Anthony Albanese fails in mass immigration defence

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By Leith van Onselen

Labor infrastructure and transport spokesman, Anthony Albanese, appeared on The Bolt Report on Wednesday night whereby he gave a pathetic defence of maintaining a mass immigration ‘Big Australia’ program (audio starts from around the 18.30 mark):

Andrew Bolt: “You said today that Victoria needed $3 billion more in funding just to keep up the infrastructure with population growth over the next four years. We’re growing so fast that we’ve got to spend more. Now, I guess you would make that same claim in Sydney and in Brisbane… My question here is: why have we got such huge population increases through immigration – 200,000 people a year – when it’s costing us this insane amount of money just to keep up?”

Anthony Albanese: “Well of course migration has been good for our economy. Migration helps to add to economic growth. We have an ageing population”..

Andrew Bolt: “Not per person. We did a segment yesterday showing in total that you are quite right. But when you break it down to per person, felt in your own pocket, our growth rate is only a little bit ahead of Japan, which has got virtually no immigration, and way behind other countries that have got no immigration and very little population growth”.

Anthony Albanese: “Well it’s certainly true that this government, growth has stalled and is below trend. One of the reasons for that is a failure to invest in infrastructure. Infrastructure creates jobs and economic activity in the short-term. But in the long-term, helps boost productivity and produces revenue for government and a return to the national economy.

“What we have seen in Victoria in particular is that infrastructure and investment… is only 12%. But Victoria is 25% of the population. Victorians are being punished for having a Labor Government. And indeed over the next decade, the PBO have released this paper that shows that infrastructure investment will fall from 0.4% as a percentage of GDP to 0.2%, so in half. Now that will have a devastating impact on growth in the economy…”

Andrew Bolt: “I accept that but the point is that it wouldn’t be so devastating if we didn’t have such a massive population intake via immigration that we need to cater to. You wouldn’t need to build more roads, more rail, more this, more that, more schools, more everything, if we didn’t have such a wild intake of immigrants”.

Anthony Albanese: “Migrants aren’t just a cost, they produce economic activity as well as growth”.

Andrew Bolt: “And crowded cities. I don’t understand why we are doing it”.

Anthony Albanese: “Here in Victoria, we had under the former government, when I was the minister, we had $200 per head spending on infrastructure. By the year 2020-21, that figure drops to $40 per head per Victorian. The Commonwealth is withdrawing funding from infrastructure…”

What a pathetic response by Albanese. Regarding his claim that “migration has been good for our economy” because it “helps to add to economic growth”, here’s a chart showing that long-run trend per capita GDP growth has cratered to levels below the early-1980s and 1990s recessions:

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And here’s another showing that real per capita wages & salaries fell by 1.8% over the decade to March 2017:

Hence, mass immigration may be juicing the aggregate economy, but individual workers are not being made better-off. The picture is obviously even worse when broader impacts like traffic congestion and housing affordability are taken into account.

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With regards to Albanese’s claim that “we have an ageing population”, has he been living under a rock? The Productivity Commission has debunked the myth that immigration can solve population ageing many times over the past decade or so. For example:

  • 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.

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From his comments above, Anthony Albanese honestly seems to believe that never-ending immigration and infrastructure spending is some kind perpetual motion machine. That is, Australia can just keep importing migrants and building infrastructure and housing for them, and the economy will remain strong. This argument completely ignores the corresponding blow-out in the trade deficit and the current account deficit, as well as the escalation of debt, that would accompany such an economic model. It also only considers the economy in aggregate, not on a per person basis.

Like so many of his federal parliamentary counterparts, Anthony Albanese is clueless and appears to have zero interest in maintaining individual living standards. So much for “Labor” representing ordinary workers.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.