Gittins, Shann, Aird, Carr demand immigration cut

By Leith van Onselen

Over the weekend, News.com.au’s editor-at-large, Joe Hildebrand, proclaimed anyone wanting to lower Australia’s immigration program back towards historical levels is a “racist” and resorted to the usual flawed arguments to support current turbo-charged levels:

When the right calls for cuts to immigration it’s called “racism” but when the left does it it’s called “urban sustainability”. In fact they’re both saying the exact same thing: “F*** off, we’re full”…

…And so here is why cutting immigration is idiotic and wrong.

Firstly, there are basically only two categories of regular immigration in Australia: Skilled and family. Then there is a third humanitarian stream for refugees…

The vast majority of this — more than two-thirds, or 128,550 — is the skilled migration program in which migrants are sought out to fill shortages in the workforce. These include things like doctors in understaffed hospitals or specialist engineers for major infrastructure projects. They also include jobs that, frankly, native born Australians often won’t do… [T]he skilled migration program is vital to keep Australia moving…

The second category in the regular migration program is so-called family reunion, which accounts for virtually all the remaining 30 per cent — 57,400 to be precise…

More than 80 per cent of “family” migrants are the husbands or wives of people like you and I…

Which of them would the anti-immigrationists like to ban from Australia? The medical diagnostic radiographer? Suzie from Sussex you proposed to last night at Icebergs? The old digger who just wants to come home?

Upon reading Hildebrand’s rant, the phrase “a little bit of knowledge is a dangerous thing” immediately sprung to mind. If Judgement Joe had cared to examine the evidence he would have discovered that Australia has no “skills shortage”, that there is widespread visa rorting going on, and that Australia’s so-called skilled visa system is a giant fraud, whereby:

  • many recently arrived skilled migrants (i.e. arrived between 2011 and 2016) cannot find professional jobs;
  • many skilled migrants have gone into areas that the government’s own Department of Employment has judged to be oversupplied (e.g. accounting and engineering); and
  • migrants have generally worse labour market outcomes than the Australian born population.

Regarding family reunion visas, the Productivity Commission’s (PC) 2016 Migrant Intake Australia report explicitly recommended significantly tightening parental visas and raising their price, given they are costing taxpayers an estimated $335 000 to $410 000 per adult, or between $2.6 and $3.2 billion per annual intake in present value terms (and growing).

The PC (another racist) also doubled down against parental visas in its recent Shifting the Dial: 5 year productivity review, claiming that their long-term costs to the Budget are enormous:

… parent visas, which provide a short-term benefit to the budget via visa charge income, but impose very large costs in the longer term through their impacts on expenditure on health and aged care, and social transfers. In previous work, the Commission estimated the budgetary costs associated with the 2015-16 parent visa intake alone to be $2.88 billion in present value terms over the lifetimes of the visa holders. By comparison, the revenue collected from these visa holders was only $345 million. Ten year estimates of the fiscal effects of the current parent visas would show a similarly stark disjuncture between revenue and costs, and would therefore provide the insights for a more informed policy decision on the pricing or desirability of these visa types than the current decision-making framework.

So to answer Judgement Joe’s question about who “the anti-immigrationists [would] like to ban from Australia”, the rorted skilled migrant program and parental visas are a good place to start:

Slashing these rorted programs could easily return Australia’s permanent migrant intake back towards the ‘normal’ historical level.

Thankfully, Fairfax’s Ross Gittins yesterday provided the perfect antidote to Judgement Joe, arguing that mass immigration is a “cheap and nasty way to grow the economy”:

There are at least four counts against the advocates of high immigration. First, their refusal to engage with the academic environmentalists arguing that we’ve exceeded the “carrying capacity” of our old and fragile land. Scientists? What would they know?

Second, they keep asserting high immigration’s great economic benefits, blithely ignoring the lack of evidence. Whenever the Productivity Commission has examined the issue carefully it’s found only small net effects, one way or the other. Its latest modelling found only a “negligible” overall impact.

Third, the advocates not only decline to admit the high social and economic costs that go with high rates of immigration, they decline to accept their share of the tab, doing all they can to shift it to the young, the poor and those on the geographic outer, including many of the migrants.

You rarely hear pro-immigration economists acknowledging the clearest message economic theory gives us on the topic: more population requires more spending on additional public and private infrastructure if material living conditions aren’t to deteriorate.

The more we invest in such “capital widening” to stop the ratio of capital to labour declining, the less scope for investment in “capital deepening” to keep the ratio increasing, and so improving the productivity of our labour.

