Leith van Onselen tackles the growth lobby monster

Tonight, I appeared on the ABC’s National Wrap to debate the Migration Council’s CEO, Carla Wilshire, on Australia’s mass immigration program. Below are notes from the debate explaining my position and refuting Ms Wilshire’s key lines of argument.

Economic modelling on immigration is unflattering and does not reflect real life:

During the debate, we got into an exchange over the purported economic benefits of immigration, as noted by the various Productivity Commission (PC) modelling.

Ms Wilshire argued the modelling shows unambiguous benefits to Australians because GDP per capita is increased, whereas I argued that incumbent Australian workers are made worse-off from falling wages (let alone broader impacts like congestion, higher infrastructure costs, smaller and less affordable housing, etc).

At the outset, it is important to note that economic modelling around immigration is inherently limited and often does not reflect real life.

First, it is generally assumed in these models that population ageing will result in fewer people working, which will subtract from per capita GDP. However, it is equally likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed, as we have witnessed in Japan, where the unemployment rate is below 3%.

Even if this assumption holds true, the benefit to GDP per capita would only be transitory. Once the migrant workers grow old, they too will add to the pool of aged Australians, thus requiring an ever increasing immigration intake to keep the population age profile from rising.

Second, it is generally assumed that migrant workers are more productive than the Australian born population and, therefore, labour productivity is increased through strong immigration. However, the evidence here is highly contestable, with migrants generally being employed below the level of their qualifications, as well as having lower labour force attachment than the Australian born population (more information here).

Third, these economic models typically assume that immigration allows for either steady or increasing economies of scale in infrastructure (i.e. either assumes that population growth does not diminish the infrastructure stock; that bigger is always cheaper; or there is under-utilised capacity). At the same time, they completely ignore the dead weight of having to build more infrastructure each year, as well as the dis-economies of scale from having a bigger population, which necessarily makes new infrastructure investment very expensive (e.g. tunneling, land buy-backs, water desalination, etc).

Finally, and related to the above, these models ignore obvious ‘costs’ of mass immigration on productivity. Growing Australia’s population without commensurately increasing the stock of household, business and public capital to support the bigger population necessarily ‘dilutes’ Australia’s capital base, leaving less capital per person and lowering productivity. We have witnessed this first hand with the costs of congestion soaring across Australia’s big cities.

With these caveats in mind, what does the PC’s modelling on immigration actually say?

Well, the PC’s Migrant Intake Australia report, released in September 2016, compared the impact on real GDP per capita from:

  • Historical rates of immigration, whereby population hits 40 million by 2060; and
  • Zero net overseas migration (NOM), whereby the population stabilises at 27 million by 2060.

The PC’s modelling did find that GDP per capita would be 7% ($7,000) higher by 2060 under current mass immigration settings. However, all the gains are transitory and come from a temporary lift in the employment-to-population ratio, which will eventually reverse once the migrants age (i.e. after the forecast period):

The continuation of an immigration system oriented towards younger working-age people can boost the proportion of the population in the workforce and, thereby, provide a ‘demographic dividend’ to the Australian economy. However, this demographic dividend comes with a larger population and over time permanent immigrants will themselves age and add to the proportion of the population aged over 65 years.

The PC also explicitly acknowledges that per capita GDP is a “weak” measure of economic welfare:

While the economywide modelling suggests that the Australian economy will benefit from immigration in terms of higher output per person, GDP per person is a weak measure of the overall wellbeing of the Australian community and does not capture how gains would be distributed among the community. Whether a particular rate of immigration will deliver an overall benefit to the existing Australian community will crucially depend on the distribution of the gains and the interrelated social and environmental impacts.

It is worth pointing out that the PC’s modelling unrealistically assumed that Australia’s infrastructure stock would keep pace with the extra population, which is vital if economy-wide productivity is not to dimish:

Specifically, the expansion in labour supply through migration is projected to lead roughly to the same proportional growth in capital and output in most industries including infrastructure industries. That is, the modelling broadly assumes that there are constant returns to scale in production…

As the modelling broadly assumes that there are constant returns to scale in production, the economy-wide modelling results are broadly linear. Hence, while the modelling provides insight into the economic impact of NOM, in practice limits on Australia’s absorptive capacity (including environmental factors) mean that constant returns to scale are unlikely to hold for very high rates of immigration.

Clearly, this assumption is at at odds with the Australian economy’s ‘lived experience’, whereby massive infrastructure deficits have accumulated over the last 15-years of hyper immigration, particularly in the major cities.

Most importantly for incumbent Australian workers, the PC’s modelling finds that labour productivity and real wages are projected to decrease under current mass immigration settings versus 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…

With zero NOM, real wages are projected to increase over time, and at a rate greater than in the business-as-usual scenario. That is, in the zero NOM scenario labour is relatively scarce which puts upwards pressure on real wages and causes a substitution towards capital, contributing to the marginally higher labour productivity relative to the business-as-usual scenario (figure 10.5, panel b). Higher rates of labour force participation through immigration in the business-as-usual case is projected to moderate such wage pressures.
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Therefore, according to the PC’s most recent modelling, high immigration improves per capita GDP by 2060 by boosting the proportion of workers in the economy, but this comes at the expense of lower labour productivity and lower real wages.

Moreover, beyond the forecast period (2060), the migrants will age and retire, thus dragging down future growth – classic ‘ponzi demography’.

As noted by the PC above, its latest modelling also did not take account of the distribution of gains to per capita GDP, which is vitally important. Thankfully, it’s 2006 major study on the Economic Impacts of Migration and Population Growth did, and the results were unflattering.

Here, the PC 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”. Below is the money quote:

The increase in labour supply causes the labour / capita ratio to rise and the terms of trade to fall. This generates a negative deviation in the average real wage. By 2025 the deviation in the real wage is –1.7 per cent…

Broadly, incumbent workers lose from the policy, while incumbent capital owners gain. At a 5 per cent discount rate, the net present value of per capita incumbent wage income losses over the period 2005 – 2025 is $1,775. The net present value of per capita incumbent capital income gains is $1,953 per capita…

Owners of capital in the sectors experiencing the largest output gains will, in general, experience the largest gains in capital income. Also, the distribution of capital income is quite concentrated: the capital owned by the wealthiest 10 per cent of the Australian population represents approximately 45 per cent of all household net wealth…

To it’s credit, the PC’s Migrant Intake Australia report does go to great lengths to stress that there are many costs associated with running a high immigration program that are not captured in the modelling but are borne by incumbent residents and unambiguously lowers their welfare:

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.

…there will be additional costs for the community where environmental services that are currently ‘free’ have to be replaced with technological solutions…

Accordingly, the PC explicitly asks that these costs be considered as part of any cost-benefit analysis on the immigration intake, rather than blindly following the results of its modelling.

A prime example of these costs is infrastructure. In its Migrant Intake Australia report, the PC pulls no punches about the higher cost of living imposed on incumbent residents from mass immigration, particularly in the big cities:

…where assets are close to capacity, congestion imposes costs on all users. A larger population inevitably requires more investment in infrastructure, and who pays for this will depend on how this investment is funded (by users or by taxpayers). Physical constraints in major cities make the costs of expanding infrastructure more expensive, so even if a user-pays model is adopted, a higher population is very likely to impose a higher cost of living for people already residing in these major cities.

This follows the PC’s warnings in 2013 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:

The likely population growth will place pressure on Australian cities. All of Australia’s major cities are projected to grow substantially… In response to the significant increase in the size of Australian cities, significant investment in transport and other infrastructure is likely to be required… Total private and public investment requirements over this 50 year period are estimated to be more than 5 times the cumulative investment made over the last half century…

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Similarly, in its latest Shifting the Dial: 5 year productivity review, the PC explicitly noted that infrastructure costs will inevitably balloon due to our cities’ rapidly growing populations:

Growing populations will place pressure on already strained transport systems… Yet available choices for new investments are constrained by the increasingly limited availability of unutilised land. Costs of new transport structures have risen accordingly, with new developments (for example WestConnex) requiring land reclamation, costly compensation arrangements, or otherwise more expensive alternatives (such as tunnels).

