In the wake of last night’s token announced cut to immigration by Prime Minister Scott Morrison, the HIA has spat the dummy:
“The economic growth over the past decade has been built on the back of strong growth in skilled migration.
“This population growth has led to a boom in residential building. “The building and construction industry now employs one in ten workers in and supplies at least one in five of every dollar of revenue to the states.
“A dramatic change in migration intake can create economic shocks to industries, including the building industry.
“It is prudent for governments to maintain a stable, well-rounded migration intake as part of an overall population policy. HIA advocates for a high level of skilled migration as part of this intake.
“Population growth in Australia has been slowing since early 2017… “Tighter Visa requirements and punitive taxation regimes imposed on foreign investors last year are continuing to shift migration and investment away from Australia, toward our major trading partners.
“Governments should be cautious of thinking that migration and investment can be switched on and off.
“A stable migration and population growth policy assists in achieving sustainable economic growth,” concluded Mr Reardon.
Does this look like slowing immigration:
I think not.
It’s hardly surprising that property industry rent-seekers like the HIA support mass immigration. They do, after all, get to privatise the benefits from growing their customer base, revenues and profits, while the broader community and taxpayers pick up the costs and have their living standards eroded.
Besides, the world has 7.4 billion people. Australia doesn’t need to import them to sell to them.
Sure, lower immigration will 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:
Whereas household income growth has also been in decline:
Lower immigration would 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:
The truth is mass immigration promotes a particular type of growth, concentrated in urbanisation and household debt, and associated sectors benefit. This has its limits, as we are already seeing in debt stress everywhere, as it benefits the few (like the HIA) over the many.
But it’s not the only 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 meritocractic, and send the 40% of the economy that is tradable into overdrive.
