Australia’s open borders visa system puts “cart before horse”

The Canberra Times’ Crispin Hull has once again expertly demolished Australia’s open borders visa system, declaring that it is putting the “cart before the horse” and imposing a “self-inflicted wound of high population growth”:

Governments in Australia have never “focused on growing our population for its own sake”. In the immediate post-war early years of immigration we increased population for security reasons. “Populate or perish” was the mantra.

By about 1980 Australia’s population had a pleasant cultural mix and the economies of scale were such that we had probably reached peak benefit and we really did not any deliberate immigration program.

By then, however, the big businesses that profited most from high immigration, especially those who made windfalls by rezoning land, did not want it stopped. Indeed they wanted it increased and the then Prime Minister John Howard, in the thrall of his big-business benefactors, turned on the tap, and in effect lost control of Australia’s borders.

And now, as this week’s conference and an earlier meeting of planning ministers revealed, politicians and big business will continue to put the cart before the horse. “We must spend more on infrastructure to deal with the congestion and pressure caused by population growth,” they squeal.

What about the more obvious plea: “We must reduce population growth so we do not have to desperately scramble to keep up with infrastructure demands?”

We know why: the profits and power of the donors to the major parties coupled with a fear that anyone who wants to reduce immigration will be branded a racist.

But if that high population growth is the given, several things will flow. First is overall lower living standards. The mantra of Australia having had the longest period of continuous economic growth in history and therefore we are better off is bunkum. The headline figure is misleading propaganda peddled by governments.

The real test for economic well-being is GDP per person (per capital GDP). If you account for Australia’s astonishingly high population growth, we have been in recession for the past year with falling per-capita GDP compounded by growing inequality.

If you take further account for the reduction in quality of life with congestion and environmental damage the reduction in living standards is even worse.

Too right. Adding nearly a Canberra-worth of people to Australia every year – with 90,000 to 110,000 people projected for Sydney and Melbourne alone – requires an impossible amount of investment just to keep up.

This explains why Australia’s infrastructure backlog has fallen so badly behind over the past 15 years, and why infrastructure deficits will continue to grow, and environmental damage will worsen, under the tri-partisan mass immigration ‘Big Australia’ policy, in turn destroying residents’ living standards.

The reality is that the volume of infrastructure investment necessary for a ‘Big Australia’ is mind boggling and impossible to meet, given Australia is projected to add a projected 17.5 million people over the next half century, with Sydney and Melbourne projected to double in size:

Meanwhile, Australia’s material living standards are falling fast, with per capita GDP growth crashing into the abyss:

And Australia underperforming all major economies and regions this decade, according to the OECD:

Australian households have also experienced a seven year recession in real per capita household disposable income (HDI), which has fallen by 0.5% over the past seven years:

And to add insult to injury, Australia’s real per capita HDI growth was the lowest among OECD nations over the five years to 2019:

Unfortunately, the “self-inflicted wound of high population growth” will continue at the behest of the ‘growth lobby’, which needs Australia’s visa system to remain wide open in order to expand its customer base and profits, as well as to lower its wage costs.

For its part, the useful idiots on the left will also continue to oppose lowering immigration because it is supposedly ‘racist’ and ‘xenophobic’ to do so.

Stuck in the middle are ordinary Australians, whose living standards have been thrown under the bus to enrich the wealthy elite and make the virtue signallers on the left feel morally superior.

Unconventional Economist

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith is an economist and has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.

Latest posts by Unconventional Economist (see all)

Comments are hidden for Membership Subscribers only.