The fourth criticism of high immigration is that it’s the cheapest and nastiest way to pursue economic growth. You get a bigger economy, but not the promised benefits. The studies repeatedly fail to show high immigration leads to a significant increase in real income per person

In principle, one productivity-enhancing effect of high immigration is that you get greater human capital on the cheap by pinching it from other (mainly poor) countries… But as Dr Bob Birrell, of the Australian Population Research Institute, has shown, there’s a big gap between the claims made for our skilled migration program and the reality. We let in people whose skills aren’t in high demand, and plenty of them end up driving taxis…

High immigration may suit our rent-seeking business people, but it’s a hell of a way to pursue the professed benefits of economic growth.

Another highly-regarded grey beard economist, Ed Shann (former Australian Treasury, Access Economics, and BCA) also backed immigration cuts:

…there is a strong economic case for less migration…

The economic benefits to current Australians from migrant inflows, in terms of income per head, are small at best…

It does not create the skills needed, with many migrants unable to work in their area of skill…

The downsides of high immigration are greater congestion and rising house prices in the major cities, where migrants prefer to live.

…the locals most likely to suffer are the lower skilled and youth…

The strongest argument for cutting migration is the failure to invest in infrastructure needed to support Australia’s rapid population growth… Increasing congestion risks a backlash as our cities become less livable…

Until we improve the infrastructure in our major cities we would benefit by reducing numbers and improving the employability of migrants.

Pretending their is no problem will only fuel opposition to migration.

 Whereas young gun, CBA senior economist Gareth Aird, openly questioned the efficacy of Australia’s turbo-charged migrant intake on Sunday’s Outsiders program:

“Immigration is great just like salt is great. But we’ve got to get the level right. If you put too much salt in your food, it doesn’t do us a good service…

At what level do the benefits start to wane and the costs start to outweigh the benefits?…

The evidence suggests at the moment that there’s a net cost to what we are doing. The rate is incredibly high… there are a lot of costs related to what’s happening with dwelling prices, what’s happening to public investment – it’s being diluted by more people, we’ve got traffic congestion on the rise, I think at the margin it suppresses wages growth because you are flooding the labour market with supply”.

Finally, Bob Carr on Friday called for the migrant intake to be cut in half, as well as for the federal government and Australia’s elites to shoulder their fair share of the burden that comes with rapid population growth:

“I want a population policy that says for every extra 25,000 people who will arrive, the Commonwealth will make a commitment for so many kilometres of extra light rail, underground or bus only transitway.

“Second, those ‘big Australians’ who tell us that we have to have the highest rate of immigration should accept that there’ll be rezonings and should share some of the increased density.”

All make far sounder arguments than the “racism” cries of Judgement Joe Hildebrand.

[email protected]

Unconventional Economist

Comments

  1. The guy is not an idiot. I am of half a mind that it was just a bit of pot stirring. Very hard to actually take seriously given the reality of living in Syd/Melb – unless people like that actually do live in a bubble of privilege. Maybe he is he is building a profile that represents the inner city elites? I actually can’t work it out. There were no comments on his piece, so we can’t tell.

    • He is stiring the pot to let us all know what a virtuous man he is. How he is superior in morals, intellect and wisdom to everyone else. He is one of the chosen few who really understands things. He has special insight into issues that escape everyone else and he is letting us know this. Bow down to his superior ideas.

      • AngryMan, you do not yet realize your importance. You have only begun to discover your power. Join me, and I will complete your training. With our combined strength, we can end this destructive conflict and bring order to the nation.

    • “unless people like that actually do live in a bubble of privilege”

      Exactly what it is.

      Two motives 1. Do what the boss wants. 2. Keep the six times average wages flowing.

    • The fact that they had to get an editor to write the piece – that they couldn’t find a credible expert to do it – says a lot I think

    • Even StevenMEMBER

      There are many forms of idiocy… and looks to me like Hildebrand has the worst kind – arrogance.

  2. Penny Lancaster

    The Hildebrand piece was bizarre and nigh on unreadable – shouldn’t have been published without further editing

  3. Hildebrand’s a goose. I remember him on the online forum the Punch. Seen him on that stupid show with Jessica Rowe and Ita? He has this ridiculous look on his face waiting to interject an otherwise good debate with some inane comment.

    Who cares what some inner city overly paid journo says? I’ve seen him around a few times. Doesn’t like inner west development. Too funny.

