Ode to Peter Martin, immigration extremist

By Leith van Onselen

If you want a classic example of how the once mighty ABC has gone to the dogs, look no further than the above discussion of immigration and a ‘Big Australia’ aired on The Drum last Friday.

The segment featured a discussion with Fairfax’s Peter Martin (an avid mass immigration supporter), Dai Le (Fairfield City Councillor), and Tracey Howe (NSW Council of Social Services).

According to Peter Martin, running a mass immigration program is unambiguously beneficial and makes Australia “more prosperous”:

“More people does mean more prosperity… This has proved to be the case. We have a real problem though that ideally we’d create a new city. But I don’t think we are able to anymore…

It’s a question of where you put the people. And we know that when people are in the centre of cities, that’s where the high value jobs are. That’s where the contribution to GDP is…  The only answer I think to where to fit these people in is… infill – it’s taking those suburbs and turning one house into two or three…  that’s what we are going to have to do… I can’t think of another place to put these people who will make us richer”.

The key threshold issue that needs to be assessed when discussing immigration is whether the current settings are making incumbent residents better-off? Don’t just take my word for it – the Productivity Commission (PC) explicitly noted the same in its recent Migration Intake into Australia report:

The Australian Government should… specify that the primary objective of immigration and the Government’s population policy is to maximise the economic, social and environmental wellbeing of the Australian community (existing Australian citizens and permanent residents) and their future offspring.

Unfortunately for Peter Martin, the evidence does not support the notion that current mass immigration settings are making incumbent residents better-off. The evidence appears to be to the contrary.

In 2006, the PC completed a major study on the Economic Impacts of Migration and Population Growth, which modeled the impact of a 50% increase in the level of skilled migration over the 20 years to 2024-25 and found that “the incomes of existing resident workers grow more slowly than would otherwise be the case”.

The PC’s latest report, while it didn’t model distributional impacts from immigration, did find that real wages under existing mass immigration settings would be lower than would exist under zero net overseas migration (NOM):

Compared to the business-as-usual case, labour productivity is projected to be higher under the hypothetical zero NOM case — by around 2 per cent by 2060 (figure 10.5, panel b). The higher labour productivity is reflected in higher real wage receipts by the workforce in the zero NOM case.
ScreenHunter_14902 Sep. 12 16.24

Martin has conveniently ignored the many costs of running a high immigration program, which are borne by the incumbent population and unambiguously lowers their welfare. Again, here is the PC’s assessment of these costs:

…whether migration delivers an overall benefit to the existing Australian community will also depend on other factors, including the distribution of those economic benefits, and the broader impacts of immigration, notably the associated social and environmental impacts…

High rates of immigration put upward pressure on land and housing prices in Australia’s largest cities. Upward pressures are exacerbated by the persistent failure of successive state, territory and local governments to implement sound urban planning and zoning policies…

Urban population growth puts pressure on many environment-related resources and services, such as clean water, air and waste disposal. Managing these pressures requires additional investment, which increases the unit cost of relevant services, such as water supply and waste management. These higher costs are shared by all utility users…

Immigration, as a major source of population growth in Australia, contributes to congestion in the major cities, raising the importance of sound planning and infrastructure investment …governments have not demonstrated a high degree of competence in infrastructure planning and investment. Funding will inevitably be borne by the Australian community either through user-pays fees or general taxation.

Hence, running a high immigration program becomes increasingly costly for existing residents. A classic example is infrastructure, where the PC in 2013 warned that total private and public investment requirements over the next 50 years are estimated to be more than 5 times the cumulative investment made over the last half century!

Peter Martin’s suggestion that Australia’s big cities are the drivers of prosperity, and that simply importing more people would make us richer, is patently false.