In short, there is little hope of achieving the level of investment required to sustain current levels of mass population growth, let alone an increase in the immigration intake to 250,000 (from 210,000 currently), as demanded by the Migration Council.

Overall, the PC’s economic modelling on immigration shows little (if any) material economic benefit to incumbent Australian residents. And once you add the various external costs not captured in the modelling (e.g. more expensive housing, more expensive infrastructure, congestion, and environmental degradation), the overall costs of mass immigration to ordinary Australians almost certainly outweighs the benefits.

Further information on why mass immigration is not in Australia’s interest is explained in MB’s submission to the federal government’s Migration Program review, which is reproduced below. (You can also download a PDF copy here – please share it around).

The Migration Council must believe in exponential population growth:

In responding to my claim that Australia’s NOM is running at triple the historical average, Carla Wilshire argued that when measured in percentage terms (i.e. the rate of growth), it isn’t actually that high and could be increased further. (Again, the Migration Council has lobbied for the immigration intake to be increased to 250,000 from 210,000 currently.)

In taking this line of argument, Ms Wilshire is being very loose with the facts.

First, as noted by the PC’s Migrant Intake Australia report, Australia’s immigration intake as a percentage of population (currently 1%) is very high by historical standards:

Second, and more importantly, it is not the immigration rate that matters for infrastructure, traffic congestion, or the environment, but rather the sheer numbers. Does Ms Wilshire honestly believe in exponential population growth? Because that’s what a stable immigration growth rate implies, which is clearly unsustainable [note: Australia’s current population growth rate in 1.6%]:

Seriously, how big does Ms Wilshire want Australia to become? As noted by The Australia Institute:

Figure 10 shows that under the ABS central forecast, in 2061 Victoria would have the same population as all of Australia had in 1960. In 2061 Queensland would have a larger population than all of Australia had in 1950. It is important to note that these are not the projections of the high growth scenario (Series A), but of the one that most closely matches current trends (Series B).

How much population is enough?

Migration Council is just another mass immigration lobby group:

During the interview, I claimed that the Migration Council’s economic modelling on immigration could not be trusted as it is a vested interest lobby group backed by big business.

Ms Wilshire responded angrily claiming that it was non-partisan and not-for-profit.

Really?

Since its inception, the organisation has lobbied strongly for a ‘Big Australia’ and for the immigration intake to be increased to 250,000 (from 210,000 currently).

It has also been chaired by pro-Big Australia business people and has stacked its board accordingly.

Andrew Jakubowicz, Professor of Sociology, described the formation of the Council in 2010 as follows:

The announcement of the formation of a Migration Council of Australia and its launch by the Governor General on August 1, confirmed by Department of Immigration and Citizenship official Gary Fleming at the Settlement Council of Australia conference in Adelaide in late June, marks a critical juncture in population and immigration policy…

The MCA wants to find a new space to assert the importance of migration and effective settlement, and has brought together some heavy hitters to make this happen. Headed by Peter Scanlon (ex Patricks Chair) – and bringing together Business Council of Australia chair Tony Shepherd, Australia Post head Ahmed Fahour, Ethnic Communities Federation chair Pino Migliorino, Adult Migrant Education Victoria head Catherine Scarth and a number of others – the organisation seeks to build a bridge between those with an economic interest in a big Australia, and those with a social interest in a fair Australia.

Scanlon has been a key figure in building an information base about immigration and settlement through his Foundation… He is also a major real estate developer and will come under scrutiny for how this new lobby group might create benefits for his commercial interests…

Peter Scanlon is a key leader of Australia’s ‘growth lobby’, and has a clear vested interest in mass immigration, as explained by John Masanauskas:

MAJOR investor and former Elders executive Peter Scanlon hardly blinks when asked if his conspicuous support for a bigger population is also good for business.

Mr Scanlon, whose family wealth is estimated to be more than $600 million, has set up a foundation with the aim to create a larger and socially cohesive Australia.

It also happens that Mr Scanlon has extensive property development interests, which clearly benefit from immigration-fuelled high population growth.

“My primary driver in (setting up the foundation) is if we don’t have growth we are going to lose all our youth because the world is looking to train people around the world,” he explains. “Instead of having stagnant growth, we’re going to have a serious decline.”

Mr Scanlon believes that governments aren’t doing enough to sell the benefits of a bigger population so he has put his money where his mouth is…

Peter Scanlon vacated the chair of the Migration Council in 2015 and was replaced by long-time mass immigration booster and Australian Industry Group CEO, Innes Willox, who was affectionately described last year by The AFR “as one of Australia’s top business lobbyists”.

Let’s not pretend that the Migration Council of Australia is impartial in the immigration debate. It is a stealth ‘Big Australia” lobbyist for the business sector.

On a side note, a quick look at the Migration Council’s modelling of immigration’s economic impacts reveals the following howler of an assumption: it “allows for economies of scale in infrastructure”.

You read that right. Their model ridiculously assumes that bigger is always cheaper and/or there is always under-utilised capacity. This flies in the face of the ‘lived experience’ of growing infrastructure bottlenecks and rising congestion costs, as well as increasingly complex and expensive infrastructure projects (i.e. classic dis-economies of scale).  

I’ve already discussed these infrastructure issues above with respect to the PC’s modelling, so I won’t do it again. But clearly the Migration Council has chosen favourable assumptions to get a positive modelling result in support of its Big Australia agenda. Garbage in, garbage out.

Carla Wilshire admits a ‘Big Australia’ will lower residents’ living standards:

Finally, after spending the whole segment arguing that mass immigration will raise Australia’s living standards, Ms Wilshire tacitly admitted that, actually, living standards will fall for those of us living in Sydney and Melbourne:

“…congestion in Sydney and Melbourne is undoubtedly getting to a point where a significant investment in infrastructure is going to have to happen. In fact, one could argue that point was some years back…

One of the ways that we are going to have to solve that problem is decreasing the per capita cost of investment in infrastructure. And migration is part of that solution…

And in some senses it is also about an acceptance that the way in which these two cities function, and the way in which we live in these two cities, is going to change over time. It’s going to be much more about apartment living. It’s going to be much more about public transport. And it’s going to be much more about sustainable cities”…

Only in the Bizarro World of the Migration Council do you solve an infrastructure deficit by adding millions more people. And only in the Migration Council’s world does having to live in shoebox apartments, suffering from greater congestion, as well as making everyone consume less of everything, just so we can make room for mass immigration, equate to higher living standards.

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February 2018

THE BLIND MARCH TOWARDS A ‘BIG AUSTRALIA’

Submission to the Department of Home Affairs’ Managing Australia’s Migrant Intake Review

Summary

At MacroBusiness we support immigration, but at sustainable levels.

Australia’s immigration levels are too high – higher than our cities can absorb. The infrastructure costs of high immigration are excessive and Australia’s infrastructure supply is not keeping up with demand, despite our best efforts.

The economic arguments frequently used to justify high immigration fail the evidence test. Empirical data does not support mass immigration. Excessive immigration also damages Australia’s employment market and the environment.

It is time for an honest debate.

Currently, Australia’s immigration program is overloading the major cities with tens of thousands of extra people each year to stoke overall economic growth (but not growth per person) and to support business (e.g. the property industry and retailers), despite growth per person stagnating.

Meanwhile, individual living standards are being eroded through rising congestion costs, declining housing affordability, paying more for infrastructure (e.g. toll roads and water), environmental degradation, and overall reduced amenity.

The economic evidence for the above is contained in this submission.

The Australian Government needs to stop ignoring these issues. Australia’s living standards are at stake.

MacroBusiness urges the Australian Government to reduce Australia’s immigration intake back towards the historical average of around 70,000 people per annum.

1. Australia’s immigration program is unprecedented:

One of the most profound changes affecting the Australian economy and society this century has been the massive lift in Australia’s net immigration, which surged from the early-2000s and is running at roughly triple the pace of historical norms (Chart 1).

