stable Population Party. He was against refugees but for immigrants “because they do jobs most of us don’t want to do”.

        Fair enough, but those jobs in my opinion aren’t needed in the first place. For instance trolley collectors for the new mall no one wanted and is only there because of mass immigration.

        So who knows what people are thinking.

      • They’re not thinking Bluebird. Simple as that. I’ve had arguments with people I know, with them saying we owe everything we’ve got to high immigration and to continue this we need MORE.

        Re SPP…I offered them help with ideas and offered to help with the campaign and on polling day. I didn’t receive a reply. I personally think they put in a terrible effort. I’m on their mailing list and didn’t receive any “we need ten people that live in this area to do…..” There was so, so, so much more they could have done. Anyway, little effort was wasted effort it turns out. Sadly Australians are not collectively very bright.

  1. “As argued many times previously, while I believe that Australia could probably support a substantially larger population with improved policy settings and investment, like many Australians, I don’t hold much faith in our political class or policy making processes, which have time and again proven to be deficient in providing adequately for the pre-existing population (let also tens of millions more people), or that a substantially larger population would improve living standards anyway.”

    Couldn’t agree more. I don’t see anything inherently wrong with a larger population but out governments have shown time and time again that they have no plans, capabilities or even desire to built a country/state/city that can support such a population.

    • As argued many times previously, while I believe that Australia could probably support a substantially larger population with improved policy settings and investment, like many Australians, I don’t hold much faith in our political class or policy making processes, which have time and again proven to be deficient in providing adequately for the pre-existing population (let also tens of millions more people), or that a substantially larger population would improve living standards anyway.”

      I disagree.

      but if you change it to

      As argued many times previously, while I believe that Australia could probably HAVE supportED a substantially larger population with improved policy settings and investment IN THE 80s, 90s AND 2000s, like many Australians, I don’t hold much faith in our political class or policy making processes, which have time and again proven to be deficient in providing adequately for the pre-existing population (let also tens of millions more people), or that a substantially larger population would improve living standards anyway.

      Then I would agree. With $100 a barrel oil building the required infrastructure to sustain a substantially larger population is not achievable. And this is even with both imported cheap labour for building that infrastructure and a significant improvement in our leadership. Simply put the required infrastructure will be too expensive, we cannot afford it. The big Australia peddled by Rupert Murdoch can only mean a significant reduction in the living standard of the average Australian.

  2. It’s always the rent-seekers advocating high-immigration growth, anyone questioning them are quickly ridiculed and labelled either economic vandals or racists.

      • That is a b—-y good point; you mean the neo-Marxist or “cultural marxist” idiots, the cultural relativists who loathe their own culture and want to dilute it and stifle it via political correctness about the “rights” of immigrants to “respect” for THEIR cultures. Never mind that the immigrants country of origin is busted-ass because of that culture, and if any immigrants don’t see that and won’t leave their culture at the exit gate, they shouldn’t be here.

      • Yes, a lot of these people are whinging about housing affordability but refuse to acknowledge the part that mass immigration plays, and they think 100 story apartment blocks can be built in Mosman and Glebe next week and everything will be rainbows and unicorns.

  3. all too true but will fall on deaf ears. To be honest I question whether things like gdp per capita growth and economic booms are great things anyway. it all depends who you are. First home buyers would have been very well served by a recession in Australia if it triggered the price deflation seen in the USA. A small proportion would have felt pain via unemployment, but most would have found the purchasing power of their incomes increased vastly, and ditto for upgraders.

  4. It’s not just Murdoch. Ruling elites in all the developed countries have decided that massively increased immigration is necessary.

    Just as the Conservative Counter-Revolution was initially couched in terms of economic efficiency and welfare when it began in 1979, so this latest revolution is couched in terms of economic efficiency, classical liberalism (i.e. freedom to move to whichever country ones pleases), and – a new one this time round! – concern for the welfare of poorer people in developing countries.

    Realists will very quickly discern those motives as window-dressing to conceal the real objective.