Like it or not, Australia pays its way in the world primarily by selling-off our fixed mineral endowment. Importing more people necessarily means that Australia’s minerals base must be spread more thinly across a larger population, which necessarily make Australians poorer (other things equal). Again, the PC has made similar observations:

“Australia has considerable natural resources in regard to mineral wealth. As non-renewable resources deliver rents for those who extract them and for governments in the form of resource royalties and taxes on company profits, a larger population means those rents that are captured by government are shared across more people”.

To illustrate, consider the below chart, which shows that Australia’s rural and regional areas provide Australia with not only its food, but also the lion’s share of its export revenue, which is effectively what pays for Australia’s imports (consumed mostly by city dwellers):

Increasing the number of people via mass immigration does not materially boost exports but does increase imports (think flat screen TVs, imported cars, etc). Moreover, it requires Australia to sell-off our fixed mineral assets quicker to maintain a constant standard of living (other things equal).

Put another way, Australia would ship roughly the same amount of hard commodities and agriculture regardless of how many people are coming in as all the productive capacity has been set up and it doesn’t require more labour. So basically we are wrecking the trade balance by more people coming in each year (mostly to Sydney and Melbourne) because of all the additional imports.

Anyone disputing this view only needs to look at the below charts showing the stalling of export growth amid the sharply deteriorating trade balances in NSW and VIC, which of course have been the primary destinations of migrants:

ScreenHunter_17044 Jan. 22 16.08 ScreenHunter_17045 Jan. 22 16.11

Which has driven gigantic trade deficits in Australia’s two biggest states:

Meanwhile, the infrastructure deficits in both Sydney and Melbourne, along with congestion, housing affordability and overall liveability worsens each year as more and more people flood into each city and push against infrastructure bottlenecks amid woeful planning.

In short, having bigger cities means a less competitive Australian economy and a wider current account – hardly a desirable situation. And yet people like Martin and his fellow panelists claim this represents economic progress!

But wait, it gets worse. Peter Martin also claimed that Australia has no control over population policy and a ‘Big Australia’ is inevitable:

“It [a Big Australia] is going to happen. What are you going to do. Are you going to stop people having children? Are you going to make sure that people die earlier? Are you going to stop immigration – will we have an open border with New Zealand? If the conditions are right, they will come in. If they are not right, they won’t. YOU CAN’T CONTROL THE POPULATION SIZE – you can just work out what to do with it. All of these people who argue for a small Australia, it’s not going to happen”.

Sorry Peter, but Australia’s immigration intake is the primary determinant of Australia’s ultimate population size. If you don’t believe me, just read the PC’s latest report:

“FINDING 3.1: With low and stable rates of natural population growth, decisions about the size of the permanent and temporary immigration intake amount to a de facto population policy”.

The PC notes in its report that it is a policy choice how ‘big’ Australia becomes, not a fait accompli. That is, if Australia chooses to persist with current  immigration settings, its population will hit more than 40 million mid-century, whereas if it were to cut NOM to zero, it would grow to only 27 million – a difference of at least 13 million:

With regards to Martin’s argument about New Zealand, nice straw man. Is Martin aware that Australia is currently running an immigration deficit with New Zealand?

Austr Migration to NZ

Despite this, Australia’s NOM has remained at turbo-charged levels far above historical norms:

Clearly Kiwis are only bit-part players in Australia’s immigration program, and yet Martin has chosen to obfuscate the debate.

The other panelists were just as bad as Martin. Their main reason for continuing with mass immigration was to overcome an ageing population:

Host: “With an ageing population, do we need more people”?

Tracey Howe: “Of course we do… All we have to do is say that we are going to make the investment and people will come… Australia’s massive – bring them in”…

Dai Le: “We have not mentioned the need for population growth because of the ageing population”.

