Finally, an honest debate about immigration

By Leith van Onselen

If you get a chance today, make sure that you watch the above debate on immigration aired on Sky News’ Politics HQ.

The debate features former NSW Premier and Australian foreign minister, Bob Carr, who has called for a significant reduction in Australia’s immigration intake, as well as for the federal government to compensate the states for population growth.

The Australian’s Judith Sloan backs Carr’s call, noting that immigration makes incumbent resident workers worse-off.

Below are some key quotes from the debate:

Bob Carr: “Australia’s got currently the most ambitious rate of population growth in relative terms of any developed country in the world. Our population growth rate is more than Indonesia, it’s really that of a third world country. And I don’t think it would be a remotely bad thing if we were to take five years to add an extra million to our population instead of three-and-a-half or three years that it has been taking over the last decade.

Now that’s my proposition: that we should moderate the rate of population growth. And I’d like some of these hearty advocates for a Big Australia to be honest with us about three subjects:

  1. About infrastructure – I’d the Business Council for example to say that for every 25,000 extra citizens that immigration brings to Sydney or Melbourne, the Commonwealth should fund say an extra kilometer of bus transit ways or underground rail;
  2. I’d like to have honesty on rezoning as well. I’d like some of the advocates for Big Australia to say, yes, our ambitious immigration targets are going to require a pretty radical alteration in the densities of Australia’s three biggest cities; and
  3. I’d just for once like to hear one of these advocates for a Big Australia say we are going to have to work harder at reducing water use per household and at bringing down carbon emissions per head. That we ought to have sustainability targets built into our ambitious vision of an Australia that currently has the most ambitious immigration rate of any developed country.

I don’t think it would hurt one little bit that instead of adding 1 million Australians every 42 months, we took a bit longer about it…

I don’t think you could persuade many Australians that having an immigration program that brings an additional 80,000 to 100,000 into Sydney and Melbourne each year is not ambitious. And I don’t think there are too many people who are looking at the challenge of infrastructure keeping up with that population challenge who wouldn’t think that toning it [immigration] down a bit wouldn’t be a good thing…

We are talking about the denser urbanisation of the coastal strip of Eastern Australia. This is not a debate about filling up an empty continent. It’s a debate about seeing that towards the end of this century, Australia’s population will be concentrated in Hong Kong-style towers in a densely populated fertile coastal strip. And it is this geographical consideration that makes Australia a fundamentally different proposition than North America…

I’d just like to have some honesty in Canberra – these decisions are made in Canberra [which] has the lowest density of any capital city. I just wish some of the advocates of big immigration  in Canberra would say ‘yes, but this puts an obligation on us’. Canberra has cut grants to the states by $80 billion an then says to the states ‘your budgets will accommodate the burden, the challenge, of these very high immigration intakes’. And this is an example to me of a lack of honesty in this debate…

There’s a host of work in the UK… and the reports – every report – has said the economic benefit that it [immigration] brings is not to the existing population. Migrants move in and receive all these benefits, but the existing population simply does not”…

Judith Sloan: “The pro-immigration lot will say that there’s not enough investment in infrastructure, public transport, in schools and the like. But the truth of the matter is that 70% of these migrants go to Sydney and Melbourne, and up to a point it’s impossible to keep up with the infrastructure needs of such an ongoing surge in the numbers, so I think it would be very good public policy to reduce the annual intake… and see how we go for a period of time. I think what Bob Carr is suggesting is quite a modest proposal… I think a lot of people would think that is fine…

Nick Reece [Host]: “Countries that don’t have strong immigration programs often get themselves into trouble. And probably the best example of this is Japan, where because of such strong public opinion against immigration, and there’s been a drop in their birth rate, they now have this sort of demographic timebomb which is ticking, which has seen them lose 20-years of good economic growth. So, a properly managed big immigration program surely is a good thing for our economy. Judith?”.

Judith Sloan:“No. No…  If you look at the economic analysis of the impact of immigration, you have to determine what impact it has in per capita terms. Of course it [immigration] makes the economy bigger, but it’s actually what happens in per capita terms [that matters]. And the Productivity Commission, for example, found an incredibly modest positive impact of immigration – 40 years down the track. And the reason they can find a positive economic impact is that the wages of the groups that compete with the migrants… they are held back because of the migrants.  Now, if you happen to be a local… you might have a really different view on it [immigration]. And that’s where I think the economics actually starts to hit the road in terms of the politics”…

It’s worth pointing out that Judith Sloan was the Commissioner in charge of the Productivity Commission’s 2006 review into the Economic Impacts of Migration and Population Growth, so on this topic she carries significant weight and her views should be taken seriously.