    If we look first of all just at Australia, the motive for massively increased immigration is obvious (as discussed last week).

    Australia is a rent-seeking society. It is true that in the past 40 years, the focus of rent-seeking has shifted from protected Melbourne manufacturing to protected Sydney finance (as well as the usual oligopolies and the new infrastructure monopolies). But the protected nature of the rent-seeking industries is essentially unchanged.

    And the other thing that is unchanged is this: in order for domestic industry protection to translate into actual cash in the hands of the rent-seekers, they need an ever-growing domestic market.

    They can’t sell anything overseas because they’re utterly hopeless.

    And to have an ever-growing domestic market you need high levels of immigration.

    That’s what really pushed the post-war immigration boom.

    And it’s what’s about to push the new immigration boom.

    But it is important to understand that this is not just a local Australian phenomenon. It is manifesting itself throughout the developed world.

    And to understand the reason for that one needs to look at this chart (: The chart that explains the world.) which UE linked us to a week ago but which passed largely unnoticed.

    If anyone hasn’t seen it, I recommend that they do so. Most people in the developed world seeing this should be afraid. Very afraid!

    For most people in the developed world, growth in real per capita income has come to an end. Partly as a result of computerisation and robotics, and partly as a result of globalisation, the two century long trend of steadily rising real incomes has – for most “westerners” – come to a shuddering halt.

    There is no reason to expect that situation to reverse.

    For much of the western world income spectrum, jobs are being lost to computerisation and robotics, or wages are being held down by globalisation which has put them into direct competition with cheap labour in poorer countries.

    There are still gains but as can be seen from the chart these are going to the very top, the people who for one reason or another enjoy some sort of market power. (In Australia these are often the politically influential rent-seekers, but market power can come from all types of sources.)

    And this brings us to the nub of the problem. If per capita incomes of the majority of Australians (and other developed country majorities) are not rising, then the elites (the people on the far right of the chart) cannot make any more profit by selling to their existing domestic markets.

    If real per capita incomes of the majority are not growing, then there is little scope for increasing domestic demand.

    And that leaves only one variable left to play with: the number of “capitas”.

    Stripped of all the nauseating cant and hypocritical justifications, this brutal truth facing the western world: the top 1% can only get richer by bringing in lots more people from poor countries to pump up domestic demand for their products and service.

    The negative externalities of this policy (for the existing domestic majorities) will – as far as possible – be ignored. There will be accusations of racism thrown at dissenters. Elite mouthpieces (like The Economist for example) will come up with Jesuitical justification for the new policy and condemn those who disagree.

    There will be talk of addressing the inadequate infrastructure, but it will translate into action only where it can be made to turn a profit for the lucky few.

    The rich and the influential will retreat into their villas and their clubs and their private cars. Not for them the perils of public transport. Not for them the jostle of airport security.

    The benefits will be concentrated.

    The costs will be distributed.

    For most of human history, society has been characterised by enormous disparities of income and wealth. That is the “natural” state of affairs.

    The modern (western) world with its idiosyncratic notions of “equality” (at least for the domestic population) was An historical anachronism. It arose in response to very specific economic and technological factors.

    That era has gone. We are simply in the process of reverting to the norm.

    • My apologies for the duplicate posting (below). I did ask for it to be deleted but something obviously went wrong.

  5. (I might have to break this up to get it posted. Part 2 will follow if and when the machine allows it.)

    It’s not just Murdoch. Ruling elites in all the developed countries have decided that massively increased immigration is necessary.

    Just as the Conservative Counter-Revolution was initially couched in terms of economic efficiency and welfare when it began in 1979, so this latest revolution is couched in terms of economic efficiency, classical liberalism (i.e. freedom to move to whichever country ones pleases), and – a new one this time round! – concern for the welfare of poorer people in developing countries.

    Realists will very quickly discern those motives as nothing but window-dressing to conceal the real objective.

    If we look first of all just at Australia, the motive for massively increased immigration is obvious (as discussed last week).