In the 116 years following Australia’s Federation in 1901, Australia’s net overseas migration (NOM) averaged around 73,000 people a year and Australia’s population grew on average by around 180,000 people.

Over the past 12 years, however, Australia’s annual NOM has averaged nearly 220,000 people a year and Australia’s population has grown on average by 370,000 people.

The principal driver of Australia’s population increase has been the Australian Government’s permanent migrant intake, which has increased from 79,000 in 1999 to nearly 210,000 currently, including the humanitarian intake (Chart 2).

Due to this mass immigration ‘Big Australia’ policy, Australia’s population has expanded at a rate that is more than 2.5 times the OECD average, easily the fastest of advanced English-speaking nations (Chart 3).

This rapid population growth is expected to continue for decades to come, with the Australian Government’s Intergenerational Report projecting population growth of nearly 400,000 people a year – equivalent to one Canberra – until Australia’s population reaches 40 million mid-century (see Chart 1 above).

However, the problem with Australia’s mass immigration policy is not just the extreme volume, but also the concentration of migrants flowing to Australia’s largest and already most overcrowded cities.

As shown in Chart 4, around three quarters of Australia’s NOM has flowed to New South Wales and Victoria, principally Sydney and Melbourne:

In the 12 years to 2016, Melbourne’s population expanded by nearly 1.1 million (30%), while Sydney’s population expanded by 845,000 (20%). There was also strong growth in Brisbane (537,000) and Perth (502,000) (Charts 5 and 6).

The migrant influx helps to explain why dwelling price growth has been strongest in Sydney and Melbourne, and why housing is most unaffordable in these two cities (Charts 7 and 8). While the Australian Government and property lobby likes to blame a ‘lack of supply’, the problem rests primarily with excessive demand from mass immigration.

The chronic problems around housing and infrastructure will only get worse under the current mass immigration policy.

State Government projections have Melbourne’s population expanding by 97,000 people each year (1,870 people a week) and Sydney’s by 87,000 people each year (1,670 people each week) for the next several decades until both cities’ populations hit around 8 million people mid-century.

To put this population growth into perspective, consider the following facts:

  • It took Sydney around 210 years to reach a population of 3.9 million in 2001. And yet the official projections have Sydney adding roughly the same number of people again in just 50 years.
  • It took Melbourne nearly 170 years to reach a population of 3.3 million in 2001. In just 15 years, Melbourne expanded by 34% to 4.5 million people. And the official projections have Melbourne’s population ballooning by another 3.4 million people in just 35 years.

No matter which way you cut it, residents of our two largest cities will continue to feel the impact of this rapid population growth via: traffic gridlock; overloaded public transport, schools, and hospitals; pressures on energy and water supplies; as well as more expensive (and smaller) housing.
It is a clear recipe for lower living standards.

2. No economic bonanza:

Politicians and economists frequently claim that maintaining a ‘strong’ immigration program is essential as it keeps the population young and productive, and without constant immigration, the population would grow old and the economy would stagnate.

For example, Prime Minister Malcolm Turnbull has stated previously that “anyone who thinks it’s smart to cut immigration is sentencing Australia to poverty”. In a similar vein, former KPMG partner and “unabashed supporter of a bigger Australia”, Bernard Salt, has produced reams of articles warning that Australia faces economic and fiscal catastrophe without ongoing strong immigration.

Economic models are often cited as proof that a strong immigration program is ‘good’ for the economy because they show that real GDP per capita is moderately increased via immigration, based on several dubious assumptions.

First, it is generally assumed in these models that population ageing will result in fewer people working, which will subtract from per capita GDP. However, it is just as likely that age-specific workforce participation will respond to labour demand, resulting in fewer people being unemployed, as we have witnessed in Japan, where the unemployment rate is below 3%.

Even if this assumption was true, the benefit to GDP per capita would only be transitory. Once the migrant workers grow old, they too will add to the pool of aged Australians, thus requiring an ever increasing immigration intake to keep the population age profile from rising.

Indeed, the Productivity Commission (PC) has for more than a decade debunked the myth that immigration can overcome population ageing. For example, in its 2010 submission to the Minister for Population, the PC explicitly noted that “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”.

Academic demographer, Peter McDonald, has also previously stated that it is “demographic nonsense to believe that immigration can help to keep our population young” .

Second, it is generally assumed that migrant workers are more productive than the Australian born population and, therefore, labour productivity is increased through strong immigration. However, the evidence here is highly contestable, with migrants generally being employed below the level of their qualifications, as well as having lower labour force attachment than the Australian born population (more information here).

Third, economists and their models generally ignore obvious ‘costs’ of mass immigration on productivity. Growing Australia’s population without commensurately increasing the stock of household, business and public capital to support the bigger population necessarily ‘dilutes’ Australia’s capital base, leaving less capital per person and lowering productivity. We have witnessed this first hand with the costs of congestion soaring across Australia’s big cities.

Moreover, the cost of retro-fitting our big cities with infrastructure to cope with larger populations is necessarily very expensive – think tunnelling and land acquisitions – with costs borne largely by the incumbent population. This fact was explicitly acknowledged by the PC’s recent Shifting the Dial: 5 year productivity review:

“Growing populations will place pressure on already strained transport systems… Yet available choices for new investments are constrained by the increasingly limited availability of unutilised land. Costs of new transport structures have risen accordingly, with new developments (for example WestConnex) requiring land reclamation, costly compensation arrangements, or otherwise more expensive alternatives (such as tunnels)” .

Finally, while economic models tend to show a modest improvement in real GDP per capita, the gains are more likely to flow to the wealthy, whereas ordinary workers are made worse-off.

In 2006, the PC completed a major study on the Economic Impacts of Migration and Population Growth, which modelled the impact of a 50% increase in the level of skilled migration over the 20 years to 2024-25. The modelling found that even skilled migration does not increase the incomes of existing residents. According to the Commission: “the distribution of these benefits [from skilled migration] varies across the population, with gains mostly accrued to the skilled migrants and capital owners. The incomes of existing resident workers grow more slowly than would otherwise be the case” .

Of course, there are other costs borne by incumbent residents from immigration that are not captured in the economic modelling, such as worsening congestion, increased infrastructure costs, reduced housing affordability, and environmental degradation – none of which are given appropriate consideration by politicians nor economists.

Adding a Canberra-worth of population to Australia each and every year – with 80,000 to 100,000-plus people going to Sydney and Melbourne – requires an incredible amount of investment just to keep up. Accordingly, Australia’s infrastructure deficit has fallen badly behind over the past decade, and will continue to do so under Australia’s mass immigration program, thus eroding residents’ living standards.

3. Empirical data does not support mass immigration:

While the economic models might show small per capita gains from immigration-fuelled population growth, based on faulty assumptions, the actual empirical evidence shows no link between population growth and prosperity.

Since Australia’s immigration intake was expanded in the early-2000s, trend GDP per capita growth has plummeted to recessionary levels, suggesting falling living standards (Chart 9).

Chart 10 plots the growth in GDP per capita versus population change between 2000 and 2016 across OECD nations and shows no correlation (Australia denoted in red):

Meanwhile, there is a slight negative relationship between labour productivity and population growth (Chart 11):

Whereas there is zero correlation between population growth and multifactor productivity across OECD nations:

A recent study by economists at the Massachusetts Institute of Technology (MIT) also found “that even when we control for initial GDP per capita, initial demographic composition and differential trends by region, there is no evidence of a negative relationship between aging and GDP per capita; on the contrary, the relationship is significantly positive in many specifications” (Chart 13).

There is also evidence to suggest that mass immigration is partly behind Australia’s trade and current account deficits, as well as the nation’s ballooning foreign debt.

The lion’s share of Australia’s export revenue comes from commodities and from Western Australia and Queensland in particular (Chart 14):

However, the majority of Australia’s imports and indeed private debt flows to our biggest states (and cities), New South Wales (Sydney) and Victoria (Melbourne). Sydney and Melbourne also happen to be the key magnets for migrants (see Charts 4,5 and 6 above).

