KPMG demands 350,000 strong immigration deluge

2022 has only just begun and already the vested interests are demanding a massive lift in Australia’s migrant intake.

The latest special pleading comes from KPMG, which has demanded net overseas migration (NOM) be lifted to a record high 350,000 people a year this decade to make up for the ‘lost’ immigration over the COVID pandemic:

Ramping up net migration levels to 350,000 a year to make up for the collapse in overseas arrivals during the pandemic would boost the economy by an extra $120bn and raise GDP by 4.4 per cent by the end of the decade, exclusive KPMG analysis reveals.

As business groups demand for the annual cap on permanent skilled migration to be lifted from 160,000 people to 200,000, KPMG chief economist Brendan Rynne argued the nation would be better served by adopting a more aggressive approach to attracting migrants over the 2020s.

Dr Rynne said net overseas ­migration added 10 per cent to the size of the population over the decade to 2019, and that the federal government should be targeting a similar contribution over the 10 years to 2029.

If Australia wanted to match the same 10 per cent growth in population through international migration, then net overseas ­migration would need to total about 2.56 million between 2020 and 2029…

The KPMG analysis shows Australia would need to increase its net migration levels by about 50 per cent versus the Population Statement forecasts in order to match the decade to 2019.

Dr Rynne recognised that substantially ramping up net migration levels to 350,000 people a year from now until 2029 seemed like “a lot”, but he argued that a Bigger Australia approach was ultimately in the national interest…

“I am absolutely a supporter of increasing migration to Australia and at levels above what is in the Population Statement to ensure not only that we get the economic benefits, (but also) the social and cultural benefits you get from opening your borders and allowing a truly multicultural society,” Dr Rynne said.

The only key economic variable negatively correlated with higher migration levels was real – or after inflation – wages.

Dr Rynne said the “first order” impact of higher population growth was to increase the supply of workers, “which is a moderating factor on wages”…

The 2010s was the worst decade for Australian per capita GDP growth in 60 years of data, even excluding the impacts of the 2019-20 COVID recession:

It is a similar story for real per capita household disposable income (HDI), with the 2010s recording the weakest decade of growth in data dating back to the 1960s:

The next chart plots the same data in decade average terms and shows just how poor real per capita HDI growth was over the 2010s:

Given “net overseas ­migration added 10 per cent to the size of the population over the decade to 2019”, and this resulted in such poor outcomes, it makes no sense repeating the same policy again, especially given the many downsides not captured in the headline data (e.g. worsening congestion, having to live in smaller and more expensive housing, and environmental degradation).

Meanwhile, the Grattan Institute’s Brendan Coates has repeated the canard that boosting immigration will ‘save’ the budget:

“Migrants, especially skilled migrants, boost Australian GDP per person.

“Yet migrants, who have tended to be higher skilled capture much of the increase in GDP themselves via their incomes. The big benefit from migration, especially skilled migration, is the fiscal dividend they generate for the Australian community because they pay more in taxes than they receive in public services and benefits over their lifetimes.”

Dr Coates cited recent Treasury analysis that showed that the average permanent migrant provided a fiscal dividend of $41,000 over their lifetime since they paid more in tax than they received in publicly funded services.

Treasury’s model used to calculate fiscal impacts from migration deliberately ignores costs imposed on state budgets from providing the many goods and services required to sustain bigger populations (e.g. infrastructure, education and social services), as well as the additional ‘private taxes’ (eg user-pays tolls paid to private companies) imposed on the general public:

The OLGA [OverLapping Generations model of the Australian economy] and FIONA [Fiscal Impact of New Australians] results presented in this report do not capture the broader economic, social or environmental effects of migration such as technology spillovers or congestion. The FIONA results presented here do not capture the fiscal impacts of migration on state or local governments.

Thus, the Treasury never takes proper account of the costs of big migration – either financial or non-financial – since these are borne primarily by the states and residents at large.

This explains why Treasury’s Intergenerational Report banged on incessantly about the rise in healthcare and pension costs from population ageing, but completely ignored the gigantic cost of infrastructure required to house an additional projected 13.1 million people over the next 40 years – the equivalent of adding another Sydney, Melbourne and Brisbane to Australia’s existing population. These infrastructure costs are borne by the state governments and residents (via user charges), so are dismissed altogether by Treasury.

