The ABC’s business editor, Ian Verrender, has penned a great piece today on how Australia’s mass immigration program has created the illusion of economic growth, while individual living standards are being eroded:
Sometime in the next few weeks, there will be jubilation in the halls of Canberra when Australia assumes the world record for the nation that has stayed out of recession the longest…
The March quarter GDP numbers are expected to show 104 quarters without a recession, besting current record holders at 103, the Netherlands.
If you ask our political masters, they’ll invariably declare that most of it was down to sound economic management…
But a fundamental ingredient in that economic miracle has been immigration and more particularly the extent to which the program has been ramped up in the past 15 years.
From around 90,000 at the turn of the century, our annual intake of immigrants has risen to more than 200,000 a year.
That’s put a rocket under our population growth rate, which has surged to 1.8 per cent over the past 15 years, way above the OECD average of 0.7 per cent…
However, from an economic viewpoint, it’s delivered our leaders a convenient buffer with which to hide a multitude of fiscal sins and allowed them to shirk making tough decisions…
But the crime committed by Australian governments of all persuasions in the past 20 years is that, while they’ve been happy to accept the kudos for economic growth, they’ve been totally unwilling to spend the necessary cash to ensure the economy can cope with such a dramatic influx of new arrivals.
In essence, they’ve cooked the books.
As a result, many of our major cities are choking. Our infrastructure is obsolete. Utilities are struggling. That, in turn, has adversely affected our productivity and led to further distortions in how our wealth is distributed…
If you simply divide our economic growth performance by the number of Australians, our growth doesn’t look anywhere near as flash… Once you spread the extra wealth around all those extra people, we’ve been barely marking time. So much for the boom…
Since around 2003, Melbourne’s population has swelled by almost 1 million, with Sydney not far behind.
All those extra people have to live somewhere and that puts pressure on housing…
It is little surprise then that in the past decade, housing prices, particularly in the major centres have soared while wages growth now is the slowest since the last recession…
Verrender’s piece certainly beats hands down the ABC’s recent biased segments pushing mass immigration. So well done to the ABC for restoring some balance to the debate.
Verrender’s claim that the growth in real GDP per capita has been “tepid at best” is backed-up by the data. As shown in the next chart, Australia’s 10-year average annualised rate of GDP per capita growth has fallen to a level that is below the early-1980s and early-1990s recessions:
Australia’s growth in real GDP also ranks poorly against the Netherlands once population is taken into account.
As shown in the next chart, Australia is a high population growth (immigration) nation, whereas the Netherlands is not:
Since 1960, Australia’s population has grown by a whopping 136% versus the Netherlands’ 48%:
And over their respective ‘boom’ phases, Australia’s population growth has been far higher than the Netherlands – i.e. circa 40% versus just 15%:
Accordingly, the Netherlands’ growth in real GDP per capita has comprehensively beaten Australia’s since 1960:
As well as during their respective uninterrupted ‘booms’:
It is also worth reiterating that Australia’s uninterrupted ‘boom’ has also been caused, in part, by an unprecedented build-up in household debt, which is now the second biggest in the world when measured against GDP, and is also higher than the Netherlands:
Clearly, much of Australia’s ‘growth’ success has been largely a mirage, brought about by running one of the world’s biggest mass immigration programs as well as the unprecedented build-up of household debt.
Add in the negative external impacts on infrastructure, housing and the environment, and it is clear that mass immigration is a net negative for incumbent residents.