Increasing the number of people via mass immigration does not materially boost Australia’s exports but does significantly increase imports (think flat screen TVs, imported cars, etc.). Accordingly, both New South Wales and Victoria have driven huge trade deficits as the extra imports have far outweighed exports (Chart 15):

All of these extra imports must be paid for – either by accumulating foreign debt, or by selling-off the nation’s assets. Australia has been doing both.

Australia would improve its trade balance and current account deficit, as well as reduce the need to sell-off assets and binge on debt, if it simply cut immigration.

Australia will ship 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.

4. Lowering immigration would raise wages:

Hand wringing over Australia’s anaemic wages growth (Chart 16) hit fever pitch recently, with politicians, economists and media all searching for answers.

One cause that has received scant attention is the role caused by mass immigration in driving-up labour supply and reducing the bargaining power of workers.

Employer groups often argue that a strong ‘skilled’ migration program is required to overcome perceived labour shortages – a view that is supported by the Australian Government. However, the available data shows this argument to be weak.

The Department of Employment’s 2016-17 Skills Shortages report revealed that Australian skills shortages “continue to be limited in 2016-17”, and that there are a high number of applicants per job (Chart 17):

The Department of Employment also revealed a record number of Australians studying at university (Chart 18):

Of whom many graduates cannot gain meaningful employment (Chart 19):

The Australian Bureau of Statistics’ labour force data also shows that Australia’s underutilisation rate remains high, especially for Australia’s youth, despite the recent improvement in the labour market (Chart 20).

Curiously, Australia’s permanent skilled migrant intake is significantly higher today (128,550) than it was at the peak of the mining boom in 2011 (113,850). Why? Unlike then, labour shortages are “limited”, wages growth is running near the lowest level on record, and labour underutilisation is high. What is the economic rationale for running the highest permanent migrant intake on record when economic conditions do not warrant it?

Standard economic theory claims that net inward migration has minimal long-term impact on wages. That is, when the quantity of labour increases, its price (wages) falls. This will supposedly increase profits, eventually leading to more investment, increased demand for labour, and a reversal of the initial fall in wages. Immigration, so the theory goes, will enable the larger domestic population to enjoy the same incomes as the smaller population did before.

However, a recent study by Cambridge University economist, Robert Rowthorn, debunked this argument. The so-called ‘temporary’ effects of displacing incumbent workers and lower wages can last for up to ten years. And if there is a continuing influx of migrants – as is the case in Australia – rather than a one-off increase in the size of the labour force, demand for labour will constantly lag behind growth in supply .

In other words, if the Australian Government was to stem the inflow of foreign workers, then workers’ bargaining power would increase, as will wages growth. It is basic economics.

As noted in April last year by The Australia Institute’s chief economist, Richard Denniss, the very purpose of foreign worker visas is to “suppress wage growth by allowing employers to recruit from a global pool of labour to compete with Australian workers”. In a normal functioning labour market, “when demand for workers rises, employers would need to bid against each other for the available scarce talent”. But this mechanism has been bypassed by enabling employers to recruit labour globally. “It is only in recent years that the wage rises that accompany the normal functioning of the labour market have been rebranded as a ‘skills shortage'” .

Australia’s youth is effectively caught in a pincer by the Australian Government’s mass immigration program. Not only does it hold down their wages, but it also inflates their cost-of-living via more expensive housing (both prices and rents).

5. It’s time for a national debate and population policy:

The Australian Government under both the Coalition and Labor has long supported mass immigration and a ‘Big Australia’ on flawed economic grounds.

Behind the scenes, the ‘growth lobby’ of retailers, the banking sector, the property industry and erroneously named ‘think tanks’ all push the growth-ist agenda, while completely ignoring the cost burden on ordinary residents.

At the same time, many on the left pursue the globalist agenda of ‘open borders’ citing spurious social justice concerns.

Currently, there is no coherent plan other than to inundate the major cities with extra people each and every year to stoke overall economic growth (but not growth per person), to support big business (e.g. the property industry and retailers), and to prevent Australia from going into recession (despite growth per person stagnating).

Meanwhile, individual living standards are being eroded through rising congestion costs, declining housing affordability, paying more for infrastructure (e.g. toll roads, water and energy), environmental degradation, and overall reduced amenity.

Never have Australians been asked whether they want a population of 40 million-plus mid-century. Nor whether they want Sydney’s and Melbourne’s populations to swell to eight million mid-century.

Yet immigration and population growth affects every facet of Australian life, including: how long one spends stuck in traffic; whether one can get a seat on a train or a spot in hospital or school; and/or whether one can afford a good sized home within a decent commute to where one works. It is a key determinant of living standards above all else, yet is rarely questioned by the media nor politicians.

Without mainstream political representation on this issue, divisive elements like Pauline Hanson’s One Nation party have emerged to wrongly use the ills of overpopulation to attack the small number of refugees arriving in Australia, as well as Muslim and Asian immigration.

As this submission has shown, there is strong justification to reduce Australia’s permanent migrant intake back to historical levels primarily by slashing skilled migration, which has been the driver of the influx. This would take the strain off the major cities, put a floor under wages growth, and safeguard Australia’s environment.

Australia could achieve such immigration cuts without affecting its global obligations via the humanitarian migrant intake. Indeed, much of Australia’s 130,000 strong permanent skilled migrant intake comes from countries where skills are more desperately needed than in Australia. Australia’s immigration program is depriving these countries of skills, and we have a moral obligation to limit the brain drain.

More broadly, Australia desperately needs a national debate and a population strategy, led by the Australian Government. The Government needs to conduct a population plebiscite asking Australians how big they want the nation to become, and then set immigration policy accordingly. The Australian Government also needs to provide a comprehensive plan detailing how and where it will accommodate all the extra people, while safeguarding incumbent residents’ living standards.

Comments

    • The walls are cracking orright:
      The NAB bank needs to make 1000 positions redundant every 6 months as part of a plan to cut a total of 6000 jobs over 3 years while bolstering its workforce with 2000 technology specialists;???
      Robot specialists!

      • 32 mins ago: Westpac to phase in AI across the bank ,,One of Westpac’s top tech executives has revealed the bank is working on a range of artificial intelligence-driven plans, and says the technology is maturing fast

  1. I think the lady from the Migration council knows the popular view with the public. If she thought that the current levels of immigration were popular with current population then she would’ve been happy to go along with the notion of a plebiscite.

    • It’s always a telling signal when one side of the debate is desperate to prevent the citizens from expressing their preferences!

      It is – after all – their country.

      Isn’t it???

    • Philly SlimMEMBER

      We need to get that lady from the migration council more press opportunities. because she is hopeless.

      perhaps if we explained there are less kit kats per capita in a high migration case she may moderate her views?

      • Actually not a bad idea. Elections have been won and lost simply by giving the other idiot more air time. As much as LVO made sense and presented good arguments, having the public simply aware that there is a lobby group that is by nature designed to drive immigration rates would yield amazing results.

  2. Running high immigration blows out the current account deficit. If we double our population we double our imports but it does nothing for our exports. Imagine if we had a population of 5 million we would be running large current account surpluses and gdp per capita would be higher.

    The irony is the more we blow out the cad due to high immigration government will never be able to run a surplus and will cut services to the existing population due to the ever increasing fiscal deficits, always chasing the magic surplus dragon.

  3. Leith, your post is excellent. Chock-full of useful arguments and nuggets of data, and you make great use of the Productivity Commission Migrant Intake report, which is a goldmine on this topic. The shamelessness of outfits like the Migration Council seem to know no bounds. It is time to follow the lead of the PC report and call for an injection of democracy into the setting of targets for migrant intake, and linking it to a broader population policy. We are not going to take it any more from the small but powerful clique of special interests who claim to know what we want, but are not prepared to give us a say.

