There is such a thing as too much of a good thing, Sir Frank

By Leith van Onselen

Billionaire founder of Westfield Shopping Centres and key member of Australia’s ‘growth lobby’, Frank Lowy, used last night’s Lowy Institute speech to attack Australian’s growing unease towards mass immigration and to push his support for a ‘Big Australia’. From The SMH:

“I note that for the first time in the history of Lowy Institute polling, I am in the minority. In the 2018 [Lowy Institute] Poll, 54 per cent of Australians say the total number of migrants coming to Australia is too high.

“There is a rising crescendo of opinion from columnists and politicians saying we should reduce our immigration intake.

“And in the past year our immigration intake has declined. We have gone from migration targets to migration caps. I think we are moving in the wrong direction.”

I simply say to Sir Frank that it is possible to have too much of a good thing. Immigration is now the number one hot button issue in the country and for good reason. It is no longer a complement to the economy, people’s standards of living and society. It is a (the?) key driver of all three as we continue to drive huge inflows of temporary and permanent migration into a demand-depleted and over-supplied economy.

This is creating very obvious winners and losers that our ruthless political class are now vacuuming up on all sides, fracturing the multicultural consensus along the way. On the racist Right by attacking irrelevant but emotive symbols in specific minority groups. While on the Left, refusing to discuss the very real downsides of the mass influx of people, thus leaving the playing field open to the real racists.

The fact is, Australia’s mass immigration ‘Big Australia’ program has clearly outstripped the ability of the labour market to absorb a permanent supply shcock, as evidenced by the elevated labour underutilisation rate despite the one million “jobs boom”. Two-thirds of all new jobs have gone to migrants (see next chart). Wage theft is at epidemic proportions.

Infrastructure is at breaking point, evidenced by rising traffic congestion and overloaded public transportation, hospitals and schools. The outcome is a spiralling infrastructure deficit that will never be dealt with so long as 4,000 migrants a week continue to pile into Australia, concentrating in Sydney and Melbourne.

Then there is the concurrent housing crisis with no end in sight, adversely impacting low-income households the most, especially in our major migrant hotspots of Sydney and Melbourne.

Basically, residents of Australia’s major cities are being treated like electrons in a poorly played game of Sim City, watching tides of people flood in without the infrastructure and services to match. We’ve got 15 years of empirical evidence showing that the ‘Big Australia’ mass immigration experiment is too powerful for our institutions to cope. To build-out the infrastructure deficit, repair the housing market and stabilise wages will take root-and-branch reform of the Federation, the financial system and industrial relations. We can’t even keep a PM in place for a year.

Hence, the five most recent opinion polls all show overwhelming voter support for lower levels of immigration:

  • Australian Population Research Institute: 54% want lower immigration;
  • Newspoll: 56% want lower immigration;
  • Essential: 54% believe Australia’s population is growing too fast and 64% believe immigration is too high;
  • Lowy: 54% of people think the total number of migrants coming to Australia each year is too high; and
  • Newspoll: 74% of voters support the Turnbull government’s cut of more than 10% to the annual permanent migrant intake to 163,000 last financial year.

Stripped of political motivations and stuck with the lived experience of turbo-charged immigration levels, the pubic knows it will necessarily make housing affordability, congestion and infrastructure worse, dilute workers’ bargaining power, enrich the capital owners, and erode living standards even further.

Delivering those outcomes will jeopardise the very multicultural consensus that we all admire and that supported Sir Frank Lowy’s success.

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  1. Elitists love to talk in honeyed terms about the “end of borders”, but they don’t really intend to abolish borders. All they are really doing is replacing “national borders” (over which the mass of ordinary citizens might have had some control) with “private borders”: elite private property.

    The Elite do not intend to rub shoulders with the plebs. They retreat to their private mansions, their private country estates, their private campuses, their private gated communities, often policed by private security forces, and all surrounded by private borders marked with “KEEP OUT. Trespassers Will Be Prosecuted!” signs.

    The Elite do not intend to stand, crushed cheek-to-sweaty-cheek with the prols on inadequate and overcrowded public transport. They whizz from their private mansions to their private offices in private cars (often along private roads which have been tolled or “road-priced” out of the reach of the masses.)

    And from behind their private borders they peer out and sermonise piously on the supposed intolerance of those outside!

    On all fronts the trend is the same: the end of the 20th Century ideal of public rights – over which the citizens used to have some say – and their alienation to elite private interests.

    Behind all the honeyed words the real objective is restoration of the pre-modern feudal order.

    • adelaide_economist

      Private roads? The real elites travel by helicopter and have done for some time. I believe even Kerry Packer used that as his preferred transport. Not to mention elite pretenders like Bronwyn Bishop.

