RBA immigration propaganda goes nuclear

By Leith van Onselen

RBA boffin Professor Ian Harper once again spruiked the riches that supposedly come from Australia’s mass immigration ‘Big Australia’ policy at yesterday’s Melbourne Institute/The Australian Economic and Social Outlook Conference:

Speaking at the Melbourne Institute/The Australian Economic and Social Outlook Conference, Mr Harper said raising productivity, with a key focus on making cities accessible and liveable, was how to achieve the “holy grail” of economic policy of both growth and equity.

“Migration of course is right at front and centre here. We benefit an enormous amount from migration,” he said…

“It’s no longer the case…that Australia is a great quarry and farm,” Mr Harper said.

“The bulk of Australia’s growth is being driven by services….in our great cities,” he said, noting that 80 per cent of economic output is produced by cities.

“What drives productivity growth…is innovation,” Mr Harper said. “The source of this creativity…is when we are together. When we stimulate each other. The more diverse we are…the more creative we are,” he said.

“These are the debates that are presently live for us.”

“Importantly, in my view, we need to make our cities work. What matters for us is how we manage the accessibility and the liveability of our cities,” he said.

As I noted last week, this is daft closed economy thinking by Harper. The world has 7.4 billion people. We don’t need to import them to sell to them.

Sure, cutting immigration would lower aggregate economic growth, since less inputs in people means less outputs in GDP. So what? It’s not like Australia’s growth in GDP per capita would be effected, which has collapsed since the immigration floodgates were thrown open:

Lowering immigration would also reduce one of the major drags on productivity: rising infrastructure bottlenecks and congestion; would lower the Australian dollar (other things equal), rebalancing the economy away from ponzi growth towards productive tradeable growth; it would help to lift wages; and would improve Australia’s current account, since Australia would import far less and the nation’s mineral wealth (and exports) would be shared among less people:

On the last point – the current account – notice below how “our great cities” of Sydney an Melbourne have driven gigantic trade deficits?

Basically, all the extra migrants that have flooded into these two cities have barely lifted exports, since these cities don’t actually produce much that is tradeable. By contrast, imports have skyrocketed via more purchases of consumer goods like flat screen TVs, cars, furniture, etc. These net imports must be paid for, either by increasing the nation’s debt or via selling-off the nation’s assets. We’ve been doing both.

The truth is mass immigration promotes ‘dumb’ growth, concentrated in urbanisation and household debt, and associated sectors benefit (think Highrise Harry and Gerry Harvey). This has its limits, as we are already seeing in debt stress everywhere and declining liveability, as it benefits the few over the many.

But it’s not the preferred model of growth. Far from it. Productivity enhancement and competitiveness are a better model over the long run as they lower debt while boosting incomes per capita, are more meritocratic, and will send the 40% of the economy that is tradeable into overdrive.

Once immigration is cut there’ll be an adjustment period while the real exchange rate tumbles. But the Australian economy will be far better off in the medium and long term, as will living standards.

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Comments

  1. “What drives productivity growth…is innovation,” Mr Harper said.

    lol. R&D makes up a tiny percent of the Aussie economy. Perhaps the worst in the OECD. Nothing gets invented here.

    Quieter jet engines and better batteries get invented in Europe and USA.

      • truthisfashionable

        Narrabeen looks likea great location for a new coal power plant too… Then we would have a real answer on if innovative new clean coal exists or is just mineral council propaganda.

    • What’s even funnier is that our actual R&D is much lower than stated. The data is compiled including R&D tax incentive data, which in practice has a very very low threshold for what is ‘R&D’ and includes lots of extra costs.

    • The largest employer in this joint is the Govt.
      From Gittins “They bang on about the nation’s poor rate of productivity improvement while forgetting they themselves possess considerable scope to raise the efficiency of two of the economy’s biggest and fastest growing industries,
      the two spending areas that dominate combined federal and state budgets and that will, unless made more efficient, do most keep budgets in crisis for decades to come: education and health.”

      WW so the current fast easiest way to lift productivity in the govt services industries is to grasp AI and robotics, cos productivity is going through the floor as the result of distractions and the inability to focus or concentrate in the current and next gen of employees.
      Immigrants wont fix that?