Host: “Because we dare not speak about it”…

Dai Le: “Dick Smith is saying ‘no’, but the thing is no is not good because I mean I think Japan is the country that has no population growth but they’ve got huge ageing population, and they are kind of shrinking. So, therefore, we don’t want to go down that path…”

For more than a decade, the PC has debunked the myth that immigration can overcome population ageing:

  • PC (2005): Despite popular thinking to the contrary, immigration policy is also not a feasible countermeasure [to an ageing population]. It affects population numbers more than the age structure”.
  • PC (2010): “Realistic changes in migration levels also make little difference to the age structure of the population in the future, with any effect being temporary“…
  • PC (2011): “…substantial increases in the level of net overseas migration would have only modest effects on population ageing and the impacts would be temporary, since immigrants themselves age… It follows that, rather than seeking to mitigate the ageing of the population, policy should seek to influence the potential economic and other impacts”…
  • PC (2016): “[Immigration] delays rather than eliminates population ageing. In the long term, underlying trends in life expectancy mean that permanent immigrants (as they age) will themselves add to the proportion of the population aged 65 and over”.

In short, trying to overcome an ageing population through higher immigration is a Ponzi scheme.  It requires ever more immigration, with the associated negative impacts on economic and social infrastructure, congestion, housing affordability, and the environment.

Dai Le’s claim that Australia needs immigration so that we don’t become like Japan also does not pass scrutiny.

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 2.8%? How is this a disaster economically?

The panelists should also consult the economists at MIT, which recently found that there is absolutely no relationship between population aging and economic decline. To the contrary, population aging seems to have been associated with improvements in GDP per capita, thanks to increased automation:

ScreenHunter_18202 Mar. 26 13.24

If anything, countries experiencing more rapid aging have grown more in recent decades… we show that since the early 1990s or 2000s, the periods commonly viewed as the beginning of the adverse effects of aging in much of the advanced world, there is no negative association between aging and lower GDP per capita… on the contrary, the relationship is significantly positive in many specifications.

In short, the ABC panelists need to learn some basic economics as well as recognise that it is the living standards of the incumbent Australian population that is the threshold issue in the immigration debate. Living standards in the major cities are unambiguously being eroded by mass immigration via negative externalities that are not captured in the national economic accounts, such as increasing congestion, falling housing affordability, environmental degradation, etc.

Finally, pursuing high immigration is a growth fig leaf for governments and associated rent-seekers to pretend they’re doing the job rather than pursuing the more difficult but ultimately much wider benefits of productivity-directed reform. The ABC panelists have unknowingly played straight into the growth lobby’s hands.

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Comments

  1. The biggest source of Immigration into AUS is not NZ but India.

    Kiwis do not come here to work for $10/hour and I would rather import Kiwi passports than 3rd world passports.

    We should absolutely ban the government-funded NBN from hiring foreigners for sub-$100k jobs.

    • “I would rather import Kiwi passports than 3rd world passports.”

      …and that is a very core definition of every -isam and -phobia
      (e.g. rac-, naz- fash-, ethno-…)

      You could say “I’d rather import *any* immigrant of high education who’s been educated at the cost of another economy rather than those that play the swiss cheese of Aussie Oi Oi immigration policy set by Canberra”

      • High education? If the education there is so good why do they come here to “study”?

        Most Fair Work AUS cases are about foreign workers. Oh yeah, they are imported – not for their great skills but for their willingness to work for illegal wages.

      • Yup – and they won’t do any kind of pesky salary/perk negotiation, or fuss over unpaid overtime / encroachment on personal life.

      • Indians are the biggest rorters in Australian immigration history.Do an FOI request on allegations received by the ABF from the community.

  2. The GDP per capita growth graph is beautiful.

    Lithuania and Latvia have shrinking populations too.

    • Yep, the “White plague” combined with immigration heavens (like “Oi Oi”) plunder smaller less developed nations of their population.
      Oh, you thought that was their planned way up the development ladder?

  3. mild colonial

    Megalogenis says in one para, in The Monthly, that the government no longer controls immigration, the universities and market do, and then calls for the Prime Minister to lead on an immigration policy in the next para. Go figure.

