Fake Left slams Coalition “open borders”

Lordy, at this rate I will have to drop my “Fake Left” moniker for just “left”. Via Bernard Keane at Crikey:

The charge that the Morrison government is playing up immigration reform to tap into xenophobia — plainly a far more toxic allegation now than it was before last Friday — is false. The collision of population, infrastructure, economic and property development policy that has caused such a mess in Sydney and Melbourne is real enough, whether the roads are full of “Asians with PhDs” as NSW Labor’s Michael Daley claimed, or seventh-generation Australians. But there’s a link between the issues that runs deeper.

As that raging leftie Judith Sloan pointed out today — neatly shredding the glowing coverage elsewhere in The Australian — the government’s fiddling at the margins of permanent migration numbers will do virtually nothing to affect the net overall level of immigration, especially when it has created entirely new classes of visas to allow more workers to come in. “The Coalition government is completely captured by the big Australian lobbyists (think big business, industry associations, universities and some community groups),” Sloan warned, “and won’t do a thing to reduce population growth.”

It’s not quite as blunt as Sloan — a born-again enemy of Big Australia — portrays. But as with its decades-old exploitation of racism and Islamophobia, and as with its enthusiastic support of large corporations, the Coalition has now discovered that a core part of its long-term agenda has turned politically toxic.

The Coalition has long implemented the demands of business to expand the immigration of workers, in order to keep downward pressure on wages and boost demand. The Howard government nearly doubled Australia’s permanent migration intake, particularly via the skilled migration visa intake (which not merely undercut wages, but reduced the need for Australian companies to invest in training), and more than doubled entrants under the 457 visa class, while selling itself as the party of border control.

And as part of its agenda to commercialise and defund a higher education already battered by the Hawke-Keating governments, the Howard government encouraged universities to rely ever more heavily on foreign students, who more than doubled in number over the life of that government. As a result, according to ABS data, in the four years to 2007, the net number of temporary visa holders entering NSW and Victoria almost doubled to over 100,000. Since then, both Labor and the Coalition have been happy to underfund higher education while universities trashed their academic rigour to attract and retain lucrative foreign students. From a negligible $2.5 billion at the turn of the century, higher education exports surged to more than $22 billion in 2017.

As with its support for deregulation and cutting taxes for corporations, the Coalition’s support for a virtual open border for workers and students was exemplary neoliberalism, which views borders as irrational obstacles to the free movement of business inputs and the free operation of markets (or, for corporations lucky enough to be able to do so, regulatory structures to be gamed to minimise costs and maximise profits). And when the Gillard government first broke with the open-door orthodoxy in 2013, Gillard was accused by Tony Abbott — of all people! — of demonising foreigners and dog-whistling (presumably Tony Abbott will now accuse Scott Morrison of the same? No?)

But this disdain for borders, a key marker of national identity, in favour of acknowledging only people’s economic identity (you have no value as a person, or an Australian, only as a worker) ended up backfiring on the neoliberal project (cf. Trump, Brexit) and feeding tribalism and ethnicity-based victimhood, contributing to the current surge in white supremacism and fascism. But the policy consequences were also damaging.

In Australia, the federal government left dealing with the consequences of its open-door policy to state and local governments: they were the ones that had to fund the extra housing, infrastructure and services needed by hundreds of thousands of extra workers and students; they were the ones that had to endure voter anger over congested roads and hospital waiting lists and crowded schools. And when those political structures proved not up to the challenge — NSW Labor and local councils in that state proved hopelessly corrupt — federal leaders did nothing to help clean up a mess of their own making. Some, like Tony Abbott, actively cheered on the growing unaffordability of housing in Sydney that had resulted from the Coalition’s open-door policies.

Now, belatedly, the party that massively increased migration and accused Julia Gillard of racism for restricting 457 visas wants to claim it has got the message. But Sloan is quite correct: as with its attempt to claim it is a government of moderation and love, rather than of race-baiting and Islamophobia, open borders for workers and students are such a core part of the Coalition’s political thinking it can’t see the world any other way.

Good job.