    Australia is a rent-seeking society. It is true that in the past 40 years, the focus of rent-seeking has shifted from protected Melbourne manufacturing to protected Sydney finance (as well as the usual oligopolies and the new infrastructure monopolies). But the protected nature of the rent-seeking industries is essentially unchanged.

    And the other thing that is unchanged is this: in order for domestic industry protection to translate into actual cash in the hands of the rent-seekers, they need an ever-growing domestic market.

    They can’t sell anything overseas because they’re utterly hopeless.

    And to have an ever-growing domestic market you need high levels of immigration.

    That’s what really pushed the post-war immigration boom.

    And it’s what’s about to push the new immigration boom.

    But it is important to understand that this is not just a local Australian phenomenon. It is manifesting itself throughout the developed world.

    And to understand the reason for that one needs to look at this chart (The chart that explains the world.) which UE linked us to a week ago but which passed largely unnoticed.

    If anyone hasn’t seen it, I recommend that they do so. Most people in the developed world seeing this should be afraid. Very afraid!

    For most people in the developed world, growth in real per capita income has come to an end. Partly as a result of computerisation and robotics, and partly as a result of globalisation, the two century long trend of steadily rising real incomes has – for most “westerners” – come to a shuddering halt.

    There is no reason to expect that situation to reverse.

    (continued . . . . . )

    • (Part 2)
      For much of the western world income spectrum, jobs are being lost to computerisation and robotics, or wages are being held down by globalisation which has put them into direct competition with cheap labour in poorer countries.

      There are still gains but as can be seen from the chart these are going to the very top, the people who for one reason or another enjoy some sort of market power. (In Australia these are often the politically influential rent-seekers, but market power can come from all types of sources.)

      And this brings us to the nub of the problem. If per capita incomes of the majority of Australians (and other developed country majorities) are not rising, then the elites (the people on the far right of the chart) cannot make any more profit by selling to their existing domestic markets.

      If real per capita incomes of the majority are not growing, then there is little scope for increasing domestic demand.

      And that leaves only one variable left to play with: the number of “capitas”.

      Stripped of all the nauseating cant and hypocritical justifications, this brutal truth facing the western world: the top 1% can only get richer by bringing in lots more people from poor countries to pump up domestic demand for their products and service.

      The negative externalities of this policy (for the existing domestic majorities) will – as far as possible – be ignored. There will be accusations of racism thrown at dissenters. Elite mouthpieces (like The Economist for example) will come up with Jesuitical justification for the new policy and condemn those who disagree.

      There will be talk of addressing the inadequate infrastructure, but it will translate into action only where it can be made to turn a profit for the lucky few.

      The rich and the influential will retreat into their villas and their clubs and their private cars. Not for them the perils of public transport. Not for them the jostle of airport security.

      The benefits will be concentrated.

      The costs will be distributed.

      For most of human history, society has been characterised by enormous disparities of income and wealth. That is the “natural” state of affairs.

      The modern (western) world with its idiosyncratic notions of “equality” (at least for the domestic population) was An historical anachronism. It arose in response to very specific economic and technological factors.

      That era has gone. We are simply in the process of reverting to the norm.

      • Even if automation replaces much of existing vocational acitvity, there is never a case where there is nothing to do.

        Everyone can always being doing something of vocational value.

        The late dark ages, and middle ages were a time of inert technological advancement. The ruling classes were content with what existed, and by this and other posts you’ve made, they’re the ones decreeing that swathes of human labour are now redundant and contentment has sunk in once again.

        Such decree is ‘the norm’ under your hypothesis, and we are reverting to it.

        The keynesian era showed we can, and always will advance when underutilised labour is shifted up the value chain as technology (such as automation) frees it up from the lower end.

        If it is the decree from the ruling classes, then one can only infer from your posts, violent upheaval is necessary.

        If that is the only solution, it would explain the enthusiasm shown for feminism as a weapon to blunt the class of people most capable of implementing such upheaval.