  4. DarkMatterMEMBER

    To paraphrase someone – Growth is the last refuge of the scoundrel! These people do not have any concept of a society other than the fake people crush of the big cities. They live in the Virtual World created by the media which show shiny, happy people buzzing around in the utopia of modern, prosperous multiculti big cities. In this fantasy world, everything is a Wonder. Buying a flat, getting a coffee, planning funeral insurance, visiting the bank – it’s all part of the rich tapestry of modern life that can only benefit by being embiggened.

    Unless the soma gets switched off or the food runs out, this virtual world will persist in the minds of the multitude. Logic will not prevail against this stronger force.

    • The problem is, there is growth and there is growth. Australia isn’t doing “growth”, it is doing “cram and Ponzi”.

      Texas (and some other US States) is doing growth. Off-government-balance-sheet funding of new-development infrastructure via bond markets, free-market conversion of rural land to urban use, cheap land, cheap housing, relatively light regulations on business. All the incentives are right and there is a balanced boom in value-added industry growth, jobs, and in-migration. They have a resource boom as well, but it does not suffer value being sucked out into the urban economic rentier Ponzi like what happens in Australia.

      There was a time when Australia had these structural factors much closer to right. What changed? We are obviously in a “decline and fall, whom the gods would destroy, first they make mad” phase of our civilisation.

      • We are obviously in a “decline and fall, whom the gods would destroy, first they make mad” phase of our civilisation.

        QED.

      • The Howard era happened. Classic stagnation of government. See: The Rise and Fall of Nations. The good news is we must be close to a revolution… The book was mostly about developing economies though so not sure if the same rules apply. Mind you, Australia ticks a surprising number of developing nation boxes – technology and industry diversity etc

    • Those people are parasites. They benefit from a bigger pool of hosts.

      I have nothing but contempt for parasites.

    • Humans, so wasteful.

      Walking around Lismore, so much waste. So much could be recycled. All destined for tip. Sad.

  5. Whoa! Leith is on fire today. Even more graphs and quotes than the usual daily population piece. Yes Peter Martin is disappointing recently, and if The Drum is going to cover population policy the ABC should have had at least one panelist who is a known supporter of a sustainable population policy. They’re becoming increasingly easy to find.

    • There were no supporters of sustainable population policy on the show (and there will never be any with the current lot) for a simple reason, it was a piece of government propaganda brought to you by the Murdoch brigade. The ABC has been defanged, dumbed down and now it is just the government’s blow horn. I expect that in the near future there will be a nightly one hour rant by our dear leader, extolling the virtues of his benevolent government while he answers questions Tweeted by “regular folks”.

      • To the “Murdoch brigade’s” credit, they at least offer up some opposition to the population ponzi in the form of Judith Sloan, Adam Creighton, Mark Latham (before he got dumped from Sky), Bob Carr (on Sky), etc.

      • It was the ABC that ran Dick Smith’s Population Puzzle.
        http://www.abc.net.au/tv/populationpuzzle/

        The problem at the ABC (and with the left as well) is any argument in favour of slowing population growth and immigration is seen as inherently racist. What’s required is sensible respected people from the progressive side of politics (like Bob Carr, Kelvin Thomson et al) arguing the case dispassionately. What will turn left-leaning voters off, and stop them even considering the idea, is linking the issue with Hanson and One Nation. The more people like Dick Smith, and dare I say it Macro Business, are supportive of Hanson, the more progressives will turn away. The case for slower population growth has to be argued from a sustainability and equity (housing affordability) angle.


      • The more people like Dick Smith, and dare I say it Macro Business, are supportive of Hanson, the more progressives will turn away.

        Mark Latham and Pauline Hanson remain the biggest obstacles to getting progressives to accept the need for slower population growth. The sooner they get off the political stage completely, the quicker deep cuts can be made to NOM (if there is a cut to immigration next month as the Pascometer suggests, it is likely to be fairly small)

  6. boyracerMEMBER

    Peter Martin has an odd definition of increasing prosperity when he tells me it means cutting my (not particularly large) house into 2 or 3 separate ones so we can fit the extra prosperity, I mean people, in.