I will add that Nick Reece’s argument that countries that shun immigration and have falling populations are economic basket cases is patently false.

Over the period 2003 and 2015, there were five OECD nations that experienced declining populations. These are charted below against Australia’s mass immigration population ponzi:

ScreenHunter_15564 Oct. 18 16.58

If it was true that population growth was such an economic boon, then you would expect that GDP per capita would have experienced anaemic growth in these countries. And yet the data shows anything but, with the nations experiencing the biggest population declines – Hungary, Germany and Estonia – experiencing stronger GDP per capita growth than Australia:

ScreenHunter_15566 Oct. 18 16.59

And what about Japan’s unemployment rate of just 3.0%? How is this a disaster economically?

ScreenHunter_17916 Mar. 14 11.38

In any event, viewers watching the debate overwhelming voted to lower Australia’s immigration intake:

ScreenHunter_17914 Mar. 14 10.50

It’s high time our politicians listened.

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Unconventional Economist
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  1. Judith Sloan has worked pretty hard to hold back wages, between 2003 & 2015.

    Is she afraid of competition?

      • I have a history here of agreeing with this narrative.

        What I disagree with is her inconsistency.

        One may conclude that after two decades of being a petty little trumpeter of “MOAR ASSETS !?#%@” and calling for lower wage share at the behest of her paymasters, that she may be conducting a major ideological shift to remain relevant in a Trumpian world.

        It is valid to query the motives, and mock the history, of such a person.

    • Your post is contradictory. If Judith Sloan has been against foreigners coming here to work for illegal wages, how is Judith holding back wages.

      • That’s nor the point of reference with respect to Judith Sloan. Anyone who knows Sloan’s body of work will know what I’m talking about, this is an economics board after all.

        Thus I’m am not contradictory.

        Educate yourself … before talking to me again.

      • If Judith Sloan has been against foreigners coming here to work for illegal wages, how is Judith holding back wages.

        Cuz there’s more ways to suppress wages that advocating for immigrants to come here and work for illegal wages ?

    • Erwin Schrödinger

      Educate yourself … before talking to me again.

      Jesus. What are you 12 ?

      Judith Sloan has worked pretty hard to hold back wages, between 2003 & 2015.

      Thanks for that comprehensive, well argued, well referenced critique.

      Everyone is listening ……./s

      • Educate yourself … before talking to me again.

        Jesus. What are you 12 ?”

        Actually, what I am doing is shaping a narrative.

        If the esteem held for anyone asserting a debate opponent to “educate yourself” is that they are childish and should be dismissed, I am more than happy with that.

        I implore everyone, that regardless of who states it, that from this point forward a counter point of “educate yourself” is grounds for dismissing their argument.

        I’ll gladly accept it to be applied to this nest of arguments as well and I will concede.

        Go Judith!

        Judith Sloan has worked pretty hard to hold back wages, between 2003 & 2015.

        Thanks for that comprehensive, well argued, well referenced critique.”

        There comes a stage where one is assumed to have prerequisite knowledge. On an Australian economics site, one is assumed to know of high profile talking heads in the field of economics, and be familiar with what barrow they push.

        Such as Gotti, … Gittens! …. Jessica Irvine, Christopher “I get criticism censored on MB” Joye, etc.

        If you aren’t familiar with their ideological vein… educate yourself.

        Everyone is listening ……./s

      • When knowing the ideologocail slant of Australian economics commentators became a prerequire to discussing on an Australian Economics forum.

        When the label “Dad’s army” gets used by the editorial staff of MB, and implying thelikes of Gittins!, Kohler and Gotti, are they requested to summarise the ideological record of “Dad’s army”, or do most of us here elect not to be pedants, and udnerstand the implication?

        Extend to Judtih Sloan’s record. Her crocodile tears over punters getting lower wages? It’s been her raison d’etre for her entire career.

        Thank you very much.

