David Uren mounts immigration sacred cow

By Leith van Onselen

The Australian’s David Uren has penned an article in support of mass immigration and a ‘Big Australia’, claiming that it is central to Australia’s economic success and that “fertile, educated Asians are saving our economy”:

Rising house prices and congestion on the roads could be blamed as readily on bureaucratic council planning departments and shortsighted state governments, but elevated migration rates have become a lightning rod for discontent. Subdued growth in living standards worldwide has seen the rise of populism that blames the malaise on external forces, whether that is foreign capital, trade or migrants. This has been evident on both sides of Australian politics with the pressure to rein in temporary migration under the 457 visa program. Tony Abbott has made cuts to migration a central theme in his conservative backbench campaign.

Yet the census underlines the contribution migration is making to the national economy, raising the level of skills and growth while reducing the pressure of an ageing population on living standards and government finances.

It is sometimes argued that migrants have little effect on the ageing of the population because they age as just as rapidly as the Australian-born population. However, the profile of the cohort arriving matters a great deal. That is shown starkly in an Australian Bureau of Statistics comparison of the age profiles of Asian and European migrants. The great waves of European migration came to Australia in the 1950s and 60s and are now retiring. The census shows 40 per cent of European migrants are 65 or older while only 17 per cent are under 35.

By contrast, the new wave of Asian migration is young, with 48 per cent under 35 and only 8 per cent over 65…

Estimates by University of Melbourne demographer Peter McDonald show that in the absence of migration, the share of the population 65 and older would rise from 14 per cent now to 28 per cent by 2053.

Maintaining current migration levels of 180,000 to 200,000 a year with the age profile of current immigrants would lower this to 22 per cent, almost halving the impact of the ageing population caused by declining fertility and increasing life expectancy…

When the global financial crisis hit in 2008-09, Australia was receiving a record 300,000 migrants. Household expenditure per person fell, but the influx of migration meant total spending kept rising and retailers maintained staffing levels…

There has been some evidence of this benefit during the five years since the resources boom peaked in 2011. McDonald estimates that of the 750,000 new jobs generated since 2011, 80 per cent have been filled by new migrants. Without that migration, employment and the economy at large would have stagnated…

The focus of the current migration program on students and skills means that their age and education profile is more favourable than the resident population…

Migration levels could be cut, and the tightening of temporary work visas looks like a first step in that direction. However, it would be attacking a source of Australia’s economic dynamism.

There is so much bullshit here it is hard to know where to start.

First, Uren’s claim that Australia’s housing and infrastructure woes (principally in Sydney and Melbourne) should be blamed on “bureaucratic council planning departments and shortsighted state governments” doesn’t pass the laugh test.

According to the Census data, Sydney’s population surged by 705,000 (+17%) and Melbourne’s by 893,000 (+25%) in the decade to 2016, representing growth of around 1,350 and 1,700 people per week respectively over the decade. Even the world’s best planning system would have struggled to cope with such an unrelenting influx of people.

On this issue of infrastructure, David Uren would do well to read the Productivity Commission’s (PC) final report on An Ageing Australia: Preparing for the Future, which warned that total private and public investment requirements over the 50 year period to 2060 are estimated to be more than 5 times the cumulative investment made over the last half century:

ScreenHunter_15679 Oct. 25 14.39

Worse, this estimate was based on a population projection of 38 million, which has since been upgraded by the PC to 40 million. Good luck with meeting such a massive infrastructure requirement!

Uren should also read the PC’s more recent Migrant Intake into Australia report, where the PC explicitly warned that [my emphasis]:

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.

Get that highlighted bit: there will be higher user-pays fees and taxation for the incumbent population to cope with the population influx.

Second, David Uren’s claim that migrants are boosting Australia’s skills base is not borne out in the data.

