Peter McDonald’s immigration propaganda sweeps Domainfax

By Leith van Onselen

It didn’t take long for Professor Peter McDonald’s immigration propaganda to infect the mainstream media, with Fairfax’s David Crowe publishing his ‘research’ as if it was fact. From The SMH:

A severe cut to migration would deprive the country of up to 6.8 million workers by 2050 while scaling back economic growth, highlighting the danger of a steep decline in the intake.

Australia’s economic output would be 12 per cent higher in 2053 in per capita terms with an annual intake of 180,000 migrants compared to a halt to the program…

The findings are a reminder of the value of the migration program…

His latest conclusions confirm that annual net overseas migration of about 200,000 a year would help address the ageing of the population, and lead to about 20.5 per cent of Australians being over the age of 65 by 2051.

The percentage of the population over 65 would rise from 15 per cent today to almost 27 per cent in 2051 if the door was closed on migrants, putting a greater burden on the rest of society to fund pensions and services for those who have retired…

While businessman Dick Smith has called for an intake of 70,000 a year, Professor McDonald said this would not be enough to cover the humanitarian and family intake… “Skilled migration would have to be negative”.

I already comprehensively destroyed Peter McDonald’s flimsy analysis on Friday, so I won’t bother to repeat my critique here. All I will say is that Peter McDonald also co-authored a parliamentary research paper in 1999 which concluded that it is “demographic nonsense to believe that immigration can help to keep our population young”, claimed that “levels of annual net migration above 80 000 become increasingly ineffective and inefficient in the retardation of ageing”, while also recommending “a population of 24-25 million within 50 years”. 

The Productivity Commission, through various reports, has also comprehensively debunked Peter McDonald’s claimed ageing benefits from immigration.

Peter McDonald also claims that Australia cannot reduce immigration numbers because future generations will have to pay. Yet, Blind Freddy can see that our current generation cannot afford to pay for the infrastructure required to support the current immigration numbers, hence the worsening congestion and crush-loading across our cities.

Peter McDonald’s final claim that cutting Australia’s immigration intake would be difficult is also misleading:

The “family” migrant stream (currently 47,000) could easily be sliced by several thousand by merely following through with the Productivity Commission’s (PC) recommendations and tightening parental visas. These migrants add pressure to an already strained system and do not work, pay taxes, or contribute in any meaningful way to the economy. According to the PC:

The contributory visa charge of just under $50 000 meets only a fraction of the fiscal costs for the annual intake of roughly 7200 contributory parents. And an additional 1500 parents make a minimal contribution. Overall, the cumulated lifetime fiscal costs (in net present value terms) of a parent visa holder in 2015-16 is estimated to be between $335 000 and $410 000 per adult, which ultimately must be met by the Australian community. On this basis, the net liability to the Australian community of providing assistance to these 8700 parents over their lifetime ranges between $2.6 and $3.2 billion in present value terms. Given that there is a new inflow each year, the accumulated taxpayer liabilities become very large over time. This is a high cost for a relatively small group.

Ultimately, every dollar spent on one social program must require either additional taxes or forgone government expenditure in other areas. It seems unlikely that parent visas meet the usual standards of proven need, in contrast to areas such as mental health, homelessness or, in the context of immigration, the support of immigrants through the humanitarian stream, and foreign aid.

Given the balance of the costs and benefits, the case for retaining parent visas in their current form is weak.

Nobody should migrate to Australia with the expectation that they can bring their elderly parents along for the ride at taxpayers’ expense.

This brings me to Australia’s so-called “skilled” migrant intake. At the turn-of-the-century, the skilled intake was 35,000. Today it is 111,000 following the Coalition’s latest cuts.

We already know that the common claim by the business lobby that Australia is suffering from “skills shortages” is utterly false. We also know that Australia’s skilled migrant program has been widely rorted, attracting migrants to areas already heavily oversupplied with workers (e.g. accounting, engineering and IT), with most of these migrants employed at levels well below their claimed skills set, and ‘skilled’ migrants generally having significantly higher unemployment and underemployment than the Australian born population:

The heavy weighting towards ‘skilled’ migrants also means that Australia’s immigration system is built around robbing developing nations of their skilled human resources, thus stifling their economic development.

Therefore, the ‘skilled’ program should be phased back to 35,000 over, say, three years and be reserved only for truly world-class leaders in their field that Australia cannot foster internally. Moreover, these highly skilled migrants should have an income pay floor set at the 80th to 90th percentile of earnings.

No longer should employers simply be able to ‘grab a migrant’ to fill ordinary positions in the labour market cheaply. Instead, they would have to lift wages to attract workers (thus countering anaemic wages growth), as well as commit to training local workers.

Let’s also not forget that many migrants come to Australia on temporary visas with the hope of transitioning to a ‘skilled’ permanent visa.