  6. It would appear that most of the commenters on the article in the BS do not agree with Murdocs views. Maybe his editors should take note before their newspapers become more irrelevant. Why people keep buying mainstream newspapers when they deliberately and blatantly attempt to mislead their readers is strange, must have really good crosswords or something.

    • Not missing it Willy, DISmissing demographics as a justification for increasing the population at the rate of over 1000 per day.

      (see paras 15-19 above )

    • I shall respond to willy nilly henceforth, thusly:

      Willy, you are either a very naughty boy, a closet growthist, or have a very poor understanding of the socio-economic consequences of manipulation policy for population growth.

      The costs of population growth are socialised on the taxpayers and have directly resulted in our below replacement level fertility rates through rising living costs in housing, rates, taxes, fuel, electricity, water and food – i.e. the things we need to survive in a modern economy. Contrary to your repeated assertions, population growth has actually been directly responsible for ensuring that our elderly suffer declining conditions by ensuring lower productivity and an increased welfare bill (our young are our true dependents).

      Now, if you care to look at Japan who also manipulated for population growth in the early 1900s but to their credit, have repeatedly rejected the ponzi demographics scheme of enlisting immigration to bolster declining fertility rates, you will see some interesting things now happening. But first, historically, as their population grew, their fertility rates started to fall. Why? They are educated and the families are smart enough to not have children they couldn’t afford. As such, their population is now declining and contrary to disastrous contentions that this means death to the Japanese or their economy, things are actually rapidly improving for the majority. Of course they have finance ministers vilifying the aged imploring them to “hurry up and die”, but as it turns out, the aged are largely self-sufficient, or where they aren’t, because there is a declining population, there are jobs for them to do without displacing their young from finding work.
      http://letstalkbooksandpolitics.blogspot.com.au/2012/05/economic-advantages-of-declining.html

      All we Stable Population advocates are asking is that we balance immigration with emigration which would be around 85,000 a year currently and with this, we can start to claw our way back to an equitable, stable and resilient economy.

      All of the concerns you are presenting have actually been largely discredit by demographers that actually know what they are talking about. The Ageing population scare is nothing more than a scare designed to ensure population growth by those who cannot appreciate that in the end, the wealth they amass through this scheme will be worth very little.

      all the best my dear fellow 🙂
      Matt

  7. Leith, you have done a good comprehensive analysis here.

    You have well nuanced the point that immigration per se does not have to be bad; it is just that the policy settings for Australia as a whole are all wrong.

    Immigration would be beneficial IF

    1) Australia was not a “rentiers paradise” economy
    2) The immigration was carefully screened to be high quality

    • Phil, on point 2, I think they are already, certainly far more so than the days of ‘ten pound poms’ when pretty much any (white) person could come in. There are criticisms of policies like ours being a ‘brain drain’ on poorer countries who can ill afford to lose their skilled professionals like doctors and nurses.

      Otherwise, I agree, immigration doesn’t have to be a negative, it’s as a nation we’re just trying to do it on the cheap.

      Another thought, the idea of using immigration to “fix” our demographic problem, always reminds me of the old nursery rhyme about the old lady who swallowed a fly… http://www.youtube.com/watch?v=eXQPD6OcugY

  8. Amen brother.

    Love that population growth rate chart.

    Why does the media obsess about GDP growth rates when surely GDP per capita is much more relevant measure of people’s well being?

    Simply importing more workers to cover the retirement of the Baby Boomers only delays the aging problem, pushing the problem onto future generations.

    Kicking the can down the road to our kids is the plan. When our political system has 3 year time horizon, what do you expect?

  9. Seems to me gen x are going to cop the worst workers to dependency ratio.

    We’ll have to get on the bong again and listen to grunge. No lavish retirements for us. Black market tobacco and home brewing will thrive.