    If I may also include mention of my own submission to Dept of Home Affairs:
    http://www.peakdecisions.org/2018/02/managing-australias-migrant-intake-submission-dept-home-affairs/

  4. Nice work Leith, I thought you got the better of that exchange, despite Carla being given more air time. She just couldn’t seem to bounce back from being revealed as a rank lobbyist.

  5. CharlieChaplinMEMBER

    Peter said “We are not going to take it any more from the small but powerful clique of special interests who claim to know what we want, but are not prepared to give us a say..”

    Perfectly expressed my friend. +100000000

    And well done Leith!

  6. Thank you Leith for your constant, systematic and well reasoned approach to this issue. Massive thanks and well done on the programme tonight against some odds.

  7. CharlieChaplinMEMBER

    Pity Patricia shut down discussion about the Migration Council’s credibility as a lobby group, as this does go toward their credibility. But nicely rallied Leith. Nice how you managed to squeeze the last word in though.

  8. Pauline Hanson’s One Nation Immigration Policy 1998 …

    australianpolitics.com/1998/07/01/one-nation-immigration-policy.html

    Interesting read wether you agree with One Nation or not; and this was their policy in 1998 just when the gates were thrown open.

  9. Well done Leith. I also encourage you to focus on the damage caused by overpopulation on our environment. Humans will come and go, live and die, but the damage we do to our environment and our native animal species is permanent. Habitat destruction alone is pushing species to the brink. The amount of polution created by every individual has reached a point where we are now destroying and poisoning our environment to the clear detriment of ourselves, our children and their children. Human population growth is killing us all, and Cape Towns water woes are just a taste of the dangerous times ahead if this nations ‘leaders’ continue the ‘growth is good’ con.

    I’ve been a member of Sustainable Population Australia for many years, and quit the Greens in disgust due to their failure to address (let alone acknowledge) the damage caused to Australia by population growth. I’m now a member of Sustainable Australia (previously Sustainable Population Party).

    • Been talking to educated family members about SAP, at least those who are disgusted at the state of affairs

    • boomengineeringMEMBER

      We could reduce Australia’d pop by deporting those unpatriotic in gov’t, eg Tony Abbott’s letters, WA’s Labor Gov’t approving 99.7% of all applications to destroy historical monuments since 1972, sledgehammering of our first monument erected 1656. Destruction of 95,000 petroglyphs at Dampier dwarfing the Taliban’s achievements. All this against UNESCO’s wishes.
      Caught a taxi Sat with a Pakistani driver only been here under 10 years who thought immigration was too high.

  10. The Lobbyist [payed mouth organ] should have just said…. “the market” – demands – high migration…

  11. Well done. The MCA and Scanlan are pervasive, under the radar, and just vested Big business interests.
    The BIG problem is the bridge they have built with the left and migrant communities in regard to a Big Australia.

  12. Lovely effort. Smashing groovy.
    But knowledge, facts and biases aside she won this debate (not with facts but by being simple)
    Most will not have a clue of what LvO said whilst the opposition spoke in plain language and with acceptable emotion.

    For these debates to be won in the eyes of common tv plebes, a common and simple arguments on low level are required. Explain your position to a fresh import taxi driver (successfully) and you have what it takes for tv debates with low level lobbyist.

    • BaldbadgerMEMBER

      Unfortunately i agree. Keep it simple. Super simple. You are dealing with the public who are now accustomed to three word slogans. Attention spans are low and emotive phrases and words carry more weight than facts and figures that can easily be manipulated to support ones argument.
      One more thing…..PLEASE tell everyone that you propose to up the intake of refugees because we are are a caring humanitarian country. It’s just the total of all migrants coming in that we need to significantly reduce.
      That way you keep all sides of politics happy. Easy.

      • With respect, I think my arguments were far more simple than Ms Wilshire’s. I talked about livability and the need for a population plebiscite. She talked platitudes. I think the ordinary folk will understand my view because they are living with this mess every day.

      • Leith, it doesn’t matter what you think

        (that’s not meant to sound rude. And I think you’re doing an admirable and largely thankless job)

      • Stop the boats, yes we can, no more taxes, stop the waste, axe the tax… the best of them all. Make America great again.
        Do i hate them with a passion. Yes. But you are dealing with a public with a short attention span. Make it simple, emotive, personal and passionate. Then practise in front of a mirror or family till you nail it.
        Examples you could use:

        A kinder Australia
        A sustainable Australia.
        A nation for our children.
        Australia is about community again.
        An Australia for Australians.

        Cut to the chase. It’s all people want to hear.
        But always have the facts and figures ready to go when needed.

      • @ LvO / UE
        “I think the ordinary folk will understand my view because they are living with this mess every day.”

        Please take my previous comment as constructive critic. You did an excellent job in view of those that understand or want to understand the issues, alas they need little or no convincing anyway.
        I observed the whole conversation from outside the box and tried to see what a common uneducated tv person seeking tv shows for opinion forming would comprehend. Ordinary folk do not understand most common economic or financial language hence they need simple explanations for the problems using every-day colloquial language (e.g. too much water analogy, as below) rather than raw facts.

      • We don’t need to increase the refugee intake to show we are a caring compassionate country.

        The Refugee Convention has 145 signatories of which only 37 had resettlement programs in 2016, up from just 14 countries in 2005. Australia has consistently been in the top 3 countries for resettlement of refugees.
        Australia’s ongoing refugee intake has been 13,750 pa, it will increase to an ongoing 18,750 a year from the intake year 2018-2019. That’s a whopping increase of 36% … just how much compassion do you want?

        There are hundreds of thousands of people in Australia needing social housing and help, save the compassion for them.
        Advocates for increasing the refugee intake should remember, every new refugee needs social housing, that’s one less house available to a homeless Australian cos the refugee gets priority.
        Frankly the refugee resettlement program should be abolished, the money allocated to the program wouild be far more efficiently used spending it in the countries the refugees/asylum seekers are based. However i might win lotto tomorrow too, so if we are to have a resettlement program, it should be cut back to about 2000 tops and just women and children in dire need.

    • 1. When she starts saying “We need to keep this debate respectful”, or “..the feelings of migrants” she is implying that you are a racist- you need an effective 7 word counter to this that you can slip into a sentence on the fly
      2. Consider having a dumb dumb analogy at the ready so you can argue right down at the bottom level when you need to. Something like “You know immigration is a bit like drinking water. Its so very important, but if you have too much too quickly it can cause you problems.”

      3. Remember, he who frames the argument wins the debate. Always keep this in your mind- if you win the frame, people will award you the debate.

      You are doing great Leith and I am cheering you on!

      • Also, a great counter to “Immigration Nation” would be “Immigration Conversation.” When your ready call me and I’ll come on board as your media advisor starting at a base salary of 300k ok?

      • I’d contribute $100 to a marketing/lobby/slogan campaign.

        If someone sets one up, or shows me how to do it I’m in. Anyone else?

      • “You know immigration is a bit like drinking water. Its so very important, but if you have too much too quickly you’ll drown.”
        “Australia is drowning, jump on the 109 Carla”.

        That’ll shut the gluttonous lobbyist parasite up.

      • To Leiths credit, he never allowed himself to be snookered into a racist corner despite the clear “We need to keep this debate respectful”intentions.

    • Honestly, you guys must have watched a different video to me. Calling her out as a lobby group for example was the most honest thing I’ve heard/ seen on tv this year. Calls for a plebiscite for the people to express their opinion – geez if that’s not appealing to your average Joe what is?

      • I think Leith is doing an excellent job. I am just pointing out that he is up against a highly resourced and incredibly polished machine. If my mother had been watching that debate she would have glazed over for the facts and figures, memorised the catch phrase “Immigration Nation” on the spot, and responded strongly to the calm lady doing the racist dog whistling.

        Thats why I say debating beyond simple calm rationality is important. Leith needs to snap his preferred debating frames into focus and force his opponent onto that ground. “The people versus the powerful” as the right frame for the cause. And for himself, he needs to be framing himself as “David versus Goliath”.