    I’m selling a company car today so I drove to work (not something I do often) – I live 12km from the CBD and was on the road at 6.15 and still ran into a shit ton of traffic. Prosperity!

    I’m about 5 stops from the end of the train line near where I live and it is an 18 minute journey to Central. I’ve tested this by getting trains at different times – between at least 7am and 8am on weekdays it is (barely) standing room only and there are still 6 more stops to go after me. Prosperity!

    • Peter Martin is delusional. He honestly believes that having to live in smaller and more expensive housing represents progress and prosperity.

      Unfortunately you cannot argue with these open border types. It’s and article of faith that more people equals more prosperity. Maybe Martin should move to India, China or Bangladesh. There’s lots of prosperity there!

      • Stewie GriffinMEMBER

        There was not a single panellist who even questioned if immigration was being run too high – it was 100% population spruik.

      • It’s not delusion Leith, it’s malevolence fuelled by personal greed. His paymasters told him to sell big Australia to the detriment of his fellow men.

      • It’s weird. I’ve met Peter M a few times, and been to parties at his place, which is quite large by the way. He’s a very, very smart bloke and I have trouble believing that he actually believes this bullshit against all the evidence. Very strange.

      • DarkMatterMEMBER

        When listening to those people in the clip, it is quite obvious that despite what they say about sharing the downsizing, they totally believe that bigger Australia will not adversely affect them at all. Underneath it is the age old arrogance of people who believe that they are better than others. Also, they believe in meritocracy – in the crush, the “better” people will rise to the top and also have a great life. Anyone who complains about problems is a loser.

        How often do we get to see real battlers get a say on TV? Remember poor old Duncan who asked a question and got thrown under the bus? If you get to be on a ABC panel, you are probably quite well off and a 10M city just means you have twice as many restaurants to pick from. Remember, poor people – it’s their own fault.

      • drsmithyMEMBER

        There was not a single panellist who even questioned if immigration was being run too high – it was 100% population spruik.

        Like I said yesterday, there’s a massive underlying problem that the economic narrative has been so comprehensively captured that it is literally unthinkable to question it.

        Ie: More people == growth == better is an axiom (actually, would be more accurately written as growth == good == more people). “Meritocracy” as mentioned by Darkmatter is another.

        Further analysis proceeds from there.

        These foundations must be targeted. Attacking higher up the chain is just putting bandaids on broken bones.

    • Property developers and infrastructure construction companies prosper, the rest of us don’t. But even they only prosper so long as the demand for moar apartments and roads keeps growing, so population pressure via immigration must be unrelenting. Congestion can never be solved, housing supply can never be adequate.

    • Caught a slightly earlier train to work this morning (Sydney) 8:20 v 8:50, it was so much more packed that I considered voting One Nation.

      Our peak hour services are at saturation, adding more people isn’t helping one bit, and the new metro line won’t help with the crowding on existing lines. I bet getting the train is still a better option than trying to drive in Sydney during peak hours.

  7. “More people does mean more prosperity” – why don’t you go and live in India or China then Peter?

    Most sensible people agree the world’s population (now 7.5 billion) has past the redzone. Open border socialism is a grave danger to the safety of our country.

    • This. The left is full of absolute cretins that want to let the whole world in. It’s astonishing they’re even allowed to voice these opinions let alone take any superiority because of them. To be fair the right is too, those who want 100 million by next week, but they are much rarer.

      • drsmithyMEMBER

        LOL.

        “The right” have been running the show for thirty-odd years. It’s not “open border socialism”, it’s “open border capitalism”.

        Bringing in lots of cheap workers to suppress wages and increase profits (yay free markets, yay meritocracy) is about as socialist as privatising utilities.

      • “Bringing in lots of cheap workers to suppress wages and increase profits (yay free markets, yay meritocracy) is about as socialist as privatising utilities.”