    • Here you go:
      “The strengthening of multicultural or diverse Australia is also our most effective insurance policy against anti-Semitism. The day Australia has a Chinese Australian Governor General I would feel more confident of my freedom to live as a Jewish Australian.”
      –Miriam Faine, editorial committee member of the Australian Jewish Democrat
      The term Semite: Objections to the usage of the term, such as the obsolete nature of the term Semitic as a racial term and the exclusion of discrimination against non-Jewish Semitic peoples, have been raised since at least the 1930s.

      • Wow, I feel terrible that my whiteness invokes such a fear of racism that I’m no longer the preferred candidate for Australian Attorney General.

  2. Thanks for putting Japan on the graph.

    I heard on a BBC Radio business podcast that Japan is exporting more shipping containers than ever before. Not sure how their steel and car exports are going but AUS having out of control population growth has coincided with AUS making less and less cars!

    The Japanese people are fine with a shrinking population. South Korea is about to have a shrinking population soon.

    Russia also had a shrinking population and, like AUS, Russia is an exporter of LNG and aluminium.

    Lithuania and Latvia also have shrinking populations! Not sure about per capita income growth – but they are obviously fine with a shrinking population.

      • Erwin Schrödinger

        Well thats because your not considering Wesfarmers, Harvey Norman, Stockland, or Peninsula Link. Its not all about you.

      • “Well thats because your not considering Wesfarmers, Harvey Norman, Stockland, or Peninsula Link”

        +1. It should be pretty obvious that we’re rooted when our default economic model is to bring more people to the country so that our large companies can gouge them. What about said companies actually expanding overseas, rather than requiring their market growth to be laid on a plate for them? Pathetic.

    • +1 Japan has a shrinking and aging population so a gradual decline in consumer demand and GDP is to be expected. They still have a very high standard of living, low unemployment, health, wealth and high tech business culture. They are aging gracefully and should be viewed as a positive example not an economic basket case.

      • So true – Japan’s “lost decade” is a myth. It was only a lost decade for foreign capital that went there in the 80s chasing the bull market, or capital that went there in the 90s and noughties chasing the GD/inflation recovery that never came.

        The citizens of Japan have been doing just fine – well, fine vs. any other country.

      • don’t think anyone is contesting the standard of living and health levels et al, rather that this current state has been sustained through massive levels of sovereign debt. See link where if you sort the global country table by % then Japan is right up there at 14.5% of their tax revenues going to interest servicing. Have regard to their contemporaries in excess of 10%. All this with record low interest rates (NIRP/ZIRP). The criticism ,valid as it is, concerns what are they going to do when interest servicing consumes 30-40% of tax revenues?

      • Travis, I don’t think there is any evidence that Japan’s sovereign debt problem would be better if they had high immigration. In fact probably the opposite. High immigration in the 80s and 90s they would now have a future health care liability, plus they would have had to spend more on infrastructure, housing etc. with no clear benefit.

        Can they really fit any more people on the trains there?

    • Ronin8317MEMBER

      The host talking about Japan’s population issue have never visited Tokyo? Is it not dense enough already? The fall in birth rate can be attributed to the low marriage rate : most woman wants a husband earning over 6 million yen a year,(70k AUD) while most man earns a bit above 4.3 million yens a year.(50k AUD). As Japan embrace the ‘casualisation’ of the workforce, which was being promoted in the 90s as the cure for high unemployment, wages have declined, while company profit went up. Having more immigrants will drive wages down even further, and lower the fertility rate even further.

    • Precisely. People always cite Japan as some sort of “gotcha” argument.

      But what precisely is wrong with Japan . . . other than the fact that lack of population growth means the owners of capital can’t increase their profits and wealth as fast as they would like.

      What precisely is wrong with Japan in terms of the median income earner?

  3. The higher per capita GDP figures add to the other important issues such as falling real estate prices, an overall higher standard of living, and environmental preservation if we cut immigration levels to equate with ZERO population growth.

      • You aren’t comparing apples with apples when it comes to Japan and employment. Australia doesn’t have a culture of keeping people employed doing nothing to save face.

        There is also a massive amount of administrative and service “make work” that is undertaken – see the fax machine still being an intrinsic part of doing business in Japan.

      • You should do an entire article on Slaying the Myth of Japan.

        For completeness, such an article should include discussion of the recent sharp increase in immigration to Japan, and the Japanese government’s multiple programs to increase it further, including various ‘softening up’ efforts, aimed at getting Japanese people to be keener on accepting immigrants into Japanese society.