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. I wonder by exactly how much does mass immigration actually boost aggregate demand in the long run? Sure, more people consume more stuff and need more dogboxes to live in but if we are importing a lot of low-paid workers ripe for exploitation with the express purpose of maintaining permanent downward pressure on local labour costs (and therefore, local consumers spending power), by how much is the “increased demand” actually being offset and neutralised?

    The days when wage growth could be replaced by credit growth and everything turn out hunky-dory look to be over.

    WE have rampaging immigration levels and yet the only thing keeping the economy’s head above water is government spending.

    To succeed at permanently repressing workers renumeration levels in a country where domestic consumption is 60% of economic activity seems like a self-defeating approach to helping local businesses thrive. Maybe if your economy is geared toward exporting to richer countries, then having a vast pool of poverty-level production workers might succeed – but we are not that kind of economy.

    • It’s actually worse than self-defeating for two reasons:

      1. Many migrants send home remittances, so a dollar transferred from a local to a migrant results in less than a dollar to be spent locally.
      2. Even if they didn’t, spreading the same amount of money across a larger amount of people reduces discretionary spending, which is what businesses like Harvey Norman need to increase to ensure growth.

    • Mass immigration has failed. And when the economy really tanks (which it will), we will be left with a lot of low-skilled service workers with less and less opportunities in the service sector when all Australians spend less. We are left with a very crowded place, getting poorer and poorer. Was it really worth it?

    • I think the government did not factor in that all these new migrants, beyond being cheaper labor, weren’t the great consumers they thought they would be.

      They didn’t factor in remittances to India, China, and the Philippines. They didn’t factor in them doing things on the cheap and reducing their overheads by living in large households in relatively small spaces. They didn’t factor in migrants paying off visa agents and loan providers overseas. They didn’t factor in that any business bought here by migrants might be supplied with cash-in hand migrants. They didn’t factor that migrants have higher medical costs then locals on average. They didn’t factor in all the stragglers that have come in unofficially and using public resources. They didn’t factor in costly appeals borne by the taxpayer regarding asylum and visa rejections. They didn’t factor in the rates of fraud and corruption.

      They’ve proven to be a costly bunch, who on the whole are economic agents with little interest in the locals.

      • Funnily enough, I’m not seeking for the current vibrants to be deported, so we will still be well supplied with vibrant foods delivered via vibrant scooters and delivery vans.

      • The worst bit was we imparted only the worst Aussie attributes on them too, speculate on Real Estate and use negative gearing. So they helped push land prices up, rents and killed the housing market for FHB’s.. some benefit.

      • John Howards Bowling Coach

        The migrants are the exact same model as Baby Boomer rent seeker property investors and agents/developers. They have hit a rich vein of wealth transfer from the locals to the migrants via public subsidies. It seems that every public service these days is fully staffed with Indians, go visit a Medicare office for example. Coles has got into the act big time, most of the stores around me are fully Indian staffed and I live in an area with a low rate of Indian residents. So where do the young kids of today get a part time job? The trolley boy of the past is now a team of Indians as that have been outsourced and uberised

      • @johnhoward They tap into ‘diversity’ initiatives to get a foot in the door with government / university jobs (they get Medicare jobs because they can speak a couple of languages – who cares if their customer service skills are inadequate or if they have a love of unnecessary bureaucracy). Then they become hiring managers and hire their own, and if called out on it, say that Australians are rac1st to them, that they have to help each other out (pig’s bum!). Queensland Rail seems to have a large cohort from the subcont!nent – how does this happen?

        But no one wants to admit what is obvious, that they hire their own, that there is safety in numbers.

        You are right, where do Aussie kids get their first job? Supermarkets, retail and food outlets use to be where you cut your employment teeth – but what chance do you have if you can’t even get a job stacking shelves? And if they do go to further education, they are competing with those on graduate visas or older workers with supposedly more skills and at a cheaper rate.

        I hope the politician’s children are starting to suffer like the rest of us, then maybe the politicians will get it.

  2. It’s like, for some reason (well done MB), they have just realised that extreme population growth is actually extreme neoliberal economics destroying peoples lives, their amenity and the environment.

    • Well said. It may never be publicly acknowledged that MB led this debate but it’s an undeniable truth.

      Well done MB!