I bet if the federal government was required to internalise the cost of immigration by paying the states $100,000 per permanent migrant that settles in their jurisdiction, so that the states can adequately fund the extra infrastructure and services required, then Treasury would no longer tout the ‘fiscal benefits’ of immigration.

Making the federal government share the benefits and costs of immigration would be a surefire way of reducing the intake back to sensible and sustainable levels.

Besides, most Australians do not want a return to pre-COVID levels of immigration, as evidenced by recent opinion polls.

Australians recognise that the mass immigration program of 2005 to 2020 was managed appallingly and crush loaded everything in sight, resulting in widespread infrastructure bottlenecks across Australia’s major cities and reduced liveability.

Sadly, the shills at KPMG shamelessly represent vested interests in the business lobby rather than the Australian people.

Unconventional Economist
Latest posts by Unconventional Economist (see all)

Comments

  1. So what does Dr Smithy and his Green buddies think of this cry for ramping up immigration? Is such an immigration policy good for Australia Dr Smithy ? Can that Jenny Leong muppet please educate me.
    If so, why? Would it be a negative for the population size to just stay the same or actually decrease?

    • If you actually bothered to read anything I wrote, you’d know that in the decade I’ve been commenting here, I have advocated lower and more targeted immigration due to the negative consequences of high-volume, low-skill immigration.

      • Totes BeWokeMEMBER

        Yet, are still prepared to vote for and promote an open borders globalist environmental party.

        You are full of sht.

        • bolstroodMEMBER

          If you are ging to cast a valid vote at the next election, you will have chose how you place the 3 largest parties, LIb, Lab, Green.
          All 3 are mass immigration boosters, as you well no old Totes.
          The immigration sameness of all 3 means other policies will have to be taken into consideration.
          For mine Climate Catastrophe, a Federal ICAC with big teeth, Housing affordability, will guide my vote.

          • Good point. To which I would add: nuclear submarines (Greens want the deal axed; no-one should vote for them on this issue alone) and Stage 3 tax cuts.

          • Totes BeWokeMEMBER

            Leaving the three treacherous parties last is the start of fixing Australia.

            Fail to do that, and nothing else matters.

        • Again, as I have discussed (and recommended to others) countless times in the last decade, my primary vote where possible goes to SAP or a similarly-minded independent.

          • kierans777MEMBER

            Same here. I considered joining SAP, however there were a few elections where I watched how they performed and I was very disappointed.

    • All the immigration boosters have to do is say the immigrant will be anything other than White.

      That will appease Green voters.

      Next.

  2. Is that the same KPMG that has been found to fraudulently pass its audit exams for a number of years?
    And the same KPMG that no-one has found any wrong doing except USA regulators? OZ regulators & affiliations didn’t see anything! Remarkable!
    And the same KPMG who sacked a partner who dared to question a report re NSW Transport Assets (?) prepared by another KPMG Partner!
    These consultants are FAB😂

  3. ErmingtonPlumbingMEMBER

    350,000/year sounds a little low.
    500,000 is probably more sensible if we want to see 3 million dollar average capital city house prices before the end of the decade.

    • boomengineeringMEMBER

      You’re definitely turning Into your father, posting at 1.19am and getting up in a few hrs.

    • Muttafukaburrasaurus.MEMBER

      At the very least they should be publicly graded in regards to the honesty, accuracy and value of their advice.
      And limited / excluded from government contracts when their work is graded poorly.

  4. Totes BeWokeMEMBER

    Donors pay LNP and Labor to increase immigration.

    LNP and Labor employ consultants KPMG to recommend immigration as great for Australia.

    The poor voter watches and wonders “how did that happen?”

    Wipe out LNP and Labor.

  5. reusachtigeMEMBER

    Youse are fighting a loosing battle! The punters might not like it but they mostly just don’t care in the end. Too many more important issues to worry about like getting a new jet ski this summer. Have you seen the beauties out there at the moment?

  6. Know IdeaMEMBER

    KPMG? Talking its own book would be my guess. Or just a bit of advance positioning for the next tender process of those lovely and lucrative government contracts?

    If it was advocating for an outcome that was unlikely to be in its financial interest it may present more credibly.

    • It’s corporate virtue signalling to a very specific audience. Those contracts don’t just award themselves you know.

  7. TailorTrashMEMBER

    Having a break in a little enclave on the south
    coast . This is Australia 1960 revisited .