      • i dont think theyre that polished. if she is the best thing theyve got to throw at us i’d hate to see the others in the lobby. seriously she looked dead on the inside, just no energy. meanwhile leith was alert, healthy looking and energetic, and he doesnt even do this for a living like she does.

        debates are won based on appearances and body language as much as anything – see the nixon/kennedy debate as a prime example.

      • Correct, UE won. A suggestion Leith. “I just want to pick you up there……” requires a very firm response. “you are unambiguously misleading the audience.” Your reply about the migration council being an lobbying advocate was great. A reply such as (list corporated names of directors) can make a lot of money out of migration without any effort and the public pays with lower wages, higher taxes and higher housing costs….. Privatise the profits and socialise the losses…. no wonder they need a Migration Council to keep the scam going. Just have a plebiscite… you wont like that. That would mean Australian would have a say instead of being ignored and having to pay all the bills.

      • It is true that a simple lie is easier to push than a complex truth. This should not stop us from trying to find simple ways to expalin the complex truth. Dick Smith cut through on many examples, but then he is criticised for being too simplistic! With SJWs, its hard to score!

      • CharlieChaplinMEMBER

        She was soon patronising when she said “…Leith I have to pick you up there.” Patricia shut down Leith’s counter argument before he had a chance to make it….he should have been allowed the right of rebuttal. When she brought up the “independent” study, she opened up questions about her organizations credibility. Patricia shut it down again, because of some misguided notion of “keeping it civil.” Patricia should have cut the mike to the lobbyist and let Leith make his point instead of letting her shout him down with her milky bland voice. I think Patricia, in trying to be fair minded, has done the opposite. Thanks Leith. Seriously I am truly grateful, I think you acquitted yourself brilliantly. I think the tactic of saying that GDP per person is only one factor, that its people’s lived experience of being changed from free range chicken into battery hens is the right one. Give us all the facts you want….I’m getting outbid at auctions, houses are more expensive, I’m stuck in traffic, I don’t care what your figures say, look at what I’m experiencing. One final point….this nonsense that we inevitably have to go to high density living, and we must change…seriously we design out society and our culture, not the other way around.

    • With the greatest respect, I agree it was probably a points decision to the lobbyist. Remember this is a person whose sole job is to serve up turds as chocolate mousse, so it’s not surprising. UE you did as well as you did (extremely well) because all the facts are on your side. As an ardent supporter of what you’re doing I say have a cold look at the segment and think about just how it was that the lobbyist was able to remain at least credible to a large segment of the audience. Appeals to clever sounding statistical voodoo. Dog whistling the racist card. Motherhood statements. Pure BS mixed in for good measure. If you develop your responses in advance and deploy them with the calm and authority of this mouthpiece you’ll kill it.

      • BaldbadgerMEMBER

        +1
        95% of the punters here agree with you on immigration. It’s just getting the message across to the masses. Not the ones here who can dissect facts and figures a little better than the average Aussie.

  13. As a born and bred Sydney resident, child of migrants, and husband to a migrant all I can say is – I have no intention of raising a family in an apartment in Sydney for the rest of my days.
    The only question is when to cash out of the Sydney rat race, and where I’ll be taking my skills to. Probably overseas. The migrant council can clean up the mess in this city, because I have no intention to.

    • Agree apartment living is certianly not for me. They can shove it up their you know what! We’re not rats to be stack 10×10 high for the interests of big business. We need sustainability. We want to preserve our way of life. Not ruin it like soany third world nations have by being over populated dumps.

    • Same here. She says we have to accept change, typical of how this whole issue is being couched by the pro-immigration lobby. No, we have a choice and guaranteed that the majority choice is being overlooked by the minority vested interests. We choose our future. Once again quoting Peter above ;
      ‘We are not going to take it any more from the small but powerful clique of special interests who claim to know what we want, but are not prepared to give us a say.’

      • The old ‘you can’t accept change’ or ‘we don’t want to go back to the 1950s’ that the pro ponzi lobby keep on re-iterating. When you argue with these pro population ponzi people and they are on the back foot, they resort to this.

    • When these think tanks suggest we should start living in apartments somebody needs to pull them up on how many new apartments are 3 bedroom, i.e. designed for families. There are so few that rent going from 2br to 3br apartments is easily 30-40% more expensive, heading into penthouse sort of prices. So there aren’t any most families can afford even if I wanted to move into one. Apartments in Aus are build for investors, not families.

      • Should also be asking these folks if they live in apartments…. Sure it’s easy to say everyone else should, but unless they are already doing it, it’s a bit rich to say shut up and put up with it.

      • Exactly Gavin. Immediately after she said we all have to realise we are going to have to live in apartments, Leith should have turned and said “so how many people on the board of the immigration council live in apartments? How many use public transport? How many use public education for their kids?”

        Pretty sure I know the answer to all those questions.

  14. Wow. Just proves you need to really look into the strengths of your opposition before you start spouting on areas you have little clue about. When the professional meeting goer decides to take you on over per capita data she makes a fatal error. Nice work Lethal.

  15. Quote Peter Scanlon;
    ‘My primary driver in (setting up the foundation) is if we don’t have growth we are going to lose all our youth because the world is looking to train people around the world,” he explains. “Instead of having stagnant growth, we’re going to have a serious decline.”’

    Lose our youth? Is he serious? We can’t even house them. Their education has been trashed and devalued by the new immigration, path to permanent residency model. Our kids ARE leaving Pete, right at the peak of your immigration solution. Instead of flying around in your private jet blowing that $600m, use some of it to buy some perspective.

  16. Great work Leith but it leaves me with this one nagging conclusion:
    Australia’s Human capital is all but worthless!
    In effect what you’re saying is that Mines have value, houses have value, beaches have value and that value should only be shared by a select group of Aussie born, this one “true fact” guides all that comes after it . If you can’t see the obviousness of this true fact than you’re probably not an Aussie and definitely don’t belong here.

    Trouble is there are still a few true born Aussies that value creativity, innovation, invention, entrepreneurship, Aussie for whom the verb hustle has positive connotations, Aussie that use their skills, knowledge, energy and enthusiasm to build something that’s brand new. These Aussies value human capital and strive to develop it achieving their maximum potential, lets be honest their failing is that they don’t worship dirt, in all it’s forms….and that’s just plain unacceptable, F’me it’s unAustralian.

    • U are correct, the majority of human capital in this joint is required as grease to lubricate the mechanics of the national debt imbalance.
      I just ran some numbers : Back of the envelope, guess what
      The cost of unfunded pension liabilities and Medicare is 2x to 3x the published national debt.
      The current published national debt is equal to GDP 2018.
      All these migrants are NECESSARILY required as slaves to pay for pensions and medicare. They have no other use.
      It is probable that migrants will not receive pensions as the till will be empty. It is that dire!

      • Yeah: What happens over the long haul if Aussie Labour has zero real world value?
        Surely the rich Aussies, that own this country, will first decide that they don’t need extra people, quickly followed by the realization that they don’t actually need the people that they already have. Hmmm maybe it’s smarter to simply grow our economy through increased labour and product differentiation. A bigger pie that comes in a whole bunch more flavours, sounds good to me…but of course there are those of us that only ever order apple pies, all they ever seem to see a smaller slice of pie landing on their plate, that’s a sad way to go through life.

      • > It is probable that migrants will not receive pensions as the till will be empty.

        That’s why we are importing migrants from countries where there is no pension and when they retire they are looked after by their kids. As far as the Aussies are concerned there is a simple solution – adopt a few kids from Asia, best in their mid twenties when they are most productive. We could introduce a special visa category to support this type of immigration to make sure that the adopted kids can’t wiggle out of their commitment 🙂

  17. Well done Leith. That interview a good example of what you are up against. Endless propaganda from rent-seeking “independent” groups, and when you corner them with factual debate they are going to use an immigrant as a shield and beg you not to hurt the immigrant.

    • Yes they talk about challenges and things ‘we have to get our head around’ but NEVER a strategy or solution. Professional meeting goers at lunch, morning tea and any other networking junket they can get their hands on. Oxygen thieves.