      • Sorry csfn

        It was not MB that led this debate, it was the highly intelligent contributors to MB that led the debate.

        The MB administrators were sufficiently in tune to witness the shift in the debate and to profit from it; more members.

        Kudos goes to the members and non members alike.

    • Amenity? What’s that? Is that some sort of Christian thing, is that a slur against our non-Christian brothers and sisters?

      • I do think they thought the outcome would be better, for the sheer size they have encouraged, they thought the results would be much better. But that’s what happens when you go for quantity over quality.

      • That’s not the case for the open border ideologues. For example Big Australia Liz et al clearly doesn’t understand their role in supporting the extreme neoliberal economics.

  3. Pretty good, apart from the nonsense about Islamophobia. I wonder who wrote it, and what they’ve done with Bernard Keane.

  4. captured by the big Australian lobbyists (think big business, industry associations, universities and some community groups)

    The “unis” are taxpayer-funded. It is like saying “my socks have captured me and are forcing me to buy new pants every month”.

    As for the states. How insane is it for Vic number plates to say “the education state”? Do the number plates not encourage even more foreign “students” to move to Vic?

    Why does Vic not have jail for wage theft to cut immigration into Vic?

    And if the “unis” can capture Gillard, why not get VicTrack to capture Shorten and force immigration to be cut?

  5. I am thinking of emigrating on an e3 visa and leaving lil old australia.

    Sick of cost of living. Lack of value

    • I actually wonder how anyone my age (GEN Y) is actually going to be able to retire in this country without going broke? I just can’t see it happening. This country sucks every dollar dry. Last night I took the dog to the vet for health check up and vaccinations. $650… I can absorb that, but with Sydney’s cost of living how many can?

      • Funny enough GG, I am actually coming around to the same conclusion. VETs are outrageously expensive and so is all the medication they give us for them.

        He had hot spots and was licking himself sore, drove me nuts lying in bed at night hearing him go at it like a scratch he could never quite itch to satisfaction.

      • Our Lab died Dec 2018 of cancer, which was horrific. We had RSPCA dog insurance. The death cost us $1600, and RSPCA weren’t going to pay, and even though the dog was dead, and we’d advised them, they were still billing us. It took a few weeks of the Vet getting on to them to sort it out. When we get another dog we’re going to put money monthly into an account to cover health. The policy was costing $1200 a year and full life insurance cost was around $19,000 . I overhead one of the calls my wife made to RSPCA and it was unbelievable how lacking in care they are.

      • Mystic MedusaMEMBER

        @Gavin, I am Gen X and am literally not factoring in retirement. Most Xers I know have the impression that the generation before us cancel whatever benefits and hand-outs the moment they’ve moved on. On another note, I have been helping my son look for a share house and it’s crazy out there. So many non-home houses, offering bunk beds in a room or someone who lives elsewhere rents out furnished rooms. It’s ridiculous. He just asked me why he needed a visa for Randwich. Says one of the “share houses” says he needs one.

      • Came home to distraught wife thought she saw golden retriever struck by brown . Off to vet to blood tests $200

        Same vet that bled $650 from us from another GT that had eaten a poison flower and died slowly from poisoning . 2 weeks later post on their FB page “these flowers are poison pull the plants out”.

        Robbers

        Agree on this country .

        Rang Suncorp yesterday to price Como farm
        Insurance – $1000 year cheaper than nrma. Robbers

        List goes on

      • Hi Gavin, nothing personal; just asking.

        Are you the same Gavin that was going to buy a house for $ 970,000 ??

        What sort of wages does one have to earn to be in that sort of property market ??

        Then there is compulsory superannuation. Have you worked out how much you will have when you retire at say age 60 ?? At least $1 +++ plus.

        Probably some inheritance before you retire and all of a sudden you are a multi multi millionaire.

        Somehow things don’t look so bleak.

      • @Shylock, yes I was looking at a $900k property, but I have a healthy deposit so I am not borrowing 90% of it. Which would be a big stretch even on my current income.

        I’ve looked at Super etc.. and at current trajectory I’d have about $1M for retirement, but if you factor in inflation and costs of living etc.. in another say 30+ years etc.. I don’t think I’ll be living it up. I’d be lucky to have an allowance of $45k p/year.