Therefore, if Australia was to remove the carrot of permanent residency by slashing the ‘skilled’ intake, it would also reduce the flow of temporary migrants, since the two areas are intrinsically linked.

The flow of temporary migrants would also be stemmed by raising the appallingly low pay floor on ‘skilled’ temporary workers from $53,900 (non-indexed) to, say, the full-time average salary of $84,682 (which includes unskilled workers).

By maintaining such a low pay floor for temporary ‘skilled’ foreign workers, the government has ensured the system has been overused and abused by employers, thereby undermining the pay and working conditions of local workers. This needs to stop.

Finally, Australia’s “humanitarian” migrant intake is already fairly low and has not budged much since the turn-of-the-century (see above chart). It should remain at the current level.

In summary, by merely cutting parental visas by at least 5,000, and culling the skilled migrant intake by 76,000, Australia could easily reduce the permanent migrant intake back to around 100,000, which includes maintaining a generous humanitarian intake and the same ‘skilled’ intake that existed at the turn-of-the-century. If we want to go even further, we could tighten the rorted spousal visas.

In any event, Australians should be given a say about Australia’s future population size via a plebiscite at the upcoming federal election, the answers of which would then be used to formulate Australia’s immigration intake to meet the said target.

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Unconventional Economist
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  1. It’s not surprising that McDonald’s argument has been taken up by DomainFax – it’s exactly what they want to hear, especially in these difficult times for RE. Logical explanations of how lower migration policy could be implemented would be even more unwelcome than they were during the good times right now.

    • I personally don’t think Domainfax care so much about prices of properties; but like all big business they do benefit from a bigger population size. Population growth benefits them just as much as it does Woolies or the big banks; more readers to advertise to and more people buying advertisements. It’s volume not price that earns them their money.

    • See the UK for an experimental results.already after Brexit wages rise.economy grows with dropping immigration levels…

  2. Going by the reader comments in the abovementioned Domain article, people aren’t falling for it. Good to see.

  3. How McDonald managed to become a “demographer” with a degree in commerce is a mystery. But this is one very interesting dude, as are the times that propelled him to be the Big Australia demographer with a lack of an open record concerning his funding relationships.

    My suspicions were raised by how difficult it is to tie down the source of his funding. This is not usually that hard for researchers. A swag of cash was suddenly injected into an outbreak of “research” on “demography” that just happens to be fully supportive of mass immigration as the floodgates were opened and the concrete started to be poured into the dog-box formwork in 2006/07.

    The main event was this document funded by Scanlon where he (McDonald) was the cheer leader for Big Australia. That seems to be the moment that McDonald got his snout into the funding when he was at ANU.

    This is where it began and where the action is today. What you have to realise is that when you are the head of a department you effectively pull in funding for others. So it seems no coincidence that Dr Liz Allen got her start at ANU in a strange relationship where she is a social researcher who did a PhD in demography when not actually being in the demography department. In fact, her PhD has nothing to do with demography and cannot be found online. I smell a rat, but that rat got a job in demography at Melbourne University.

    This first Scanlon-Funded document was an interesting milestone for the Big Australia lobby. They ran conferences and were also deeply embedded in the workings of the Productivity Commission (PC). I remember this well as one of Australia’s most eminent reproductive scientists was trying to get a spot on their gig warning of the perils of population growth that he’d highlighted with UNESCO in other countries. He was essentially de-platformed and it became well known that a coup was being worked on and that policy decisions had effectively already been made. One of his concerns was the perils of having a young immigrant population. Conflict could be pretty much predicted in other nations by the same young demographic and high birth rate. Another issue was was ecological footprint, but no-one wanted to hear.

    You have to see the context, CSIRO ecology had been given the bullet. Universities were now dependent upon mass immigration to fund themselves. The leading ‘global warming’ R&D was eventually shut down by Abbott and co. In reality ecologists have not been invited to “demography” conferences funded by developers for 2 decades. There are no ecologists left in any government institutions who are charged to look at these issues in any serious and objective way. They were also defunded and re-structured. The public sector now lines up behind government policy and rolls over. People like McDonald now have the ability to run with their one-sided agenda from a university as the neoliberal university funding system has allowed them to flourish.

    In the 2011 Productivity Commission document they even got an economist to speak for environmental issues. Even though this might have seemed “safe” if is interesting to read the first and last words of his paper:

    In 2011 Harry Clarke wrote:

    “…business groups, and particularly the housing industry, clamour for higher migration to boost demand and to grow the economy….

    Refreshingly honest, but so too were his parting comments:

    “…there are a host of social arguments on the immigration issue that have been ignored here, mainly because they are beyond my competence. Even if the environment is comprehensively priced, there are plausible non-economic reasons for restricting population growth.