      • Without wanting to be reductive, Japan also has an advanced technology and manufacturing base.

        Due to the nature of the vertically integrated historical zaibatsu / contemporary keiretsu conglomerates in Japan (like the chaebol in South Korea) controlling such a large portion of the total economy, if it is culturally desirable to have under-utilised people “employed”, whilst culturally expected for people to work exceptionally long hours, the result is still profitable for those large companies.

        tl;dr the slack is taken up by people flogging themselves.

      • For completeness, such an article should include discussion of the recent sharp increase in immigration to Japan, and the Japanese government’s multiple programs to increase it further, including various ‘softening up’ efforts . . .

        By all means!!!!!

        Because all that tells us is that Japanese politicians – like Australian politicians – govern on behalf of the owners of capital, on behalf of those who pay their campaign expenses, on behalf of those who promise them lucrative jobs when they retire from politics.

        There’s no dispute that the owners of capital want more people because more people means more profit for themselves (at the expense of everyone else’s living standards).

        There’s no dispute that venal politicians pursue policies to ingratiate themselves with the wealthy and powerful.

        No news here!

        We already knew that.

  4. I’d like to hear a coherent answer to the question, “why do migrants settle overwhelmingly in Sydney and Melbourne?”, other than, “because they just do”.

    Sydney and Melbourne are expensive and crowded. If I was migrating to Australia, I’d settle elsewhere. Needn’t be Oodnadatta. Could be Perth, Brisbane, Canberra …

    • I’d suggest that the following three reasons are both plausible and non-exclusive (including not excluding reasons not listed):

      – Because that’s where large businesses sponsoring many 457s are
      – Because that’s where jobs in general are
      -Because that’s where universities and RTOs with international student intakes are

      In respect of the second point, note that at the height of the mining boom, Perth was attracting far more immigrants than today, and Melbourne at least somewhat less.

      • Jumping jack flash

        Also don’t forget that the 457 was pretty much a result of the mining boom and mining companies saying they couldn’t find skilled staff so they were poaching staff from everywhere else with the lure of massive mining wages. Yet somehow, well after the mining boom is over, that is still the mantra of almost every business.

        What happened to the all the redundant mining employees? Did they stuff them into shipping containers and drop them into the ocean when they were finished with them? Or maybe they’re all working part-time now, because the unemployment rate has barely shifted.

      • According to the interstate migration statistics, a massive chunk of them went to Victoria.
        I actually suspect some of them did go home, except that they were then replaced by two people arriving in either Sydney or Melbourne.
        ‘Labour shortage’ seemed at least believable at top of boom – but it’s been over a long time, so high time to return immigration settings to pre-boom levels, unless there’s some reason to wait until a recession forces the issue.

    • Same reason Australians move to Sydney and Melbourne. Because that’s where the work is.

    • Ask most graduates of The university of Tasmania or CSU why they aren’t staying in the local area post qualification.

    • I’d like to hear a coherent answer to the question, “why do migrants settle overwhelmingly in Sydney and Melbourne?”, other than, “because they just do”.

      Constitutional political economy.

      Under the Westminster system – with its generally supine Legislature – the Cabinet has vast discretion to disburse economic rents to the Ministers’ favourites. Combined with the psychological phenomenon of “presenteeism” (he tendency of human beings to look more favourably upon – and to reward – those who are physically present) this creates a powerful centripetal force drawing people in towards the “Fountainhead of Rents”, the Cabinet. Proximity to Cabinet is a “positional good”. You simply cannot increase its supply, even in principle.

      This phenomenon has been known to historians (but apparently not economists) for centuries. It is the reason that Courtiers had to remain at Court. Absence from Court was a death sentence.

      With the evolution of Absolute Monarchy into the Elective Dictatorship of the modern Westminster system, this effect has not gone away. Court has simply been replaced by Cabinet. Ministers reward those modern-day courtiers – the “primary rent-seekers” – who are physically proximate. Primary rent-seekers must live within “lunching distance” of the Ministers whom they cultivate.

      The elevated incomes of the primary rent-seekers draws in a second circle of “secondary rent-seekers”, who in turn draw in further circles, the ripple of rents radiating outwards from the “fountainhead”.