        Exactly!! Both the “centre” left and right capitalists are behind this. Businesses couldn’t export anymore jobs so they demanded the cheaper labour be brought to them.

      • LOL back at you. It was Abbott who said we should reduce immigration recently. The left is too caught up in moral superiority to even suggest such a thing, then in another breath they’ll get scared of Asians taking CFMEU jobs. At the end of the day it’s mainly the leftists with the suicidal tendencies on immigration, as long as it’s not their jobs being took.

      • drsmithyMEMBER

        It was Abbott who said we should reduce immigration recently

        Indeed. But where was he for the preceding fifteen years ? Oh, yeah, busily promoting the “stop the boats” distraction while supporting a massive economic refugeeskilled immigration plan.

        That one of the tinnest ears in the business has finally heard the message (though likely still doesn’t understand it) means nothing.

        At the end of the day it’s mainly the leftists with the suicidal tendencies on immigration, as long as it’s not their jobs being took.

        Over here in reality, there hasn’t been a serious “leftist” near power anywhere in the western world since the mid-’70s. Like I said yesterday, neoliberalism has thirty year head start on #letthemstay and has imported at least an order of magnitude greater, more economically damaging, immigrants.

    • FiftiesFibroShack

      “Open border socialism”

      There’s nothing socialist about high immigration/open borders. That’s a neo-liberal wet dream.

      • drsmithyMEMBER

        You certainly can’t fault the propaganda campaign to conflate refugees and immigration. 🙂

      • Your joking mate the blue haired SJWs get wet over it. They tend to ignore the fact that it would be an extremely high taxing socialism to provide the schools, health and welfare for as many as they wanted.

  8. “Australia’s massive” yeah it’s a massive desert with a few green bits around the edges.

    The Greens are more responsible for the destruction of natural habitat than anyone else. This should be their issue and they don’t even offer a voice, their lack of voice has basically quarantined any debate for years. This bullshit about changing the way we live is basically standing there fiddling as the bulldozers push into bush land. Australians are mostly overconsumptive bogans and that’s part of the appeal for those coming here. They want the awful faux mansion 60 minutes from the city without a tree in sight.

    • And we only live in a tiny part of that green bit anyway. Agriculture is by far the largest use of land in this country, to the extent that fretting about a bit of urban sprawl is absurd. If you are concerned about habitat destruction your chief worry should be about things like land clearing, excessive water extraction for irrigation and the associated salinity problems, maybe even the potential damage done by foreign purchasers of our farmland who have no clue about how to farm in the Australian environment.

  9. Bunch of old morons. Where’s the gen x and y commentators? Very little in the media from those 25-40. This must be the first time in history where if you get old you become not wise but a stupid, degenerate piece of shit.

    Yeah sure theoretically we could build more terraces or French style places, but there is violent opposition towards it, it would require a militant operation, a solid cooperation from federal government right down to local, that is just not going to happen whilst you have boomer scum nimbys and pro big government useful idiot gen ys in the way and as it stands they’ll mostly be sold to the Chinese and left empty.

    • If we were actually building some European style terraces that might be a good thing, but instead we are getting socialist style tower blocks (poorly) built by the private sector with a view to maximising financial returns and sold at very, very capitalist prices.

      I’m not sure if there is an aspect of housing in this country that we haven’t screwed up in some way over the last few decades.

      • Yep, it’s defiled from top to bottom. It’s 2017 and we can’t even build stuff as good as they did in the 1800s.

        This is why I think we need to curb immigration and focus on not being so hopeless before we think about turning it up again. But I would think even that would be too much for today’s dumb greedy Australians. Even the Chinese apartments look significantly more solidly built.

  10. Totally demoralising. The combination of a total lack of understanding of basic arithmetic, obvious lack of research into the subject on a numbers basis, and indulging in this virtue signalling opportunity (though really an idiot signalling result) is what we’ve come to expect from the ABC. The only glimmer of hope (better late than never) is that at least the subject is being discussed by the MSM.