Stephen Koukoulas (aka ‘The Kouk’) is one of the few mainstream economists in Australia with enough integrity to admit that Australia’s immigration program is overcooked.
Back in April, The Kouk argued that “simple economics” says Australia should cut its immigration intake:
There are a number of vital areas of societal well-being which are being undermined by too much of a good thing, in other words, excessive population growth.
Importantly house prices, congestion in the cities and stretched infrastructure which is slow and expensive to add to, are all being impacted negatively by too many people for the existing facilities.
There is excess demand for a given level of supply, in other words. It is simple economics at play…
The cure is to trim the immigration levels until these other areas catch up and society and the economy can be more efficient…
The solution to most economic problems is usually straightforward. Several years of a lower immigration intake would allow the current dwelling construction surge to catch up to the shortfall in new dwellings and would see the current infrastructure spending surge in several of the main cities to continue.
In August, The Kouk slammed Australia’s ‘brain dead’ pro-mass immigration economists:
There are many instances where the dismal science of economics embarrasses itself with the way the economy and its parts are measured relative to the lived experience of the general population… [This] fits well with much of the current discussion on Australia’s population growth…
RBA Governor, Dr Phillip Lowe recently noted that high levels of immigration continue to give Australia a young and skilled workforce… This means that all we need to grow the economy is have lots of young, skilled and relatively rich people to migrate to Australia, year in and year out, and the bulk of our economic problems will be solved.
Unfortunately, this simplistic attitude is not that clear cut for reasons people reading this on the bus, stuck in traffic, will well understand…
Australia’s GDP enhancing high population growth is coming at a cost of things not well captured, if at all, in the GDP data or measures of individual well-being.
Missing are things like the time spent sitting in congested traffic in competition with other drivers trying to go to work to earn the money to service a massive mortgage that is needed because of strong demand for housing from hundreds of thousands of new immigrants pushing prices higher. These are the consequences of population growth outpacing the supply of houses, transport, other infrastructure and social services.
The unmeasured but still very real costs of a shortfall in funding for schools and health care facilities, that are stretched as more and more people compete to use those services relative to the ability of the government or private sector to ramp up supply of those services are other costs…
Suffice to say, there is a case at the moment for trimming the rate of population growth to allow for the infrastructure to catch up to the number of people living here. This might mean a scaling back in various components of the current level of immigration, excluding the humanitarian intake for what should be obvious reasons…
The Kouk also debunked the notion that Australia has a skills or labour shortage, which is used as justification for foreign labour:
Now, The Kouk has acknowledged that Australia’s heavy reliance on foreign workers is suppressing wages growth – a view backed-up by Melbourne University professorial research fellow Mark Wooden:
During a panel discussion this week, economist Stephen Koukoulas said it was clear that importing workers under the 457 visa scheme was “not letting the market solve the problem” of skills shortages by incentivising workers to retrain and re-skill.
“Immigration is like a good red wine,” he said. “If you have too much too quickly you’ve got a problem.”
Prof Wooden said the influx of students and backpackers alongside skilled visa holders made it often cheaper not to employ Australians.
“It’s difficult to see how migration can’t have some depressive wage effects,” he said.
The evidence of mass immigration’s wage-crushing effects is unambiguous, and has been well documented on this site (see here and here). So why do most Australian economists and commentators continue to ignore it?
The Kouk is as mainstream as you can get and a Labor Party insider. So his contributions represent a direct challenge to the Fake Left to engage in the immigration debate in a rational manner.