  18. Leith makes a rational argument backed up with concrete facts and statistics. While the Migration lady/automaton chants the Big Australia fairytale mantra.

  19. “Part of the solution is to reduce the per capita cost of infrastructure”

    We need more people to solve the problem of too many people.

    This country is run by the best. Ask them to put numbers to the waffle.

    How many hundreds of billions are needed to become a functional city?

    Then talk maintenance, and ongoing hundreds of billions. Where’s the money coming from?

  20. An infographic encapsulating this TL:DR article into something digestible for the masses would help your cause

    Perhaps even an explainer vid using Shakr, Powtoon etc, condensed into a 2-4 minute video.

    If you want the message to be more easily spread, that is.

  21. I am not convinced that the market is pricing in the risk associated with a change in population YoY growth. I expect the blind to remain blind and the greedy to remain greedy until multiples show signs of risk being priced in. I would hope that investors decide to start looking at a way to articulate how much Aussie companies will slow if we attempt to fix an obviously broken immigration system.

    AU population YoY informally drives a concerning amount of revenue growth on the ASX and for SME (reduced labour costs AND a growing consumer base). It will take a magnanimous man or woman to heed the call and be the face of much needed change in this country. I hope our collective greed does not lead to the continued degradation of our once beautiful country.

    No matter what we think, this is only the beginning.

    • Interesting take: Risk is obviously a function of rate of change in population, but your equation kinda presupposes that we have a static economy.
      What happens if we assume that for GDP to remain constant we need an economy that is changing at a given rate. There’s a lot of evidence to support this concept because like it or not all products exist on the sliding continuum ranging from highly differentiated to highly commoditized. For the differentiated product we willing pay a premium yet for the commoditized product we haggle mercilessly to achieve the lowest price.
      Therefore any nations Wealth that’s built upon a commodity base is doomed to eventually fail…it’s just commodity pricing economics at work. Now contrast this with an economy where participants (both inside and outside the country) strive to own Differentiated products (not necessarily just new but all forms of high value products …luxury items, bleeding edge technology, branded merchandise, gourmet food, fast cars….)
      If the Differentiated product is itself the product of the nations changing demographic then your initial equation, simplified as
      Economic Risk is a function of rate of change in population
      needs to be modified because this economic risk exist in both the denominator and the numerator, If we fail to maintain a sufficient rate of economic change to create value in differentiated goods than we risk our economy sliding into the commodity value trap.
      One thing I do know for certain is: It’s impossible over the long time frame for a high wage economy to fund its growth (or even sustain itself) by only developing/exploiting commodity products because unfortunately the revenue side of that equation is guaranteed (over the long haul) to trend lower.

  22. well done Leith
    Your request for a plebiscite was absolutely brilliant. It totally disarms your opponent, after all they can hardly say bad idea to a plebiscite as this is an affront to the concept of democracy (in fact I epxcet your opponents to be smart enough to duck the question and take you off on a tangent / distraction or attack you on something else to directly avoid answering the question) . Keep asking in all future interview for a plebisicte till it enters the consciousness of the people (the old trick of repeating and repeating and repeating the request for a plebiscite until everyone agrees this is the best way forward), after all we were asked to do a plebiscite on gays right, so people are now familiar with the mechanism and see that it works to reflect the view of the people. . Let the people decide, they own the country. and keep asking at all interviews for the plebiscite on migration

  23. That’s the very best counter population growth argument I’ve seen. Leith said exactly the right thing at the right time.

    Loved the spirit of it when you talked about them being a lobby group. Because my demeanor isn’t consistent with what’s somewhat an academic publication, I know I’ll eventually get baannned again. I’m okay with that. I’ll keep coming back for more MB.

  24. It would be interesting to hear that woman explain why high immigration didn’t save the car industry.

  25. Hi Carla if you’re reading, how does living in an apartment instead of a house improve my standard of living? If more immigration is so good for the economy we should be easily be able to afford better infrastructure, why has it fallen behind so far? How on earth can a nation of 24 million people have skills shortages? If it does then shouldn’t we fix education? Why aren’t you lobbying for that?

    • This. Exact. Point.

      “We have to look at apartment living” or whatever the hell she said. Nothing encapsulates the deterioration in living standards more than this. Historically, a large-ish house with a garden was achievable on one income close to employment. Now, its a dog box in the burbs at 8 times your income while you’re crush loaded onto a tram or train, forced to sniff the armpit of humanity for 10 to 20 hours a week.

      Leith you did a marvellous job. Remaining calm in the face of these population zealot spruikers intent on selling our kids prospects to their donors is an achievement in itself.

      Good points, well made.

      Your suit looked good too for a bloke who struggles to get dressed most days 😉

  26. Just some observations:

    Like any politician she was quick to talk and shout over you and rather than continue to try and argue minutiae around GDP per capita you needed to take control first – I hear this a lot on Radio National interviews when they have politicians from both sides getting into arguments. The next time you realise this is happening, all you had to say was something like, “Please let me finish, as I was polite enough to not interrupt you when you had your turn.” She was clearly the one being more disrespectful, yet managed to subtly turn that towards you at the end.

    In terms of your opening statement line; I don’t think historical trends since federation is going to excite a lot of viewers. Fully explaining this concept (historically we took 70k, now it’s triple and the migration council want it to go to 250k, that’s too high etc.) takes a long time, and what do those numbers actually mean to the average punter? Large numbers can be hard for the brain to conceptualise, so I think also using previous comparisons about “adding the equivalent of an extra Canberra/Adelaide every x years” may have more impact and work better as a sound bite.

      • Relax, you did just fine. One always thinks of what one could have said later. The mere fact that they need a Migration Council speaks volumes. This issue is now front and centre largely because of you. Where does the Migration Council get their money from?

  27. Great work Leith. I’m happy to pay my subscription to support these efforts! 🙂 And how good is it to see there arguments finally making it out into the MSM. Would never have happened only a couple of years ago.

  28. Clearly, you are an economist Lieth, but there are good studies showing that social cohesion is undermined by excessive immigration levels on a number of metrics. Maybe find a guest sociologist to comment on this.

  29. Brilliant Leith. The last thing that lady wants is to be exposed to reality of fast paced immigration, and I’d suggest her and her organisation desire to pump demand for their own benefit. Nice to be told that all we can look forward to is an apartment. I also, note she turns to not upsetting the migrants, well we’re all migrants, and she upsets me. One thing to pump GDP by immigration, but look at the economy we have as we effectively import everything now, and where will the jobs be in STEM, and an engineer it’s more of contract it to foreign corps, along with more skilled migration of 457 or whatever. In the meantime dumb down the locals. As you say, let us have a say.

  30. Great work UE. Sadly, I concur with those who’ve said maybe it was too good. Don’t overestimate the intelligence of the public… one only has to look at the parade of dickheadery we’ve had as leaders for the last 20 years to come to the conclusion we are, collectively, a nation of morons.

  31. “And in some senses it’s also about an acceptance that the way in which these two cities function and the way in which we live in these two cities is going to change over time; it’s going to be much more about apartment living, it’s going to be much more about public transport, and it’s going to be much more about sustainable cities of the future.”

    Someone pass me the lube whilst I bend over…

    It seems to me that there are two reasons why people might immigrate to Australia: (i) for a better quality of life; (ii) to extract finances to send home. As for (ii), I’m not sure why we should be comfortable with this at all, given current unemployment rates, particularly at the young Australian / graduate end—perhaps that’s a matter for another occasion. As for (i), presumably this means that, without adequate controls on migration, quality of life in Australia will be allowed to decrease until it is equal to that of the countries from which these people are emigrating, such that there is no longer any desire to emigrate.

    We are being raped (figuratively) & pillaged (literally).

    • I commented on another MB post last week that when you let in a sudden tsunami of foreigners, they don’t become Australian, Australia becomes like wherever they came from. And that is not a good thing for Australians.

