The AFR’s Economics editor, John Kehoe, has broken rank and penned an op-ed attacking Australian policy makers’ extreme reliance on mass immigration to drive growth.
Specifically, Kehoe argues that Australia’s productivity growth collapsed as immigration ran hot, worsening living standards for incumbent residents:
- “For too long the federal and state governments have relied on the cheap, easy way to grow the economy by simply importing more people”.
- “Now economists at the Reserve Bank of Australia, Treasury and elsewhere are putting more emphasis on “per capita” economic growth and incomes. This is a positive development”.
- While immigration ran hot pre-COVID, “in per capita, or per person terms, growth and incomes were barely growing”, with “real growth in per capita GDP and incomes over the last decade… the slowest in 60 years”.
- Most people don’t support a ‘Big Australia’ due to “crowded roads and public transport, or struggling to afford to buy a home”.
- Productivity stagnated while immigration ran hot. “That’s a worry because productivity is the only sustainable way to increase people’s real wages and living standards”.
- “Liberal and Labor strategists are keeping a watchful eye on voter attitudes towards immigration… more reason to get the migration program right and to boost productivity to improve people’s living standards”.
Kehoe is right to focus on productivity growth, which collapsed under 15 years of extreme immigration:
Australia’s labour productivity has collapsed since 2005.
Getting “the migration program right” necessarily involves returning the intake back to pre-2005 levels:
Australia’s immigration intake accelerated after 2005, coinciding with the collapse in labour productivity.
15 years of extreme immigration delivered Australians the following:
- Collapsing wage growth
- Stagnating real household disposable income
- Collapsing productivity
- Stagnating growth in real GDP per capita
- Rising congestion, smaller and more expensive housing and reduced liveability across Sydney and Melbourne due to extreme population growth
- Soaring infrastructure costs due to diseconomies of scale plus waste as governments desperately tried to keep pace with unforeseen extreme growth
Surely this is all the empirical evidence needed to know that running a mass immigration policy was self-defeating and why it should not be rebooted.