    The ridiculously enormous wages in journalism are hurting Australia. They seem to have tripled while everyone else’s went backwards.

    • I bet Joe Hildebrand is contributing more to the multinationals’ corporate bottom line than six of ordinary folks do, which more than justifies “the six times average wages”. If wages should reflect the employees’ contributions to corporate profits, he should be paid even more. But then again, businesses never overpay wages, you know!!!

  4. While I am with the people who hold justified concerns about what kind of people are being let in and then pandered to on PC grounds, I am broadly in favour of immigration of any quantity as long as it is people who “pay in”, and as long as urban growth policy is as well-formulated as it is in most of Southern USA, so that real economic growth and truly productive investment including in infrastructure, is the result rather than urban dirt Ponzi.

    • The real estate bubble is a policy choice of the Greens and hurts the refugees they claim to love.

      The urban growth boundaries shall not be abolished – those are a policy choice of the state Labor governments.

  5. When I first started reading that article by Joe, I thought it was going to call for immigration to be cut!

    PERHAPS the most disturbing global trend of recent years is the crude interlocking of the far left and the far right into one single beast with two backs.

    As we know from Hitler and Stalin, when the extremes of the left and right get absolute power they are virtually indistinguishable.

    ie, right wing pricks have open borders in order to destroy everyone bar the capital class and the braindead left wing have open borders because they think mass illegal-wage immigration has no impact on the incumbent population.

    Jeremy Corbyn ran dead on Brexit so as not to offend his anti-establishment base.

    Um, Corbyn voted no to joining the EU in 1975. He never liked the EU.

  6. Easy fix, make the skilled visa’s contingent on wage payment at average wage or above for the named profession. Then cross check with payroll tax. Prison for those standing over their staff for a kickback of the wage payment. The more a company uses the visas the harder it is to hide. So if your whole model is visa labour, well you better be paying them right.

    This is not about oracle hiring a skilled database guy from OS. It is about the hairdresser full of overseas staff, where the skill shortage is simply a symptom of not paying enough for talent.

    • If I were dictator I’d set the wage of work visas at least one standard deviation above the occupation average. That way, anybody being brought in must have some special skills, this will also encourage local business to train people up like they used to.

  7. So stupid and patently ridiculous is his piece that he is a great asset to the anti mass immigration cause, just like the self righteous fake greens and fake left. However, this is a long war, and first must come the pain and confusion of the splutterings of this empty debt bubble machine aka the Oz “economy” before the cause is won. Sadly, there is no painless way out now. .

  8. Ergh, Joe Hildebrand. Another self-important wanker who thinks his opinion matters because he has a platform. Guy even wrote an autobiography – literally who the fk are you Joe?

  9. Lester Pearson

    Anecdote on population ponzi.
    The level crossing removal started yesterday in Fairfield, Ivanhoe, Alphington – etc.

    For the train travelers there was buses and staff on hand to help assist and guide train travelers through the congestion, providing information and advice and trying to manage the situation well. They even had coffee and muffins at Clifton Hill.

    But they weren’t the ones affected really. Times for people in cars went from 5 minutes – to an hour and a half. There was no access from one side of the tracks to the other for several kilometers – maybe 5 or more. Major roads had been shut with no consultation with other infrastructure projects which had also shut multiple other side streets and roads causing total mayhem.

    There was no directions anywhere – save a couple of “DETOUR” signs which sent people to dead ends. There was no staff, no assistance, no guidance – nothing. Just hours of extra travel for a 5 minute car trip to drop off the kids.

    My wife left at 6:30am to get to work by 9am – a train trip which normally takes her 30 minutes.

    All of this – for no tangible benefits in travel time for train travelers, minimal benefit to road users and entirely a “safety” issue. All of which could have been avoided with better planning and mitigation and communication.

    This is going to become news in the next few days as it is just SO bad.

      • In total – it will be almost 18 months of disruption for the train station at Alphington. Roads have already been closed off for almost 12 months.

        Compare that to a new train station – totally new – including rails in China.

        https://www.youtube.com/watch?v=D42pweYvkUY

        The point is – planning, preparation, coordination – synchronicity. When you flog absolutely everything off to the lowest bidder and the them all “go at it” in a free for all with literally NO CENTRAL COORDINATION – you end up with this total disaster.

        The paradigm being presented here is that centrally planned and controlled operations can and are frequently VASTLY superior to “free market” decentralization and competition. Almost 500 years ago the East India Company was founded and the result of that total cluster F*** is that we realized certain things simply should NOT be outsourced – running a country, military, currency, etc – corporations are utterly utilitarian and as a result fail miserably at empathy and consideration – they are antithetical.