    Everyone is Anglo but now just a tad over fed .
    The houses are mostly fibro still ,freshly painted
    and with nice manicured lawns ( as they should be
    as their asking prices nudge a million )
    Kangaroos hop along the streets and across the lawns
    There are plenty of shiny new chromed up tradie
    utes parked on the nature strips
    This is the Australia of foreigners dreams .

    But among all the apparent wealth one kind of gets the feeling this could be like that Edwardian long sunlit afternoon or the [email protected] happy days of the interwar years in Berlin . The happy innocent years before death destruction and displacement upended everything

    One hopes this innocent tranquility can prevail,
    but it might not . The inhabitants and affluent visitors to this little paradise might then have some regrets about their complacency and naivety

    • Having a break in a little enclave on the south
      coast . This is Australia 1960 revisited .

      Everyone is Anglo but now just a tad over fed .
      The houses are mostly fibro still ,freshly painted
      and with nice manicured lawns ( as they should be
      as their asking prices nudge a million )
      Kangaroos hop along the streets and across the lawns
      There are plenty of shiny new chromed up tradie
      utes parked on the nature strips
      This is the Australia of foreigners dreams .

      And the Australia the Boomers are scorching the earth to keep it for themselves.
      The shiny paint, the manicured lawns, all paid for excess property gains and cheap labour.
      Meanwhile those that pay for it….

      The Gen Y’s with $750,000 mortgages they will never pay off and the inadequate immigrant class fed a false racism grievance who will become bitter and hostile.

      “But among all the apparent wealth one kind of gets the feeling this could be like that Edwardian long sunlit afternoon or the [email protected] happy days of the interwar years in Berlin . The happy innocent years before death destruction and displacement upended everything.

      Kaiser Wilhelm II died in 1941….. he didn’t really get to see it.
      Same principle here.

      One hopes this innocent tranquility can prevail,

      but it might not . The inhabitants and affluent visitors to this little paradise might then have some regrets about their complacency and naivety

      No, as has always happened, the affluent then move on to somewhere else, leaving the scorched earth behind.

      • More boomer nonsense. Most are just ordinary people with little wealth beyond a modest house, which has only become very valuable due to perverted government policies and simply represents inflation in the cost of a basic necessity of life. Even the most sociopathic boomers could do very little harm if they were not being enabled by the politicians, most of whom are not boomers. Younger voters outnumber the boomers by more than 2 to 1, and most of them in every age group, ever those 18-24, are voting for a major party (see Fig. 4.4)

        https://australianelectionstudy.org/wp-content/uploads/The-2019-Australian-Federal-Election-Results-from-the-Australian-Election-Study.pdf

        These younger voters have the power to stop mass migration, house price inflation, environmental vandalism, and every other short-sighted, misguided policy that our elite can dream up. Remember that the donors can give the neoliberal politicians money, but they can’t force you to vote for them. Wise up and put them last!

        • IMHO this is not about Boomers vs others, it’s about RE owners vs non RE owners
          Try talking to a young couple before and after they buy a house.
          The before couple is horrified by the price of Aussie houses, the after couple is excited by the $100K windfall gain (on paper) that they achieved through their smart investing. Truth is this is just the story that they have to tell themselves so that they can wakeup each day (and get to sleep each night) without being worried sick by the $1M mortgage that’s hanging over their necks.
          The newly minted RE owner is the last person in the world to want affordable housing, in this respect honesty becomes a luxury they simply can’t afford.

          • Why would anyone be worried sick about a mortgage?

            Let’s compare the pair:

            Renter and homeowner (with mortgage). Both live in Sydney. Both lose their job.

            The renter, having lost his job and therefore his ability to pay rent, has the eviction process started after two weeks of missed rent. A few weeks after that he and his family are on the street.

            The home owner, having lost his job and therefore his ability to pay the mortgage, calls his bank and gets a 3 month pause/extension/whatever on payments. If he’s still not employed at the end of that period, he may be able to get another 3 or even 6 months leeway (thanks CCP virus) before the bank looks to start any recovery process. Worst case, bank sells his house and he walks away with whatever is left over after the mortgage is paid out.

            It’s even easier if both keep their job, because whether it’s rent or a mortgage, you have to pay for the roof over your head. The difference is rent will go up over time while the amount you owe on a mortgage will reduce.

  8. Totes BeWokeMEMBER

    If state Labor parties hadn’t made themselves so unelectable, we wouldn’t have this problem.

    Qld and WA should lead the way and say NO MIGRANTS. ZERO.

    Can’t imagine them doing it. Imagine extreme woke Vic Dan Andrews? lol.