  10. I agree strongly with UE on the immigration issue. Perhaps send a link to this story to Federal MP Kelvin Thomson who also is against high immigration. He needs quality analysis like this from Leith to support his argument in Parliament and push in the community. I am not sure of his exact stance on development though; and he probably needs to be sent links to UEs work on land supply issues.

    http://www.heraldsun.com.au/news/victoria/populate-and-perish-warns-federal-labor-mp-kelvin-thomson-as-he-sets-up-victoria-first/story-fni0fit3-1226752374255

    • You may be able to find out his stance on development/land supply at this:

      Victoria First – Inaugural Meeting

      Sustainable population activist and federal member for Wills, Kelvin Thomson MP, has decided to launch a new not-for-profit NGO to safeguard and enhance Victoria’s quality of life.

      Victoria First will fight to halt rapid population growth, overdevelopment, reduce traffic congestion, stop the increasing cost of council rates, rising utility bills, and seek to protect Victoria’s unique animals and plants.

      Inaugural meeting: Sunday 1st December 10am – 12pm at Flemington Community Centre, 25 Mt Alexander Road, Flemington.

      Please get behind Kelvin Thomson and this important venture by forwarding this information to your network and attending the event.

  11. rob barrattMEMBER

    Just a general comment on rent-seeking. Australia has not “become” a rent-seeking society. Rent seeking is just the fashionable word that encapsulates the phrase “pursuing self interest”. Everyone since the caveman era has been doing this. It’s absolutely nothing new, however, it’s degree of SUCCESS in current times is in direct proportion to:

    a) The relative (to say, Iran) lack of political repression and poverty in Australia resulting in a shift toward celebrity culture and other trivial pursuits among the younger generations. This has resulted in a decrease in political and economic awareness.

    b)The paucity of quality in the media as they increasingly feed off this “market”, establishing a feedback effect – poor media causes/caused by poor education.

    A better way to express this concern is to state that rent-seeking among the privileged elite has become more successful in recent times. Whether that is true or not is worthy of debate.

    • aphids and caterpillers have always existed in gardens, but it is not always the case that the gardener ignores or even worse encourages them. Australia is a rent seekers paradise because our policies are designed to improve and entrench rent seeker privelege.

      • rob barrattMEMBER

        If I sharpened my definition to “the wish to distort the process of legislation for my own financial benefit”, the point I made about this being what ALL elites try to do would still be true. In the past this was achieved through the domination of the armed upper classes and more recently through the creation of single party states.
        The things limiting the success of rent-seeking in a democracy are the degree of political and economic awareness among the electorate, the will to and the means by which they can express their dissatisfaction.

      • Rob, perhaps you are unaware of the distinction between the kind of self-interest of the butcher, the baker and the brewer that Adam Smith pointed out, makes them attentive to our welfare as well as their own; and “rent-seeking”; which is an attempt to get something for nothing.

        A baker’s monopoly would be a rent-seeking scheme; so is growth containment urban planning; so is restrictive “licensing”; so is corporate welfare; so is credit creation by the banking system.

  12. why doesn’t anyone here factor in the Societal programming aspect? Murdoch is right, since he and the Astor’s (& every other Oz TV mogul) turned all your daughters into whores, they no longer procreate. They just do it in the butt now. Non 1st tier developed states/countries (eg. China, SE Asia, Micronesia & Torres) have women UNINFLUENCED by modern media, hence – have children early, with upwardly mobile (older) men and raise their children well. Teen pregnancy is only a problem because the fathers are also teens. Australia needs immigration because it will go extinct without it.

    • Australia needs immigration because it will go extinct without it.

      We ‘need’ immigrants because our society is irrevocably broken, or because we need traditional thought re-introduced to our society?

      If it’s the former, then won’t their granddaughters be ‘taking it in the butt’ as well?

      • What kind of “traditional thought” do you imagine is required to plug the butt play shenanigans of Rupert Murdoch’s global white trash whores ?

      • Along the lines of what he mentioned

        “Non 1st tier developed states/countries (eg. China, SE Asia, Micronesia & Torres) have women UNINFLUENCED by modern media, hence – have children early, with upwardly mobile (older) men and raise their children well.

        I assume the nest leader inferred that the train of thought, this has been the emphasis of varied cultural traditions.

        The assertions of Team Progress [tm] hasn’t been evident anywhere in history outside of the welfare state.