        However, and above all – the MAIN point here is that we as a city are facing compounding delays in our business and commute times for NO BENEFIT. Literally none.

        There are almost no time savings being made on this project for travel times. And the tiny fractions being added to car travel will easily evaporate BEFORE completion with the increase in traffic volume.

        In other words this is not a complaint about improvements in infrastructure in my back yard – it is a complaint about the process, why it is needed, who is doing it, the efficacy, and the cost benefit along with the opportunity costs.

        There are bigger ideas at stake than the lowest hanging fruit and common denominator (NUMBYISM) honestly try and address the conversation at hand instead of immediately derailing things with personal attacks – they can never be victorious and only serve to identify yourself as someone who can not debate logically.

        .

      • macrofishMEMBER

        They never flogged off the roads (Vicroads) or tracks (Victrack).

        If they dont remove the level crossing you will get to what you have on other lines with gates needing to stay down for 15 minutes at a time to handle the amount of trains needed.

        But hey you are inconvenienced for a little bit and thats all that matters right? Who cares about all the other crossing already being done or done.

        NIMBY

    • Ronin8317MEMBER

      For most other cpuntry, they would building an alternative route first before decommissioning the crossing. The reason for the rush is simple : it was an election promise, so planning or no planning, it has to start before the next election.

  10. Stephen Morris

    From this morning’s “Letters Fairfax Won’t Publish” file:

    19 March 2018

    Bravo Ross Gittins who – in a single article – has blasted to smithereens the rhetorical nonsense used to support “Big Australia”. By diverting scarce resources into capital widening instead of capital deepening, unsustainable population growth is undermining productivity and reducing the scope for growth in per capita income. In the process it is hurting the most vulnerable people in Australian society.

    Had space permitted Mr Gittins might have gone on to mention the psychological damage caused by urban densification, damage which falls outside measures of GDP.

    For example, evolutionary psychologists Satoshi Kanazawa of the London School of Economics and Norman Li of Singapore Management University Studies have shown that people who live in more densely populated areas tend to report less satisfaction with their life overall. The higher the population density of the immediate environment, the less happy they are. [1].

    Other studies suggest that growing up in a city doubles the chances of someone developing schizophrenia, and increases the risk for depression and anxiety.[2] City dwellers have a 20% higher chance of suffering anxiety and an almost 40% greater likelihood of developing depression.[3]

    Increased density aggravates all of these problems.

    Surely it is now time to have a mature conversation about Australia’s target population.

    Stephen Morris

    Notes:
    1. https://www.washingtonpost.com/news/wonk/wp/2016/03/18/why-smart-people-are-better-off-with-fewer-friends/?utm_term=.e9d10e1edf2b

    2. https://academic.oup.com/schizophreniabulletin/article/42/6/1372/2399413/Why-Are-Children-in-Urban-Neighborhoods-at

    3. https://theconversation.com/green-for-wellbeing-science-tells-us-how-to-design-urban-spaces-that-heal-us-82437

  11. Of course Joe Hildebrand is going to be pro mass migration. He only sold his Stanmore house in Sydney’s inner west a couple of weeks ago for a nice big profit and above his reserve price LMAO

  12. adelaide_economistMEMBER

    Any ‘average’ Australian looking to be represented by mainstream journalists must surely be realising by now that it’s not happening. Sure, Gittins (as an example) has suddenly sniffed the breeze and feels empowered to return to his original position… no doubt helped by his near retirement.

    However when you notice the real estate pages full of stories about journalists buying and selling multi million dollar properties you’ve just got to understand that they are co-opted by the system. When they smile and make light of astronomical house prices, swamped infrastructure and blowouts in debt, waiting times, congestion, you name it… they aren’t speaking from reason or enlightenment. They are speaking from either fear or self interest (or both where they overlap).

    The main indicator that things are cracking is the increasingly deranged and incoherent garbage being openly published in favour of the status quo. Whether it’s Peter Martin or Joe Hildenonymous, they are suddenly posting stuff that the work experience kids would be embarrassed to write. You have to think why.

  13. Explanation is pretty simple ……. Joe been sitting next to Jessica Rowe on that morning show for to long !
    Lovely lady I’m sure, but lives in a Disney movie where the world is just ‘simply fantastic and always beautiful’. Avoid those nasty, nasty facts of real life and the lived experience , and world will always be shining n sunny, oh my !