With mass unemployment looming, immigration must be slashed

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A group of “40 leading Australian experts on public policy” have penned an open letter urging the Morrison Government to provide welfare to the 2.3 million temporary migrants in Australia:

The minister has acknowledged the crucial role that these temporary visa holders play in the Australian economy…

For example, his statement points out that international students “are an important contributor to our tertiary sector and economy, supporting 240,000 Australian jobs.”

Many of those on working holiday visas are working in “the critical sectors of heath, aged and disability care, agriculture and food processing, and childcare”.

Temporary skilled visa holders “were provided the visa to fill a skills shortage – a shortage that may still be present when the crisis has passed”…

Refusing income support to temporary migrants who lose their jobs poses risks to public health and their own welfare, will create shortages of workers in vital sectors now and when the economy restarts, and breach Australia’s global responsibilities.

These workers have all been making valuable contributions to the Australian economy.

Many will not be able to, and should not have to, return “home”…

We believe that as a matter of urgency that entitlement to the JobSeeker Payment and the Coronavirus Supplement should be extended to these workers for the period of the current health emergency.

While I accept that temporary emergency financial assistance should be extended to temporary visa holders facing homelessness and/or illness, and whom cannot return home due to travel restrictions, the suggestion that the economy is facing pressing “skills shortages” that require huge volumes of temporary visa holders is ridiculous.

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Even before the coronavirus outbreak, Australia was experiencing vast labour market slack, with zero real income growth recorded over seven years:

Alongside chronically high underemployment and labour underutilisation:

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One of the reasons for this persistent labour market slack is the huge volumes of temporary and permanent migrants continually pouring into Australia.

With Australia now facing mass unemployment, alongside falling incomes, the absolute last thing workers need is for so many temporary migrants to remain in Australia competing with locals for scarce jobs. This will not only keep unemployment and underemployment high, but also place additional downward pressure on wages.

In short, a significant chunk of temporary migrants must now return home to help balance labour supply with demand.

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The same applies for the permanent migrant intake, which has set aside 108,000 places for so-called ‘skilled’ workers:

With skills shortages virtually non existent across the economy, and mass unemployment looming, there is zero rationale in maintaining such a strong permanent migrant program.

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Once the coronavirus crisis has passed, and international travel bans are lifted, the Morrison Government must send large numbers of “temporary” visa holders back to their home countries, as well as halve the permanent migrant intake.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.