    • This quote is such a load of rubbish. How does one equate diversity with creativity. Absolute nonsense, neomarxist brainwashing. Orwellian crap – “Diversity is our strength”.

      • I saw this quote somewhere a while ago, and noted it down. Might’ve been Tucker Carlson writing about a previous episode of his show.

        Our topic was “diversity is our strength,” a phrase our leaders use to end conversation rather than spur it. You hear it all the time. We asked, what exactly does it mean? Is it true?

        Here are the words from our segment: “How precisely is diversity our strength? Can you think of other institutions, such as marriage or military units, in which the less people have in common, the more cohesive they are?”

        “Do you get along better with your neighbors and coworkers if you can’t understand each other, or share no common values?

        That is 100% correct.

        Imagine a team of a dozen people facing a task. They are 100% diverse. Everyone is of a different race and speaks a different language. They are all different religions. There are males and females and all of the varieties in between. All flavours of sexual preference are included. Etc etc.

        Now compare that team, to any sort of homogeneous group of your choosing. A dozen straight white men, a dozen black lesbian women…whatever. Other things such as qualifications for the task being equal, which team is more likely to succeed?

        The phrase “Diversity is our strength” is false nonsense, and must be mocked and countered wherever it appears.

  2. ““The source of this creativity…is when we are together. When we stimulate each other. The more diverse we are…the more creative we are,”

    I don’t see how this argument has any relevance in modern times. Pre-internet? Sure. But we are all so closely connected digitally that I don’t see any need for actual physical closeness to intellectually stimulate people.

    • It has no valid basis whatsoever. Did Leonardo da Vinci need thousands of immigrants to “stimulate” him to be creative? Did Nikola Tesla need millions of Indians, Chinese, etc. to come and make his village their new home to stimulate him into innovation? It’s scary and extremely damaging to the economic prosperity and welfare of Australians that people with weird brainwashed minds such as Ian Harper’s are in positions such as his.

    • So many counter examples to this “bigger = more innovative” trope e.g. Oxford, UK (population 150,000), Amsterdam (pop 2.5 million), Frankfurt (2.3 million), Berlin (pop 3.7 million), Tel Aviv (3.4 million), Silicon Valley (3.5 million) , Cambridge, Massachusetts (population 100,000), Vienna (1.7 million), Zurich (1.3m).

      Compare with, say Nairobi, Dhaka, Chongqing, Delhi.

    • Group tasks are harder achieved when there is too much diversity of thought. Consensus is needed and is difficult to achieve when there are too many differing opinions. Ever heard of too many cooks?

    • You don’t think of the Chinese or Indians when you think of innovation. So why would importing so many of them naturally translate into ‘innovation’ in Australia? Anyone heard of ‘hive mind’ mentality?

  3. Wino ShinyfaceMEMBER

    the man isn’t a professor for nuthin, he is right about innovation in Australia it is booming!! for example: swapping all the Australian truck and courier drivers in Sydney for Indians on student hair dressing visas and paying them nothing
    how about brothels – booming
    illegal beauty clinics in unit blocks – booming
    people delivering food on bikes – booming

    all high skill, high tech stuff

    • The elites are scared but so they should be.
      I just got onto a train at Town Hall station and the insanity of the crowding experienced by every user of this station every day means you can’t spin your way out like they are trying to.

      That they think they can win support through propaganda illustrates how inept and out of touch they are.

    • It might sadly end up in bloodshed. But it doesn’t have to end this way if the politicians actually listened to the people. And I’m sick of the sniggering and cries of ‘populist’ when it’s suggested Australia should maintain a certain level of amenity and livability.

  4. “The source of this creativity…is when we are together. When we stimulate each other. The more diverse we are…the more creative we are………………what preposterous bullshit. Anybody would think Australians never invented anything before we became a culturally diverse country. I cant begin to say what a load crap this is. So the only way we can have innovation is if we are all packed together. And this wont cause any stress or psychological issues from overcrowding, congestion, unaffordable houses or enviromental degradation. Au contraire. We will all be rich, just by being more closely squashed together. Apparently according to Harper’s theory, Japan has never invented anything and has no creativity to speak of because they are so culturally undiverse. The proponents of the failed Big Australia policy are becoming increasingly desperate, I just hope people can see through their barrage of nonsense.

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