Perrottet: “Adding more people isn’t a sustainable economic strategy”

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Yesterday, I reported on the NSW Government’s dastardly plan to double Australia’s pre-COVID immigration intake to more than 400,000 people a year, which would “see the population swell by 2 million by 2026”:

Mr Perrottet on Monday said the borders need to be opened up amid a “general labour” shortage to ensure a healthy economic recovery.

“If we lose this opportunity, those skilled migrants will go to other countries,” he said. “We won’t get those engineers, those accountants, they’ll commit to other projects”…

I won’t go into the reasons why this plan is reckless, since I mentioned these yesterday.

Instead, I’ll simply relay Dominic Perrottet’s own arguments against “extraordinarily high rates of immigration” from when he was NSW Treasurer.

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First, here’s an extract from an Op-Ed written by Perrottet published in The Australian in November 2018:

Merely adding more people isn’t a sustainable economic strategy…

More important, we can’t pretend that high immigration comes without a cost, and we believe growth should not impose an unfair burden on those already here.

Excessively rapid growth puts downward pressure on wages and upward pressure on housing ­prices, both of which have sorely stung workers and aspiring homeowners in Sydney and other parts of NSW for a decade.

It also means more people on trains, more cars, more students in our schools and more patients at hospitals. And it’s the NSW government, not the federal government, that is responsible for providing the necessary support for the surging population.

When you look at the numbers, it’s no surprise communities in Sydney are feeling the pressure…

In 2006, annual net overseas migration to Australia increased to roughly double its average pace across the preceding 25 years…

Even if the NSW population stayed at today’s level, it would take time to complete the work so that our communities could be more liveable, our commute times more manageable, and our schools and hospitals more capable of offering exceptional care rather than just coping.

Instead, extraordinarily high rates of immigration risk pushing those outcomes beyond our grasp. And it’s a problem state governments are powerless to solve on their own because we have no say in the national immigration rate.

Second, here is a Radio 2GB interview from 2018 whereby Perrottet described mass immigration as “lazy economics”:

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“We don’t have a seat at the table when it comes to the rate of immigration into the country and there’s no doubt a lot of that immigration comes to Sydney”

“Whilst the federal government gets the benefit of the income tax, it is the state government that has to foot the bill for the infrastructure associated with that intake.”

“Simply because the Treasury bureaucrats might tell you that putting more people, economic growth continues to drive, that is lazy economics. What is more substantive is actually getting productivity reforms across a whole range of areas. But at the same time, what we are asking for here is a breather on immigration, to have a seat at the table and make sure that NSW as we grow, we grow well”.

Finally, here’s Perrottet complaining in 2019 that states like NSW wear the costs of immigration:

“We continue to not get our fair share of infrastructure investment,” NSW Treasurer Dominic Perrottet said.

“Victoria and NSW have the lowest rate of commonwealth infrastructure investment on a per capita basis. The federal government get all the benefits of immigration but we get all the costs.”

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Maybe Dominic Perrottet should follow his own advice instead of pursuing lazy and destructive mass immigration-led growth.

If NSW Labor leader Chris Minns had any sense, he would run hard on a lower immigration platform.

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.