    • I imagine the move for women to enter the workforce in ever higher numbers often to pay for expensive accommodation is more to blame for the decreasing fertility rate.

      • yes – i tend to think the biggest beneficiaries of feminism are the banks who now milk 2 incomes per household.

      • Yeah, that’s “liberation”.

        At the risk of being accused of repetition, I would point out that the bankers little ploy has never worked in the affordable, elastic-housing-supply cities in the USA.

        Stay-at-home, child-raising moms are over-represented in those cities. There is a Professor Steve Sailer who has been writing some interesting stuff about this:

        http://www.isteve.com/2005_Dirt_Gap.htm

        http://isteve.blogspot.co.nz/2010/07/dirt-gap-validated.html

        http://www.vdare.com/posts/the-dirt-gap-2012-version

        He does seem to revisit these correlations occasionally, it seems they continue to hold up.

        It seems to me that a kind of self-sustaining paradigm is at work here. Evangelicals and other social conservatives tend to more highly value affordable housing for the purpose of raising families, and therefore are more likely to move to where housing is cheaper. And of course they sustain their own numbers through higher birthrates as well.

      • I imagine the move for women to enter the workforce in ever higher numbers often to pay for expensive accommodation is more to blame for the decreasing fertility rate.
        Decreasing fertility rates are pretty much exactly aligned with easy access to sexual education and birth control for women.

        Who woulda thunk women, when given options other than staying at home breeding, would exercise them ? Crazy.

    • Non 1st tier developed states/countries (eg. China, SE Asia, Micronesia & Torres) have women UNINFLUENCED by modern media, hence – have children early, with upwardly mobile (older) men and raise their children well.
      Probably because in those cultures opportunities for women to do much else are relatively limited.

      But you keep fighting to get women out of the workforce and back into the kitchen, I’m guessing by going of and marrying one of those demure obedient asian women, rather than one of those uppity white whores with their outrageous desires for self-determination and independence.

      • “marrying one of those demure obedient Asian women” – clearly you’ve never met or dated an Asian woman. Your views correlate with what 100% of bogan white women think of Asian women.

    • I think it’s a fair point. I think I read somewhere that gen y has become a bit more conservative, probably after watching Sex & The City and deciding that ending up in your 30s and carrying on like you’re still 20 isn’t necessarily ideal.

      However having whorish gen x & ys(i’m talking about both sexes here) doesn’t warrant creating a bubble via irresponsible credit, nimbyism and all the other stuff. If I’m not mistaken whorish gen xs and ys tend to spend more money.

  13. Careful UE, with this sort of logic young Rupert might look to buy you guys out to shut you up. Settle for no less than double what BS sold for, the quality here is at least twice as good.

    There’s real evidence that high end migration is having a ripple effect on values in Melbourne. I’m seeing renovated post war properties in ungentrified, industrial parts of Yarraville (you could say West Footscray) selling for over $1.2m to couples who’ve been priced out of the inner east. When you couple the massive debt commitment, impact on discretionary spend with the failing infrastructure and its impact on network efficiency, its hard to see how this will end well for the economy.

    Guys I know in the trucking business are already having huge problems with utilisation because they’re stuck in traffic most of the time.

  14. That Real GDP/GDP Per Capita chart is incredible. Is it wrong to suggest the divergence around 1998 coincided with our economic chronic fatigue that started the minute we decided to flip existing property amongst each other at ever increasing amounts?

  15. Jumping jack flash

    High immigration is required:

    The banks lobby for more borrowers.
    The realestate agents lobby for more buyers.
    The business owners lobby for more (cheaper) employees.. to replace the retiring boomers, of course.
    The boomers lobby for more greater fools to buy their properties so they can retire.

    Therefore, the government imports more people.

    The people have spoken! Who are the politicians to disagree?

  16. The obvious question that needs to be asked of everyone is this: was it a mistake that Australia let in YOUR great-grandparents?

    What the thump is the difference now, between building Sydney and Melbourne in the first place, and creating new cities now?