    Labor, state and federal are allowing LNP, KPMG etal to run riot. Add unions to that too. Without asking fee paying members.

    Woke has destroyed Australia’s future.

    When it comes to immigration, wipe out woke and everyone that stands for it.

  9. they AIN’T coming. Next China will shut down the last 3 grafting zones, Taiwan, Singapore and Malaysia. No more ferang dough.

  10. kiwikarynMEMBER

    Their sweat shop must be running low on migrant slaves. All of these outfits are seriously conflicted and compromised.
    PwC denies operating ‘white-collar sweatshop’ in western Sydney
    https://www.afr.com/companies/professional-services/pwc-targeted-unambitious-migrant-staff-for-grunt-work-whistleblower-20220103-p59lio
    A whistleblower from global auditing giant PwC has told a Senate inquiry into job security that the firm targeted “unambitious” migrant workers to work 80 to 120 hour weeks from an unbranded Sydney office.
    In an anonymised submission to the inquiry, “Worker X” said that in their time at the “Skills Hub”, where routine work for the firm’s 500-plus audit clients was completed, of the 82 accountants hired all were from non-English speaking and migrant backgrounds.
    Worker X claimed that PwC targeted staff it perceived as “unambitious” and “willing to do repetitive work for a long period of time” in its recruitment for the hub, offering lower salaries and less training than auditors in its main office.

  11. GDP just what the f#ck does it measure
    Per Capita GDP = who knows wft / Population
    Great metrics bro, not judging just saying

    Maybe it’s time for the Australian Treasury to move into the 21st century and at least begin to measure the right things. Top of my list is : Economic Complexity
    https://ourworldindata.org/how-and-why-econ-complexity
    It’s clear for all to see that our Population Ponzi is by and large decreasing our economic complexity.
    Even a cursory glance at the graph Economic Complexity vs GDP per Capita (above link) tells you that something is going very wrong with this experiment.
    For a real shock plot Australia’s Economic Complexity over time. Or better still just look where we are today, in completely the wrong corner of the graph, fighting for position with countries like Oman, Argentina and Kyrgyzsatan when we should be at the other end of the graph competing with the likes of Singapore, USA, Japan.
    Whereas our GDP per Capita still places us in the top 10% our Complexity analysis tells the true story of the dramatic decrease in the real world value of Australian labour…most of this outcome is the result of decades of population ponzi coupled with the resultant economic / workforce reshaping effects (invisible hand).
    If it is time for change then lets start by eliminating metrics which only serve to obscure the problem.

    • kiwikarynMEMBER

      Be like NZ. Replace GDP with “Wellbeing”. You get to measure how happy people are. Then take no responsibility for things like inflation, housing costs, or productivity.

    • Totes BeWokeMEMBER

      “Grow D Population (GDP)” totes trademark, for the benefit of big business and real estate industry.

      Demand Independents dump these grubs KPMG from government contracts.

    • GDP just what the f#ck does it measure
      Per Capita GDP = who knows wft / Population

      My thoughts exactly when I read it…

      “…by an extra $120bn and raise GDP by 4.4 per cent…”

      No, $120 billion will be the ‘income side of the ledger’, I doubt the externalities of this is netting this off.

      Also… increased GDP by 4.4 percent… It looks like population will increase by 8.1%….

      Umm… that’s not a good look..

      The ‘Economic complexity’ argument is now lost for at least a generation.

      To enhance this, you need to target sectors for extra tax during boom times, to help fund other sectors… either ones being squeezed out, such as car manufacturing at the time, or to incentivize new ones..

      Rudd lost… big time.

      • Small loss for Rudd (he never was that good to begin with)
        Huge loss for Australia, we were that great, we had a number of important end product industries along with the supplier infrastructure to support them. Today it’s gone…it’s completely gone, no engineers, no metal workers, no mechanics, no tool makers, no apprentices and most importantly no end products that were directly created by our labour skills base.
        And wtf do we have to show for this sacrifice? Higher GDP apparently along with much higher Population.
        In KPMG’s freshly minted MBA lingo that’d be called a win-win situation, truth is that all Aussies are big losers for listening to this rubbish and accepting these BS metrics.

        • ErmingtonPlumbingMEMBER

          100% correct.

          We are ruled by sellouts and traitors.