      At some distance from the centre there is a circle of equilibrium (the “Metropause”, rather like the Heliopause around the Sun with the flow of rents corresponding to the solar wind) at which the costs of approaching the fountainhead exceed the benefits. This is the capital city urban boundary. Beyond it lies the geographic equivalent of inter-stellar space.

      (As for the reason Sydney and Melbourne dominate Canberra, Canberra is only the seat of Parliament. The de facto seat of government is wherever the Ministers happen to be making their decisions. That is one reason why Sydney insisted on retaining Kirribilli House as the alternative Prime Minister’s residence after Federation.)

  5. The GDP figures per capita for Japan look even better if you consider that total inflation over 15 years has been less than zero and japanese first home buyers can take out mortgages at 0.7% (0.3% if you want to risk only fixing the rate for 3 years), and prices for homes are, contrary to outside perception, very cheap. A beautifully constructed 2 bedder in central Osaka costs about AUD$300 000. Those poor suffering Japanese.

  6. What are Carr’s and Sloan’s historical views on immigration ?

    I’m gonna take a punt they were singing a different tune a decade or two ago.

  7. Oh dear Nicholas Reece!

    “Japan, where because of such strong public opinion against immigration”

    So what you are saying is, Japan is an actual democracy and AUS is not – because Aussies have always been against excessive immigration.

    What is the immigration rate into Norway and Kuwait?

    Why do you think AUS runs atrocious offshore detention gulags? Oh yeah, to pretend that Gillard/Abbott/Turnbull are anti-immigration to trick the bogan voters. And boy did the trick work from 2001 till 2016.

    • …detention gulags..really. Are you talking about the places with self catered breakfast, range of cooked lunch and dinner, activities and outings as well as 80 odd dollars a week spending money. Name a better run refugee camp. They just don’t get the right to settle in Australia despite coming through several countries to Indonesia for a boat to Australia. You’ve been reading Fairfax haven’t you..

    • Yeah! Nick’s argument for immigration is that it was good for him personally! Many would argue that it was not good for the hosts who have educated him to be such a twit!

  8. We need to get things sorted out first before taking on more immigration. Getting quick GDP uplifts for political points (through mass immigration) is not going to cut it anymore – we look good on paper but as we know our living standards are not exactly improving? Or am I missing something here – all I see is higher and higher costs for everything as well all compete for the same pool of resources. I am all for immigration in moderation but I cannot see the benefits of a huge intake each year when we have the current issues at present. We can’t even provide the basic service of shelter anywhere near any major job prospect these days without it costing the earth.

    • “we know our living standards are not exactly improving”

      I have a few friends that don’t want house prices to drop. The sad thing is that it is has nothing at all to do with the safety of equity in their home. They feel very rich and important owning something that others cannot afford. When I point out their children will not be able to afford a home they are not fussed at all. MB’s mantra about homeowners “eating their own” actually has quite a bit of truth to it.

      However, they did seem a little more concerned when I pointed out that the younger generations that cannot afford a home will eventually become the majority voter, and will make the life of older australians miserable by way of means-tested land taxes and healthcare.

  9. In all honesty Bob just likes the sound of his voice on TV.
    Wasn’t he going to make the Southern Hemisphere a nuclear free zone and solve the Palestinian/Israeli conflict. Now hes going to solve immigration? Give me a break.

    In reality he was the first Premier out of the blocks to join the banks and responsible for some of Australias worst ‘infrastructure’ projects.

    • Jumping jack flash


      yet another case of a former politician out of the spotlight, and out from under the thumb of his masters, shooting his mouth off with abandon and coming up with sensible ideas for policy.

      I also fully expect “do-nothing” Mal to come up with an absolute ton of thoughtful, effective and coherent policy immediately after he finishes being in politics. It’ll be just streaming out of him like 6 years worth of pent-up diarrohea.

  10. The overpopulation of Australia must move away from economics and GDP and towards protecting/ enhancing our standard and quality of living, We had our chance with the boom and wasted it. Wish we were smarter and captured more of the gains for long term. So, so short sighted…
    In OZ, GDP= bigger cake, smaller slices.
    Get used to it. If we down pull the handbrake on rampant immigration now then there will be no going back. Maybe already too late. We will become another mega city with all the problems that come with 8-10 million citizens jammed into one city.
    What’s the plan? There isn’t one of course.