    This is how they “cope with growth” in Texas. But they don’t even think about it as “coping with growth”, any more than the early Australians a few generations ago thought of it as “coping with growth”. Mostly it was “building a new existence out of new opportunities”.

    • In the days of our great-grandparents, our cities weren’t overcrowded. Also, we didn’t have one of the most expensive real-estate markets on the planet. And we weren’t importing people at a frenzied pace just to prop up the price of housing.

      • We just need to build several Sydney sized cities in the middle of nowhere, and provide incentives for people to relocate.

        I am not saying it will happen, given the amount of vested interest, but the solution is simple enough if we really wish to do so.

    • There is an important philosophical question here:

      On whose behalf does the government of Australia govern?

      I don’t mean that facetiously or rhetorically. It is a serious question.

      A. Does the government govern on behalf of the people who are “Australians” at any moment in time?

      OR

      B. Does it govern on behalf of some wider constituency, such as the world at large.

      A “Yes” answer to either of those questions leads to logical difficulties for any policy that is at odds with the preferences of the set of individuals currently constituting “Australians”.

      If the government governs on behalf of “Australians” at any moment in time (and assuming that most Australians do not prefer an increased immigration rate) then how does the government justify that policy?

      Paternalists and other simple-minded people often reply: “You elect the government to govern, and they must be allowed to make the decisions.”

      The problem with that theory, however, is that at no time has any set of Australians ever expressed their preference to have all legislative and executive power monopolised by self-serving politicians under a corrupt system of purely elective government.

      Nor may such a preference be inferred from a strategy of acquiescence unless it could be demonstrated that there are no conditions of Prisoners’ Dilemma (which there almost certainly are given the highly entrenched nature of the political duopoly).

      If, on the other hand, the government of Australia governs on behalf of a wider constituency, then the same problem arises with that wider constituency: if the government of Australia supposedly governs on behalf of some other people in certain circumstances, then a) what are those circumstances, b) according to what criteria is the Australian government bound to act, and – most important of all – c) who decided the answers to (a) and (b)???

      To quote John Locke once again: “. . . they ought to show us this charter from heaven and let us see where God hath given the magistrate [i.e. the government] a power to do anything but barely in order to the preservation and welfare of his subjects in this life . . .”

      If we are to have a world government – governing on behalf of not only Australians but of all the people of the world – then by all means let’s have a world government. But that won’t be a government dominated by the currently dominant rent-seeking factions in Australia who chop and change their theologies from year to year to suit their self-interest. It will be a government dominated by the people currently called “Chinese” and “Indians”.

      It might well be that such a world government would be not so much interested in allowing people to move to Australia as pursuing policies to allow prosperity in their own homelands. If Australian politicians profess to be governing on behalf of people other than those presently defined as “Australians”, then it is presumptuous of them to assume what that external constituency really prefers.

      Of course, that is not the real object of the exercise. The real object of the exercise is to enrich those in positions of influence.

      And – of course – none of this calm philosophical debate will have any bearing on the actual immigration debate. That debate will proceed on the basis on simplistic slogans, mass propaganda, shouting down opposition voices, and punishing anyone who dissents.

      • To your question at the beginning, I think it will be (C), the government governs on behalf of its local constituencies.

        Only those who have the luxury of representing “safe seats” can afford to worry about something wider, such as national interest. Once in a while we might luck into one who reaches the state of your scenario (A). I am yet to see an example of (B). If a government appears to “govern on behalf of some wider constituency, such as the world at large”, it would be either (1) to do so actually aligns with the national/local interest, or (2) it has got no choice but to do so (i.e., to do otherwise will cost dearly and hence will be against the national/local interest).

        I think the Eurozone provides a perfect example. The elected leaders of Germany, France, etc., are only responsible to their constituencies. Whatever they do in the EU is for the national interest of each state, not for the interest of the EU itself.

      • Well put Stephen. I have pondered this myself and can easily conclude that they certainly don’t govern on behalf of the people who are “Australians” at this moment in time.