    • JK Rowling is a prime example of this – one of the ‘elites’ these days and politically ‘progressive’. Always chiming in with some virtue-signalling tripe, she is desperate for ‘us’ to be compassionate to asylum seekers and immigrants, however, she is never seen helping out at immigration processing centres or indeed hosting these people she claims to care so much about at her lavish and sweeping Scottish acreage. Nope, the people who live in social housing and generally in low socio-economic areas get the pleasure of hosting these people sh’e desperate to have. Ain’t life grand when you’re an elite!

    • From yesterday’s “Letters Fairfax Won’t Publish” file:

      12 September 2018

      Whatever one might think of the Mark Knight cartoon, Ms J K Rowling is in no position to complain about stereotyping physical characteristics.

      In the Harry Potter series she regularly goes for cheap laughs by stereotyping overweight children. Dudley Dursley and Vincent Crabbe are consistently depicted as being both dim-witted and malicious.

      Stephen Morris

      • harry smashes those preconceptions, being big-boned, (arguably) reasonably intelligent and a friend to all.

      • Not the impression I got from the books at all. Harry is a jerk who is popular because he is famous and a sports star.

    • Stephen, yours is a very good point.

      How many immigrants will Jean-Claude Juncker allow to live in his house?

      How many will Liz Allen allow to live on her front lawn?

  2. ‘Frank actually wants a more crowded divided miserable Australia with bigger debts especially foreign debt, total foreign ownership of all assets and all this for what???
    More money for the Lowys and their billionaire mates?
    I’ll bet nobody at the Lowy Institute called him on any of this!

  3. Racist Right? Come on this is ridiculous. I’m not a conservative and even I can see that this kind of labelling does no good for the debate, just creates more division. Especially considering as it’s mainly the ‘Right media that is giving you a platform more so than the ‘left’.

    Plenty of racists on the ‘left’ and in between too.

      • The costs of Diversity:

        1. Diversity of thinking adds value
        2. Ethnic diversity produces adverse outcomes in; productivity of teams, firms, and even whole countries*

        *The only exception to rule number #2 appears to be in is in regards to high-human-capital groups ie highly skilled, academic workforces…. which is probably why academics and professionals, living in their high skilled bubble are so aghast at the suggestion that ethnic diversity actually lowers social well being.

        This may seem strange to you. If you’re like me, you probably enjoy diversity. You probably don’t observe the problems of low morale and high marginal costs that researchers have found in ethnically diverse workplaces. If that’s the case then you, like me, live in a bubble…

  4. Frank’s made a fortune off the back of untrammelled immigration. He’s hardly going to start arguing against it now, is he?

    Gods, some of the fawning, vacuous comments on that article. Be still my heaving stomach.

    • Lol, love the final sentence. I shall use it. I usually say get me a bucket but your line more refined in the presence of billionaires….

  5. In part, Lowy is right. The post WW2 boom in migration has been a case of win win for Australia and the immigrants. But that win win was crafted in the context of an economy which the (mainly ALP, but it was taken up by Menzies) governments of the day had embarked on industry building, behind considerable economic (mainly tariff) protection.

    Most importantly the waves of post WW2 immigration were considerably smaller than the flood we have had since 2006 – and still nobody has ever had the decency to explain why immigration was ramped up then to set us on course for ‘big Australia’ whether we liked it or not.

    If Lowy or the either side of Australian politics want to recast their largely unspoken or ever acknowledged in the obverse policy of ‘Big Australia’ and state that it will be for developing industries which will be globally competitive, and with infrastructure which will support us all then lets hear it. But immigration in Australia is only ever really about weasel words such as ‘immigration should stay about where it is’ (without even caring to identify where it is) or claims of racism (sure it exists, but those claiming racism in Australia should take a look around the world).

    Let us have some clearly stated facts and policy positions on immigration. Both the ALP and the LNP have wedded us to the free trade industrial/manufacturing dismantling of the very sectors which actually underpinned and made possible the success of Australia’s post WW2 immigration wave. Their role as export facing or import competing drivers of employment hasnt been replaced leaving the nation reliant on spreading commodities wealth amongst the rest – and with those arguing for big Australia or higher levels of immigration arguing for more to have that commodities wealth spread between.

    Against that type of backdrop high levels of immigration is likely to be far more socially disruptive, and drive a far more sustained pushback.

    It isnt really a matter of skills, or we would have the education sector creating the skills. It isnt about geopolitics or the military because the days of need for large armies is gone, and it isnt about the vibrancy brought in when the additional volumes go mainly to Sydney and Melbourne and consume exponentially more farmland, water and resources. But at the same time there is no limit to what could be here if there was a clearly stated and framed policy about why we needed more people, what they would do when here, and how we would support those already here and the newcomers in terms of infrastructure.