The PC’s Migrant Intake Australia report found that while primary skilled migrants have slightly better labour market outcomes than the Australian born population in terms of median incomes, labour force participation, and unemployment rates, secondary skilled visas, and indeed all other forms of migrants, have worse outcomes:

Moreover, the Australian Bureau of Statistics (ABS) latest Characteristics of Recent Migrants report, released this month, revealed that migrants have generally worse labour market outcomes than the Australian born population, with recent migrants and temporary residents having an unemployment rate of 7.4% versus 5.4% for the Australian born population, and lower labour force participation (69.8%) than the Australian born population (70.2%):

Third, Uren’s claim that Australia needs mass immigration to prevent an ageing population has been debunked for more than a decade by the PC:

  • 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.

Uren’s acknowledgement that European migrants are now old, after arriving here young in the 1950s and 1960s, illustrates this fallacy. Today’s wave of Asian migrants will similarly age, creating huge demographic pressures from mid-century.

Fourth, Uren’s claim that “during the five years since the resources boom peaked… of the 750,000 new jobs generated since 2011, 80 per cent have been filled by new migrants” is hardly cause for celebration, since it suggests that Australian born resident workers have been displaced by migrants, lowering their bargaining power and wages in the process. What’s the point of creating jobs if almost all of them go to new arrivals? It’s like spinning your tyres without actually going anywhere.

If Uren’s idea of “economic dynamism” is overcrowded cities, smaller and more expensive homes, lower wages, and a degraded environment, then why doesn’t he move to the sub-continent?

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Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

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Comments

  1. I love how this “economy” has become an entity in itself … it’s a thing! It’s not you and me – it’s “economy” … we don’t matter, our kids don’t matter, the citizens of a country don’t matter – it’s the economy, mate!

    So, riddle me this then … if being the citizen of Australia has devalued so much that it no longer counts, why do we bother spending 50 billions on submarines to defend a country which doesn’t matter?

      • Sorry Sir – I will report to the closes re-education camp… Thank you for showing me the error of my ways.

    • This lot want a return to a 19th century UK and the left want coffee shops and ethnic food shops all over the place.

      They have so much in common I don’t know why they don’t get together and have a big sordid party with relations.

      • Yep. The right wing wants people to come here and work for $10/hour. The left wing also wants people to come here directly from 3rd world villages but is too stupid to realise that they agree to work here for $10/hour.

        The right wing has the same tap water policies as the stupid left wing. So then what is the point of voting in a right wing government?

      • Well it gets quite detailed. One reason might be that sites like this could be shut down under the left.

      • drsmithyMEMBER

        Well it gets quite detailed. One reason might be that sites like this could be shut down under the left.

        Indeed. Demonstrated by the blocking of some websites brought in by our current far-left Government.

  2. Even StevenMEMBER

    Reading David Uren’s comments makes me despair for the state of economic journalism in this country.

    Can someone please send Mr Uren a link to the Productivity Commission’s report?

      • Torchwood1979

        LOL! I facepalmed at his “fertile” Asians comment. Uren sounds like a weird as devo with a fetish for hot Asian chicks.

      • I don’t know what kind of Asians you’re getting in Sydney, but the ones in Melbourne sure are ugly. Overweight and with bad skin. The Indian ones are all male. Overall attractiveness of the population is definitely going down due to immigration from the 2nd/3rd world.

        Madness too when we have lots of beautiful Eastern Europeans/Russians/South Americans who would love to come here… instead we let in every Ahmed, Prakesh, and Qin Yang.

        The international students from Asia in continental Europe are much better looking. Probably because they are there for an education, not to work illegally at Dominos and 7/11.

      • @igygoyug

        Well – when you’re the only one left, after your colleagues were fired, I guess it becomes a case of “any port in a storm”.
        Hell – even the cattle starts looking appealing – hence the mounting of the sacred cow title 😀

  3. adelaide_economist

    Shame. He used to be a reasonable journalist from memory but I guess like the Irving’s of this world he realised a pay cheque is more valuable than having a conscience. Fertile Asians? The evidence suggests our most fertile migrants are of different origin and let’s not mention how fertility of the existing population is being crimped by expensive housing and uncertain jobs. Then again let’s just replace the existing population with those used to lower standards so they don’t complain. That’s pretty much what it boils down to.