        Might I dare suggest;
        C. Does the government govern on behalf of multinational corporations?

        I think the TPP might hold some clues as to on who’s behalf the government governs. Another clue might be that one of T. Abbots first actions in government was to move to make it illegal to organise a boycott of a product. Why was that such a pressing matter?

        “Globalism is the ideology of “free trade.” It aims to open up national economies so that multinational companies, using modern transportation and communications, can freely shift their capital, technology and products around the world so as to maximise their profits”

      • @Dys – yes i think that is correct, and that is a product of persuasive power (dollars and marketing power) resulting from market dominance of the big oligopolies.

        Imagine a government trying to do something that went against the financial interests of coles or woollies – or BHP, Rio and X-Strata ;).

  17. Not so much our policy response to immigration as the policy itself. Same as foreign investment – I don’t blame the Chinese for outpricing Australian would-be homebuyers – I blame the government for allowing it.

    • So as Philbest alluded to… allowing your parents/grandparents/great-parents is the same policy.

      Permitting immigration.

      You believe that politicians that allow immigration is a bad policy?

      I would say our policy reponses, such as housing and infrastructure, in light of our levels of immigration is poor.

      • Immigration per se is not a bad policy, and in the case of our grandparents and great grandparents, Australia probably benefited considerably. But we had a very small population back then.

        However, at some point we have to say when we have enough people. Just because we were better off in the past for large numbers of people moving here, doesn’t mean it’s necessarily for our own good now, if they are all moving to a few cities, and those cities are stretched to the limit. Sure we can fit in more people but it means we all have to squash up some more. The have-nots are the ones being squashed, by the way, not the rich but that’s another matter.

        Phil was talking about originally creating Melbourne and Sydney which was a long time before our great-grandparents. He is referring to building more cities now, and if it were the case that we were building more cities, or greatly expanding our country towns, then it would be a different matter. As you know, immigrants tend to move to the cities here.

        “I would say our policy reponses, such as housing and infrastructure, in light of our levels of immigration is poor.”

        Aren’t you putting the cart before the horse? You’re saying it’s a given that we’ve got all this immigration and now we have to deal with it, but it’s not going to stop. I say, let’s cut immigration at least until we can deal properly with the population already living here. What about ensuring there is affordable housing for the average person without deliberately pricing that person out of home-ownership through government policies?

        What is a particularly bad policy is bringing people in specifically for the purpose of propping up already overpriced real estate. In fact, this is what is really all about. Any other discussion is skirting around the edges and ignoring the elephant in the room.

  18. The only answer here is to have a put them last campaign for Labour and the Coalition. How to vote card with two options Labour Last Libs 2nd last or Lib Last Labour 2nd last get rid of this bunch of psychopaths.

  19. Further, when infrastructure and housing investment fails to keep up, it places upward pressure on inflation, requiring higher interest rates, which can then damage productive sectors of the economy

    Also apeshit borrowing for overpriced housing keeping the AUD high, and cost pressures making the rest of the economy uncompetitive.

  20. Had we not had immigration we would end up (with below replacement fertility now for the last 40 years) as Japan, which has more pet dogs than children.

    • Neither Leith nor anyone sensible is suggesting we stop immigration completely.

      Your repeated obfuscation and misrepresentation of his argument betrays a desire to derail reasonable consideration of our dangerously high rate of population growth

      • My point was to highlight that without immigration, we would now be approaching population decline.

        I think you mean portrays?

        I am not misrepresenting any argument. I am providing facts to base judgements on, such as our projected falling natural growth.

        Matching our immigration against our emigration requires consideration.

        Personally, I see no real issue with population decline.

  21. As someone has stated above – the rentiers are just importing children because they have priced out their own citizens from having them.

    Give this time to sink in to be truly and overwhelmingly disgusted.

    • Half the nations have below replacement fertility and the demographic paradox is that as a nation become wealthy, fertility drops.

      It is interesting that with such high levels of immigration that our fertility remains below replacement. Seems the demographic paradox takes hold on arrival.