    It is all about going back to square one and making the case honestly and openly – which seems to be something both sides of mainstream politics, big business, the immigration lobby, and most of Australia’s media seems to baulk at.

    • it will be for developing industries which will be globally competitive,

      The previous waves of immigration were for anything but developing industries which were globally competitive. In fact, they had precisely the opposite effect.

      The underlying problem of Australia has been allocative inefficiency on a continental scale. Those industries which really do enjoy a comparative advantage – agriculture, mining, energy, some tourism – are mainly in the regions. The mass of population is squeezed into the State and Territory capital cities, engaged in activities which for the most part enjoy no comparative advantage and need to be sbsidised one way or another by the industries which do.

      For example:

      a) at the State level, mineral royalties prop up Brisbane and Perth;

      b) top class health and education facilities concentrated in the capitals;

      c) arts and sports funding concentrated in the capitals;

      d) lucrative public works contracts are handed out to Mates in the capitals;

      e) at the federal level, tariff protection under the rule of the Victorian Liberal Establishment subsidised chronically uncompetitive manufacturing at the expense of exporting industries (and those industries ultimately collapsed anyway – what a waste!);

      f) company tax on commodity exporters is disbursed – largely per capita – to the capital cities;

      g) special imposts such as fuel excise act as a “tax on distance”, sucking money out of the regions (and even from the poorer outer suburbs which rely more on car transport) to be disbursed to the capitals;

      h) modern forms of specific industry protections inflate metropolitan incomes. The policy of mandatory superannuation (for example) is now diverting over $32 billion a year into the hands of Sydney and Melbourne funds managers and their support industries. But just because thousands of people are running around in circles complying with the red tape of a needlessly inefficient pensions system does not mean that they’re producing anything of value. It is properly accounted for as part of the deadweight loss of rent-seeking: a pointless mis-allocation of resources that exists only so that politically powerful rent-seekers can divert income into their pockets;

      i) the acceptance of oligopolies in major (metropolitan) industries further increases metropolitan incomes;

      j) the acceptance of – and even the creation of – private monopolies or near-monopolies in ports, airports, land transfers, stock exchanges, and many other industries does the same thing.

      Metropolitan rent-seeking and high population growth go hand-in-hand. There was no point putting up a tariff wall around Victoria’s hopelessly uncompetitive manufacturing industries if there was no-one to buy the over-priced goods they produced. There is no point creating a protected funds management industry in Sydney if there is no-one to use its shoddy expensive services.

      To turn industry protection into cold hard cash for the Mates, it is essential to keep bringing in millions of new customers who will be forced to buy their uncompetitive goods and services.

      High immigration, the protection of globally uncompetitive industries and allocative inefficiency on a continental scale all go hand-in-hand.

      And until there is a change in the system of government that makes rent-seeking less attractive than doing something useful, they always will.

      • The previous waves of immigration were for anything but developing industries which were globally competitive. In fact, they had precisely the opposite effect.

        I buy that, but that doesnt get us around the fact that the immigration ramp up of post WW2 was sold to Australians on that basis. It failed in the industry diversification sense when you see how easily the Hawke/Keating and Howard Governments jettisoned industries which they decided werent viable.

        Essentially as long as the newbies rocked up, had decent jobs to provide for themselves and their families, and everybody was being moderately civil to one another, immigration worked (at least once). The model failed when we could no longer provide the jobs, or the meaningful jobs, or the jobs to support families, because all we provide now is some form of uberisation in food delivery, aged care or whatever.

        The jobs dont have to be globally competitive for the rest of eternity, just long enough to get the immigrants over the hump of transplanting themselves and the locals beyond the ‘they are a burden on taxes’ mindset.

        But neither side of mainstream politics or the media can bring itself even to do that. What we get is the great unspoken ‘inevitability’ of a bigger Australia, and the equally unspoken why or who decided to ramp it up in 2006, and a spruikfest of mealy mouthed platitudes about vibrancy

      • I wonder if the real difference now is that the ratio of rent-producers to rent-seekers had tipped over to the point of collapse.

        In the post-war era Australia was still riding on the sheep’s back, and more generally on the back of industries which enjoyed a comparative advantage. There was enough wealth around to conduct an experiment in increasing population and seeing if new infant industries would thrive. They didn’t! They grew into chronically ill adults and were eventually left to die by removing their life support . . . a process which was actually started by Whitlam – a Sydney Prime Minister – in 1973 when he cut manufacturing tariffs across the board immediately upon gaining office.

        We no longer have the resources to engage in those sorts of experiments. Paul Keating famously said that Australia risked becoming a banana republic. To a large extent that has now happened . . . but the process was so gradual no-one noticed.

