Immigration decline is no ageing disaster

Abul Rizvi, former Deputy Secretary of the Department of Immigration and one of the architects of Australia’s faux ‘skilled’ migration program, continues to shill for a ‘Big Australia’, this time arguing that the nation faces an ageing population and a decline in the birth rate if restrictions on overseas migration are not eased:

A slump in immigration will supercharge population ageing and see more declines in fertility, leading to long-run economic growth falling by about a third, an expert has warned. Abul Rizvi, a former senior official in the Immigration Department, estimates net overseas migration (NOM) will fall from more than 230,000 — over the 12 months to last September — to about 175,000 a year on average over the next decade, even after international borders are reopened.

“The NOM was already slowing down even before the coronavirus and these trends will continue,” he said, pointing to falling offshore student visas and fewer skilled temporary entrants and permanent visas being issued by the government. A lower NOM contributes to lower births because immigrants are much younger than 45, on average”…

Mr Rizvi said the working-age-to-population ratio was falling and would sap growth… “We could be on the verge of the biggest percentage and ­absolute decline in our population since 1788, more than during the Great Depression or even when we sent troops to the Somme,” Mr Rizvi said.

Let’s get a few things straight.

First, a key driver of Australia’s current ‘baby boomer bulge’ and ageing population is the mass immigration program ran in the post-war period (i.e. 1950s and 1960s):

These migrants (which include my parents) have now grown old, thus adding to Australia’s current ageing ‘problem’. Therefore, importing more migrants to solve ageing is the equivalent of ‘can-kick economics’, because today’s migrants will also grow old, thus creating further ageing problems in 40 year’s time. Some will also bring in older family members.

Second, Rizvi has ignored the increasing labour force participation by older Australians:

Indeed, since the mid-2000s, the labour force participation rate of over-65s has more than doubled. There is obviously further scope for increases in participation given older Australians are remaining healthier for longer, as well as the legislated lift in Australia’s pension eligibility age to 67 by 2023.

Third, Rizvi always ignores the costs of his beloved mass immigration ‘Big Australia’ policy.

The 17.5 million extra people projected by the ABS to arrive in Australia over the next 48 years – driven entirely by net overseas migration (both directly as they arrive by plane and indirectly as migrants have children) – will all require huge sums of public spending on economic and social infrastructure, such as schools, hospitals, roads, public transport, aged care, etc.

These costs can obviously be avoided by not running a mass immigration program in the first place.

Fourth, arguing that immigration is needed to boost fertility rates ignores the likely depressing effect on incumbent Australian fertility of lower wages, alongside raising the cost of housing. Both factors are likely delaying or preventing native household formation.

Finally, the ABS’ own demographic projections show that immigration is next to useless in ‘younging’ Australia’s population. That is, if we apply a more realistic definition for the working aged population of 19 to 70 (given more kids are staying in school and older Australians are working longer), then running annual net overseas migration (NOM) of 200,000 to 280,000 delivers only 3% more working-aged Australians by 2101 than zero NOM:

This tiny ‘benefit’ will only be transitory and comes at the expense of adding 150% to 200% more people to Australia’s population versus zero NOM:

Such a massive increase in population will obviously take a massive toll on Australia’s natural environment and general liveability.

Sure a bigger population enriches some people like property developers disproportionately, but it comes with great, largely hidden public costs, such as congestion of public infrastructure and facilities paid for by existing residents. That is, the benefits of immigration are often privatised and the costs are often socialised.

Indeed, the mass immigration program has lost public support because it has been so badly managed over the last 15 years.

Detailed counter-arguments to Abul Rizvi’s spruik are articulated in the research paper Three Economic Myths about Ageing: Participation, Immigration and Infrastructure, which was authored by Dr Cameron Murray and I and commissioned by Sustainable Australia.

It’s time to put the ageing economic myth to bed once and for all.

Unconventional Economist
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