          We need leadership that can say “fk you” to the neoliberal “economic expert” lackeys of global capital.
          Like Indonesia has got,

          “JAKARTA – When the Susilo Bambang Yudhoyono government pushed through Indonesia’s 2009 Mining Law, industry skeptics warned that provisions in the legislation ending the export of raw minerals and ushering in a new era of value-added manufacturing would cost the country dearly.

          Now those same critics are having to eat their words. Led by the booming nickel industry, iron and steel exports this year are expected to top US$20.5 billion, double that of 2020 and one reason why the economy has stayed afloat through the Covid-19 pandemic.”

          https://asiatimes.com/2021/12/indonesias-value-added-mining-policy-paying-dividends/

          Skips link from the other day puts it succinctly why out Governments are so useless.

          “skippy
          January 2, 2022 at 7:08 am
          SyringeSyringe Dr Henry Madison
          @RageSheen
          A short thread on the magnitude of public maladministration in Australia in the past 50 years, driven by libertarian populists in more recent times and more general neoliberal ideas prior to that. And how Covid throws this disaster into stark relief. /1 #COVID19Aus #auspoll

          https://twitter.com/RageSheen/status/1476728904165441538

          Basically private debt replaced government investment and with it any public/democratic administration.”

          • If only the plebs in our major parties understood this! Beaten by the Indonesians they no doubt think they are better than. We have a massive opportunity right now to repeat this with rare earths

  12. Jevons ghostMEMBER

    This from
    https://www.niesr.ac.uk/people/rynne-b

    “Brendan has significant experience in advising public sector departments and agencies on a range of issues and activities, including econometric analysis, economy-wide modelling, cost benefit analysis, impact assessments, efficiency improvements and legislative/regulatory reform. Brendan also leads KPMG Australia’s Thought Leadership in the economics discipline, and has completed research in the areas of optimal tax reform, impact of trade protectionism, property market cycles, productivity and income inequality.”

    I rather like this bit…
    “Brendan has significant experience in advising public sector departments and agencies on a range of issues and activities….”

    I note that Brendan has worked in the private sector since 1994. So yes, I suppose that public sector departments and agencies are no longer really necessary when we have guys like Brendan around, a true “Leader in Thought Leadership™” to help our rather hapless (hopeless?) federal government find its way around the traps.

  13. Totes BeWokeMEMBER

    It’s not KPMGs fault.

    Government don’t ask for reports without knowing what they’re having delivered.

    Here’s how it works.

    1. Donors make LNP and Labor pro mass immigration.

    2. Government hire consultants to tell the government mass immigration is great.

  14. Are they all trying to bankrupt this country as fast as they can?

    Perhaps by the end of the decade?

    • Why not?

      They can move on, it’s hard to imagine there is any loyalty to the country.

      Remember, diversity is a weakness.

      • boomengineeringMEMBER

        Many years ago had a gym client who was to do an economics lecture on diversification. I leaned back on my chair and bellowed diversification is for cowards. He mentioned my comment in his lecture.
        Finger on the pulse is more important. The less pulses to measure the easier to keep track.

  15. “(but also) the social and cultural benefits you get from opening your borders and allowing a truly multicultural society,”
    Vomit!

    • Hehe, I didn’t read it all too the bottom, knowing it’d be some disingenuous, anti-heritage hate… however…

      The only key economic variable negatively correlated with higher migration levels was real – or after inflation – wages.

      The ONLY negative outcome…..

      Dr Rynne said the “first order” impact of higher population growth was to increase the supply of workers, “which is a moderating factor on wages”…

      Why do they need to be moderated?

      The “competitive wages” argument is the same is the mass migration into civilised countries argument,… it’s made by people who hate. and think a perpetual decline is better.

      When these KPMG types look at wage share, they automatically default to it being too high.. regardless of the nominal figure, it’s “as long as tomorrow is less that today, then that’s a good outcome”.

      There is no argument for sub 55% wage share, people need to have the ability to exert real demand in the economy. That’s what wages are for.

      Unions should be fighting an intellectual battle on the correct proportion of wage share, not a divisive 21st century fad of which toilet trannies can access…

  16. So the skilled migrants move here and supposedly contribute more than they take at a Federal level, but they don’t take into account what they cost at a state level, or the cost of them having kids in our hospitals, the cost of educating those kids, and the costs of having many of their parents living in Australia. Unbelievable. How do Treasury et al, get away with this? Surely The Australian should be pointing this out, rather than just running a pro-mass immigration piece. I would like to hear what Judith Sloan has to say about this.