    • That’s pretty much it. These cretins are safe living in their expensive and quarantined suburbs, with their standard of living increasing, they see no difference. However everyone else is going backwards and the new people arriving thinks it’s paradise compared to the smelly, dirty and overcrowded countries they are coming from.

    • billygoatMEMBER

      WTF Fertile Asians???
      Racist but in a good way with sound intention because breeding Asians contribute positively to Australian growth, productivity & prosperity (for some.)
      Besides ‘Fertile Caucasians’ are becoming extinct as they discover their transgender origins. #f$$kimmigration #f$$kpoliticalcorrectness #f$$ktransgenderagenda

  4. The stupid…it’s too strong for me.

    I’m really, really starting to hate these bastards. With a passion.

    • Oh you can’t be too harsh on these bastards. They’re probably hungry … and alone… reptilian brain starts stirring: that’s how you get these weak-as-water justifications for multi-culti such as “food variety”, and now, the fertility-argument… one of these days we’re going to get an opinion piece on the quality of them asian cream-pies at the corner shop. 🙂

  5. The Patrician

    “Maintaining current migration levels of 180,000 to 200,000 a year”
    The current migration level is 209,000 a year

    • SchillersMEMBER

      Correct me if I’m wrong (probably am) but didn’t the Census report that the over the period our population increased by 1.9 million, 1.3 million of which overseas born (migrants). This averages 260,000 a year. Agree it has reduced a bit over the last 18-24 months.

  6. “t of the 750,000 new jobs generated since 2011, 80 per cent have been filled by new migrants”

    And that’s a good thing? That means only 20% (or 120,000) have gone to the existing population. They took our jobs!

    “Without that migration, employment and the economy at large would have stagnated”

    That’s difficult to determine how do economist’s get to state this as fact without any justification? In the US, UK and Japan – countries with much lower immigration, unemployment is now back below pre-GFC levels and underemployment falling fast. But in Australia unemployment remains elevated and underemployment is still drifting up.

    • Yep. And unemployment has soared since 2008. While unemployment is low in Japan.

      The food variety argument was made in 2005! So just restrict immigration to chefs from 5 star hotels. What we get are absolutely pathetic restaurants.

  7. 80% of the 750,000 new jobs given to immigrants? That is why I hate mass low-wage immigration.

    The English citizenship test is just a bait and switch – we will get even more Indians instead of SaltBae.

    Almost everyone working in 7-11 was on illegal wages and a recent arrival – thus paying no income tax at all.

    What is wrong with an ageing population? Not many passionate young terrorists in Japan.

  8. hareebaMEMBER

    Who reads The Australian anyway?

    I take this article and its ilk as a good sign. By writing this shit they are only highlighting what moron readership was ignorant to in the first place. They know the game is up and are getting desperate. The tide is turning …. albeit slowly. Soon it will be a surge.

  9. McDonald estimates that of the 750,000 new jobs generated since 2011, 80 per cent have been filled by new migrants. Without that migration, employment and the economy at large would have BENEFITED AUSTRALIANS INSTEAD

  10. “fertile, educated Asians are saving our economy”

    Would love to see the reaction if a journalist said fertile educated caucasians.

    Remember only white people can be racist.

  11. Singapore has had even faster population growth over the same time period (29% in the 10 years to 2015) and has managed the planning of infrastructure quite well and improving quality of living through clever urban planning. However, the infrastructure expansion initially occurred at a lag, leading to overcrowding of trains initially. This has been addressed by massive investment in new train (MRT) lines and stations. It can be done. The economic benefit occurs when you encourage foreign companies to expand their local offices and are able to bring in key people they need from overseas. So for example, multinational ABC wants to set up a Sydney office of about 100 people but need to bring in around 10 key people from overseas. You need the liberal immigration regime to allow this to occur. So for that increase in population of 10 people you get 90 jobs created for locals. If you say no net immigration, then foreign companies will look elsewhere if they can’t get the visas for their key staff.

    • Tamash1MEMBER

      Please don’t compare Singapore with Australia. One has no natural resources,run by the smartest government in the world and put it’s citizens future standard of living above all else. The other is Australia, who has the dumbest self interested politicians who plan nothing beyond the next election and a lazy population that does the same.