  32. MediocritasMEMBER

    Really well done Leith! I love how you managed to get in that hit about Carla being a lobbyist. She also fought dirty by insinuating racism. All the talk about “respect”, while not aimed directly at you, was intended to be associated with you, thereby sowing the mental seeds that racism might be involved here and that the listener had therefore better side with Carla: “the respectful one”.

    Dirty, dirty trick but you parried it well after she struck with it three times, particularly with the final comment.

    Watch out for that tactic in the future. It gets used over and over by the “social justice” types when they don’t actually have an argument.

  33. I wrote my earlier comment while seething after Carla’s comments telling me about how I now have to accept that I’m destined to live a life in an apartment if I want to stay in Sydney. What I forgot to do was congratulate you Leith on a killer performance! Keep it up mate, that was your most punchy performance so far going toe-to-toe with one of the main proponents of the pop ponzi and coming out looking the most educated, honest, and caring of the average punter in comparison to the “lobby group”. If only Lucy Turnbull would step up now for your next battle in the ring.

  34. Excellent work Leith.. keep up the good work. Going to re-subscribe to MB after seeing this..

  35. The PC’s modelling did find that GDP per capita would be 7% ($7,000) higher by 2060 under current mass immigration settings.

    Any fool might increase average GDP per capita (one off) by skewing the population distribution towards working ages. But that skewing and the immigration that causes it has to be permanent for its effect on GDP per capita to be retained permanently.

    Seriously, how big does Ms Wilshire want Australia to become?

    If, as any rational person expects, that rate of immigration has to be stopped one day then its skewing effect on population distribution will also come to an end and the temporary bump in GDP per capita will be reversed.

  36. Absolutely brilliant work Lethal Leith!! Taking on one Growth lobbyist group after the next!! Love it! This plebiscite has launched as of last night – bring it on!!!!

    • Yes, really good. And from my chatting to people,the issue is starting to be discussed in the general community also.

  37. Mining BoganMEMBER

    Geez Unco, that netball lady really, really wanted to call you a racialist.

    Betcha she screamed it at the first white man she came across when she left the studio.

    • I hadn’t thought of that, that is a very good point. Leith did nix the racism tag very well by concentrating on the post war average, however, as I have posted below I think Wilshire had been strongly briefed on Leith’s argument which I think shows that Leith has got the ponzi lobby rattled.

      • Mining BoganMEMBER

        Definitely prepared. That’s the first time I’ve heard anybody talk about GDP per capita outside of these pages and maybe a Grog or Michael West column.

        She looked quite smug when she threw the numbers out too. You could see her thinking ‘Gotcha’.

  38. Leith,

    That was a very interesting interview because Wilshire was prepared for you, she had obviously been briefed on the detail of what you have been saying for a long time.

    This is an interesting development and shows that you are making headway. It also means you will have to work harder and you might find you will need to spend time countering detailed arguments (which you do in this post) but it shows that the ponzi lobby has recognised you as a threat.

    Now, lets get the Labor party to change its mind. If we can do that then we can forget the ponzi lobby.

  39. I don’t know if this has been said yet but the Migration Council hasn’t put up any data supporting their arguments like you have. It was great that you led the interested viewer to the Macrobusiness site to get more information to substantiate your points. This will be useful for any people who are genuinely interested in making a decision for themselves. Well done Leith you are doing a great job.

  40. Great work Leith.

    I wonder if you can burst her ‘we’re just a not-for-profit’ shtick with a declaration of her salary – I’m sure it’s not modest, and would certainly indicate to the plebs exactly where her bread is buttered.

  41. Is the government deliberately making the intake more Indian and Chinese so that we can’t criticise mass-immigration on the threat of being ‘racist’?

  42. Next time, talk about increasing refugee intake and reducing skilled migration – that will stop the moralising and the he is a rashist dog whistle.

  43. While I think Leith did a good job, in a way it was taking a knife to a gun fight. Leith bases his argument on factual analysis, whereas the opposition don’t have any facts so their techniques are all based on manipulation and spin. That actually gives them an advantage, because they know in advance what arguments they will face, and they can concentrate on guerilla tactics. It only takes one well placed grenade to rattle someone who is sticking to a logical argument. It is a different game.

    Those guys (no matter how much you hate them) spend a lot of time preparing for this. It is their job! They know in intimate detail the weaknesses of the audience, and they play them very well. They got a lot of mileage from the fact that their spokesperson was a woman. Women are agreeable, sensible, compassionate and anti oligarchs – so when she says in an impassioned tone “immigration makes us better people” or similar, it is a hit of puppies, kittens and apple pie straight to the blood stream. They actually exploit the fact that someone like Leith is honourable and will stick to the facts. They see that as a weakness to exploit.

    When it becomes clear that the opposition is using dirty tactics, it may be that the only way to go is to resort to similar tactics. That would mean very short word bombs that cut through to the audience and leave the opposition compromised and searching for a way out. I think a few of those would have left Miss Piggy gasping for air. I have been thinking of a few, and I am sure other people can think of some as well.

    o “If our politicians are too incompetent to build infrastructure then we have no alternative than to cut back immigration until they get their act together.”

    This is a great wedge, because it shifts the blame to politicians and makes immigration a victim of the politicians. No racism is involved at all. Puts all the blame on the politicians.

    o “Ask any mother with small children if she wants to bring them up in a Vertical Slum with no backyard”

    This wedges the Wimmin factor. It suggests that women with children are being discriminated against by overcrowding. It also puts Miss Piggy on the spot, because she risks exposing herself as a childless harpie. New memes like “vertical slum” are great because they hit hard and require a huge amount of weasel to refute them. Lots of viewers will get a kick out of that, way beyond any logical argument.

    o “You say that high immigration is making the country stronger. How is it that during the highest immigration in our history we shuttered our car industry and pushed thousands into unemployment.”

    Most people will only hear “shuttered our car industry”. The opposition will have to be very quick thinking to get out of that one. Basically, people do not think in logical terms. They think in memes. There are a huge number of memes out there that the public will have absorbed. If you can activate those memes then you will control the argument. Sad, but true.

    o “So you are saying that crowding and lack of infrastructure is a problem, but more immigration is one of the solutions? Did you hire John Cleese as a policy advisor?”

    Some of their arguments are absurd, and the only way to bring this home is to mock them. A one liner can hit hard way below the belt.

    It is not quite the same, but the interview with Jordan Peterson and Cathy Newman was quite an eye opener. He managed to shut her down on every specious point. We probably won’t see a format like that on our TV however. What it does show is that modern media “debates” are ruthless and gladitorial.

    • Excellent points well made. Now in full view for the Migration Council team to review and plan their responses. A full time army of paid lobbyists vs a privately funded small Australian business. Cant see this ending well.
      As the lobbyist suggested …. Get used to it. In fact, they want to accelerate.

    • Great points DarkMatter. An acid tongue retort can do a lot more damage to her weasling arguments.

      Spinning the platitudes she spewed in the “debate” is the best way. Perhaps MB should consider adding a female to their ranks. It would help with those cognitive biases especially women being more agreeable, sensible, compassionate and anti oligarchs.

      That Jordan Peterson and Cathy Newman interview was difficult to watch. He was brilliant.

  44. Excellent job Leith! Even more impressed the second time I watched it. Hope you are able to get on more shows like Q&A and The Project – as many as possible. What you are saying is true and is easily understood by most Australians in Melbourne and Sydney who experience the repercussions of the current population ponzi every day. Don’t think you need to dumb it down at all.

  45. What everyone’s trying to tell you is that you don’t win the crowd with facts and rational arguments.

    It’s about the feels, not the reals.

    Hence the reason the right has been so successful. 😉

    • Are you hallucinating? Watch the Jordan Peterson v Cathy Freeman interview. The left was the perfect opposite of rational and factual. What is wrong with your brain??

  46. Holy shit I just googled the Migration Council and sure enough, stacked with business types. The chair is Innes Willox?!?!? They don’t even have a token non white guy on the MIGRATION council.