    These would not be discussed. Of course McDonald was there with his ANU hat on pushing for mass immigration as a labour market strategy:

    It was here that the the ‘Asian and Australasia Society of Labour Economics’ got it’s start at ANU. It is always informative to look at who sponsors societies of this type and I was genuinely surprised to see the following (below) – a virtual gaggle of federal agencies, the ANU and the ABS with its name up in lights. It is here that another well known mass immigration loon now known as Prof Raja Junk-Economics got his foot in the door:

    Previously I’ve never seen so many federal agencies sponsoring a conference – and one that seems heavily tilted towards mass migration in this case. They were even sponsored by the Centre for Research Analysis of Migration – a UK based organisation.
    This society seems to have emerged from ANU at the Research school of Economics in 2017 but is once more silent on its original sponsorship:

    Hence it appears that ANU has made a run on the business of “policy development” with its local clients being Canberra-based bureaucrats – and the links run deep. No doubt this is an academic money spinner that seems to have developed a co-dependence on government departments. No wonder that McDonald became Turnbull’s favoured “demographer”.

    Overall, it seem to me that the Big Australia push largely began at ANU, was championed by Peter McDonald and involved a strategy document produced buy Scanlon funding and worked hand in hand with the Productivity Commission agenda that was the way to bypass democracy and consultation with the Australian people. McDonald’s funding arrangements are opaque, but there is no doubt that Scanlon funded his hobby horse early on. A lot more digging has to be done to tie down the relationship between Scanlon, McDonald, Allen, Willox and Markus. Clearly they provided the justifications that a government, both ALP and LNP, wanted to hear – and still does. The entire process was corrupt as it resulted in a very significant public policy decided by an elite. It is well worth digging into the grubby exchange of funding and putting ANU under the microscope. I’d love to know how the ABC decided that Dr Liz Allen was one of Australia’s more notable researchers in demography. Coincidence? I’d also like to know how McDonald, Willox and Allen end up as the 3 talking heads on the 4 Corners program on Big Australia. Another coincidence?

    If you scratch the surface of McDonald’s stuff and look at the myriad of contradictions (e.g. he went from arguing against the ageing population myth of mass immigration to supporting it) there is something that does not smell right at all. This is not independent science nor has it been tested properly in the academic community as “demography” has been captured by vested interests as McDonald is the poster child for the corruption of the university system. There is a link between Allen-McDonald and Willox and a murky connection to Scanlon and the interests of developers.

    Something stinks more than the average banker’s crotch. This stuff is rancid. Shame that we have no investigative journalists left in Australia.

    • Fabulous work mate, my hat is off to you. If only we could get the ABC dudes on 4 Corners to…oh wait…

      The corruption runs deep in this one.

    • How McDonald managed to become a “demographer” with a degree in commerce is a mystery.

      Yes – a degree in commerce or economics should disqualify you from being able to call yourself a demographer due to the obvious conflict of interest. It should also pretty much prevent anyone taking anything you say seriously ever again.

    • Hats off to you Clive. You are doing a great service to the nation with this research. Please keep it up.

    • excellent summary Clive ….. anyone who has had exposure to academic politics and the incestuous character of Canberra ‘policy development’ knows that you have hit the nail on the head …..

      thanks for posting your work …

    • Interesting read. It is still important to hold the individuals involved in the fraud to open scrutiny. Big Australia Liz is really frustrating to watch, it’s pure spin – never talks about the environment or amenity, never attempts to address arguments that debunk the economics. How can you be an academic from one our best universities and essentially be a salesman. Her last hitout with Dick Smith had her saying ‘we will just have to agree to disagree’. No attempt at evidence based arguments, no attempt at data or proof to support her vacuous spin.

  4. Like elites throughout history, the post-modern Elite weave a cloak of virtue to conceal the nakedness of their self-interest.

    Like elites throughout history, the post-modern Elite cultivate a caste of “theologians” whose role in society is to craft eloquent arguments justifying the power, privilege, prestige and policies of their patrons.

    In times past such theology might have been couched in terms of the “Will of God”.

    Nowadays it is couched in the modern religious vocabulary of “growth” and “efficiency”.

    It is still theology.

    • Yep, Bishop McDonald wraps himself in the robes of a “Demographer” (whatever the hell that is if Liz Allen is one as well) and depends upon donations from his congregation of developers and self interested explorers of waves of humanity. He’s temple is the new university system that invites the money changes and cashed up carpetbaggers to run the joint. In turn, he provides them with absolution and blesses them with his mumbo jumbo – telling them that they are good people doing god’s work. As for the rest of the masses being exploited they are evil and know not the mind of demography gods. Hold your nose if the great unwashed pass by.

      Well stuff you Peter McDonald, you are a naked emperor – it’s easy to show up your work as a pile of crap held up as nuggets of gold by rent seekers who are destroying our society and nation.

      Yesterday Leith did a total demolition job on this fake but once more he crawls out from his university rock confident that no journalist has the smarts to take him on – as they are owned by his principle patrons, the media organisations that sell real estate bubbles and mass immigration.