        That is of course if I continue in my current job/wage, but a career change could change all that. Especially if I run my own business etc..so it’s either stay on the Hamster wheel and be miserable or have a career change and suffer in retirement. Of course nobody knows what the future holds and how things will pan out (or even if I’ll get an inheritance etc..), but when you retire you’re better off selling up here and going overseas like a lot of folks i know have and living where it’s far cheaper in your old age.

        I’m just constantly shocked at how expensive things are in Sydney/Australia (cost of living wise) that I don’t know how those on lower pay than I are surviving without serious debt. In fact given our record levels of private debt I’d say that’s the only way they are surviving.

    • I work for a US tech company, but unfortunately the only place less affordable to live than Australia is the Bay Area.

  6. It’s time we had a government with the [email protected] to grow an economy beyond the service sector and digging stuff up. Be bold, we once had the smarts to be innovative and surprise the world. Then we got lazy and relied on mining, and then when that went bust, on building a service economy based on growing the cheap-labor and consumer base.

  7. Whilst embracing other ways of living (within reason), there still needs to be an overarching culture that unites all the people of a culture. This overarching culture can develop overtime, be it by the influence of new ways of living or by self-reflection and maturity, but it still needs to be there, in some shape or form. At the moment, it seems to be ‘conservative’ and ‘ignorant’ to want to maintain that overarching culture that brings us together, as if it is a bad thing, like colonialism, or is to Western orientated. We should be more like the Swiss, where there is still evidence of different ways of living, but at the end of the day, it’s the Swiss way or the high-way, like it or stay away.

  8. I’m not getting excited until Sally McManus catches up and stops destroying the labour movement by supporting mass immigration, undercutting wages and banning debate.

    Those at the ACTU using the union movement as a platform for their own agenda of identity politics and hobby horse for post-modernist/feminist theory need to be shown the door. The question remains: is there an Aussie tradesman left in those parts who knows what a door looks like? Or do we need a 457 visa holder to show them?

    • It’s all about growing the membership base for the union officials, because they can justify their obscenely large salaries and benefits. Union managers and executives know they are on a very good wicket, and don’t even have to work in the interest of their members.

      • I was in the AWU for a year for a job, and happy to be because the workplace reps were really good, but Caesar’s missives always rubbed me the wrong way.

    • There is something weird about Sally. Minus zero emotion and cog dissonance by the bucket load. She should take up poker.

  9. I have given up on australia.
    No community here anymore. Just another number and being Australian born means nothing anymore anyway.
    E3 visa? I can get a euro passport if I want as well.
    Feel for my son growing up in n nee australia in the burbs. Hence my desire to get out

  10. Tassie TomMEMBER

    That explains it really well. I don’t suppose the author would mind a bit of cut & paste?

  11. Just to respond to the 2 fellows above, Jade. No it’s not the same everywhere and it’s not about diversity it’s about MASS diversity. My wife and I moved to the US just over a year ago. Got E3s and that was easy. They are under subscribed and infinite rollover (so stay till it’s over in Au is our plan).
    The houses are one tenth the cost, cars and petrol a half, utilities a third, food a fifth, internet 10 times faster and cheaper, great roads, great homes, nicer people, heaps to see and do.
    Just stay out of the sh1tholes of LA and NY it’s brilliant.
    We lived in Sydney, life became miserable one day at a time, traffic, costs, people being angry over nothing, time lost waiting, reduced choices and government from Idiocracy.
    I don’t worry about stadiums, or tolls increasing, getting pulled over by angry cops, planning a simple trip to the airport, getting the forms filled right, watching out that someone’s not trying to rip me off, or my dog getting sick anymore or hundreds of little things that seemed so hard once.
    We have friends from all walks and cultures here, diversity is all around us but I can choose when I interact, that’s not being the R word. I’m the son of European migrants, I know the journey. At the same time it’s balance, too much of anything is bad for you.
    Sorry if this is a bit of a lecture, don’t mean it to be. Wish I had someone tell me this year’s ago.

    Also personally, I have lost 10kgs, significantly reduced blood pressure and am feeling happy…. Because it’s easy to do when you have the time.
    Cheers and never be worried to try something new.