    • Thanks Gunna. Superbly said.
      To me, this is the stand out line:

      “Let us have some clearly stated facts and policy positions on immigration. Both the ALP and the LNP have wedded us to the free trade industrial/manufacturing dismantling of the very sectors which actually underpinned and made possible the success of Australia’s post WW2 immigration wave. Their role as export facing or import competing drivers of employment hasnt been replaced leaving the nation reliant on spreading commodities wealth amongst the rest – and with those arguing for big Australia or higher levels of immigration arguing for more to have that commodities wealth spread between.”

      As far as I can recall, there has not been a coherent policy from any political party on how we are going to replace our export facing and import replacing industries. Since the unwinding of tariffs under the Button plan, there’s been nothing but vague, hand waving motherhood statements about “transitioning to a services economy” or “creating an agile, innovative knowledge industry”. Load of bollocks.

      I’m in agreement with Ermington Plumbing on this one. Time to start screeching at branch party meetings of the party of your choice on this very subject

    • davidjwalshMEMBER

      agree with all of that Gunna but unfortunately you’ve missed out the unwillingness of vast sections of the population to even consider the possibility of “… It is all about going back to square one and making the case honestly and openly…”

      First and foremost, do you think people are willing to drop their homage at the alter of identity politics ?????

      Think about it – how many people do you know who would be prepared to seriously debate our so-called ‘refugee’ policy??? Any attempt to argue that the UN Convention on Refugees has had its day and should be replaced with national (or regional if you prefer) agreements designed to address specific, local issues is not even open for consideration ………….. and god help you if you question the logic of importing a few ‘refugees’ without addressing the issues that have generated the problem in the first place ……

      And given the general propensity for people to refuse to consider anything until it hits them personally ……. FFS, the refusal to understand the basics of the limitations of our water supplies makes, IMHO, an honest and open conversation impossible

  6. I can attest that this is very personal to Frank. He is an immigrant so are his siblings. His brother assisted them in coming to Australia and all of them consider Australia as having allowed them to LIVE. It gave them life at a time when the rest of the world declined them. From Frank’s emotive view point he and many fellow immigrants have been very successful and in doing so many have profited Australia immensely as well. This is more Frank the immigrant. Frank the boat person than Frank the tycoon. Whilst I might not agree with him on all points I fully understand his frame of reference and his sense of kinship compassion and view that he was them. Everyday he recalls his past – rich or not – it is something that will always be with him and inform his views. It informs the whole family. It is real to them and it is hard for anyone who has not had to experience anything like it to fully comprehend. Unfortunately, people will look past it and only see him as the “greedy tycoon” and not fully understand his true reasoning behind his views.

    • Well said, great post. We are all guilty of myopia. Great to see someone who bothered to look past that and see this from Sir Frank’s viewpoint.

    • Perhaps something that should inform him is that the Australia he migrated to was built up be previous generations. His generation has not given back as much to society, and the Australia today lacks much of the infrastructure to welcome more.

    • Hanei, I understand his viewpoint, but it’s wrong. It’s objectively wrong, and travelling down that path has, and will continue to leave current Australians, “native” and recent immgrants alike, worse off.

      If Frank is blinkered, that’s on him.

    • “His brother assisted them in coming to Australia and all of them consider Australia as having allowed them to LIVE. ”

      Seems a reach. He left Europe as refugee and moved to Israel, and it was from Israel he migrated to Australia. He was not part of a persecuted minority in Israel, and he even served in the Israeli Defense Forces. If everywhere allowed frank to ‘LIVE’ it was Israel, not Australia, not to discount the other opportunities he had by living in Australia.

      Certainly, his ‘boat person’ days were several years in the past when he made the decision to come to Australia.

    • If it were truly personal for Frank, then why isn’t he pushing for an increase to our HUMANITARIAN intake and not just pushing for a Big Australia? Please don’t tell us that he doesn’t understand the difference. It may be personal for Frank, sure, but it’s classic self interest.

  7. Why do they want a Big Australia?

    I don’t think I’ve seen anyone ask them why? What is the benefit to Australia? How does this help the country?

    The people that are anti immigration have plenty of good reasons to reduce the numbers coming in to the country i.e roads and public transport overloaded, not enough hospitals, schools, or even potentially drinking water – and it doesn’t get any more fundamental than water in a country that suffers from massive droughts.

    But the Big Australia people? nothing.

    I’d like to see them questioned more heavily about why they want this to justify their argument.

  8. Had to do a drop off this morning at Sydney International airport. OMG what a complete cluster f&$k. This crappy airport is a perfect example of Sydney being past the tipping point of functional capacity. Sydney will soon slide into the abyss of rapidly falling productivity driven by population growth.