Alan Kohler: Immigration “designed to suppress wages, crush unions”

Alan Kohler has dropped some truth bombs about Australia’s immigration system on the Buyers Buyers podcast (listen from about 18.30):

“The Coalition is more inclined to have high levels of immigration than the Labor Party for labour relation or industrial relations purposes.

“The Coalition doubled Australia’s immigration in 2006 from roughly 100,000 a year to 200,000 a year at the time and it was in my view largely an industrial strategy designed to suppress wages and to protect the project they had to crush unions. And it worked. Wages growth has been extremely sluggish ever since then and the unions have got virtually no power.

“So I think it was a very effective strategy to use immigration in that way.

“The Coalition has always been very strong on borders and refugees – ‘stop the boats’ and that kind of thing. And I think that was part of the design to disguise the high level of immigration.

“Obviously that all came to an end with the pandemic. Immigration stopped. And there’s now a reset to take place. And the question is, if the Coalition wins will they go back to high levels of immigration as before? I suspect not and I think the Labor Party definitely won’t.

“Because it’s now become conventional wisdom across the economic world is that the biggest problem for the Australian economy is slow wages growth.

“The high levels of immigration has contributed to the slow wages growth, which is now seen as the biggest problem.

“So, I think there’s going to be a lot of economic pressure from various quarters and the Reserve Bank on the Coalition and Labor Party not to go back to very, very high levels of immigration. So I think we’ll return to 100,000 to 150,000 a year people. Maybe 1% population growth rather than 1.5%”.

I sincerely hope Alan Kohler is right and immigration reboots at a lower level. But the Intergenerational Report and Budget projects 235,000 net overseas migration ad infinitum:

Australia's net overseas migration

Big Australia here we come!

Sadly, the Muppets at the Australian Treasury, big business, the property lobby, the edu-migration lobby, and various business-backed think tanks are all pushing hard for mass immigration. And the federal government always bends the knee to these parties, rather than representing the Australian public, which is firmly opposed to mass immigration.

Unconventional Economist

Comments

    • No way. Treasury have no excuse. They dont have to worry about winning elections. They should be fearless in their honesty that this is nothing but a PONZI.

      Treasury can GF.

      • “They dont have to worry about winning elections.” since Howard got in they do, Treasury has been politicised like every other gov dept and they’re there to do the gov’s biding. An impartial PS is looong gone.

        Edit: actually, in all honesty is was likely Hawke & Keating that kicked this ball off as they didn’t trust the PS.

      • I used to blame Treasury, APRA, RBA, etc, for everything. With more understanding I realise these government departments are just passengers in a captured political system. Phile Lowe has been pleading for fiscal stimulus and higher wages for years. When those pleas fall on deaf ears the RBA eventually forced to follow their mandate and lower rates. ASIC recently forced adhere to “the will of parliament” and stop pursuing Westpac over their irresponsible lending practices. ATO forced to stop chasing illegal foreign property purchases.

    • Ailart SuaMEMBER

      “Australia’s high immigration intake will boost GDP growth by 1 per cent each year for the next 30 years, according to a new briefing paper jointly prepared by Treasury and the Department of Home Affairs.”

      That’s the first paragraph from the paper from your link, Freddy. I think a 1% GDP growth each year, on the back of high immigration, is ‘pie in the sky’ if you apply the correct growth indicator – per capita GDP. Had Australia been measuring in per capita GDP – as any high-end migrant intake country should, we would have dipped into recession in 2000, 2006 and 2018.

      It’s so blatantly obvious governments are either complete morons, or they’re dependent on their cash-cow donors to tell them what to do. Maybe it’s 50/50. Whatever the case, something needs to be done about our leadership issue that puts a stop to our depleting quality of life. The voting system and Constitution is where the focus should be.

      • “Australia’s high immigration intake will boost GDP growth by 1 per cent each year for the next 30 years, according to a new briefing paper jointly prepared by Treasury and the Department of Home Affairs.”

        So, importing a further 1% of the population, lifts GDP by 1%…. no synergy uplift…..

        Thus, at best GDP per capita is zero, and can only go down from here…..

        Amazing….

      • It was more the point about taking into account the quality of life for existing residents, rather than solely focusing on GDP.

        • And my point is the focal ‘gain’ is GDP… which nets at zero at best and can only be a negative.

          If your selling point is a negative, while the qualitive of life aspects which you ignore are worse… it’s a pretty poor sell.

  1. Jumping jack flash

    Well would you look at that!

    In an environment where debt expansion and debt spending/debt demand is substituted for true economic expansion on the back of increased productivity and sales, overshadowed by the [long de-escalated by Phil] threat of rising interest rates if wage inflation breaks out, then suppressing wages with expanding the labour supply with immigration makes perfect sense.

    And the best thing about it is that bosses can implement trickle *up* economics, stealing wages which can be used to obtain more debt for spending, or service the debt they have.

    The feedback of rising interest rates due to breakout wage inflation was at least partially dampened quite some time ago by Phil in response to the GFC, which arguably was caused by the world’s knee-jerk reaction to the bank’s global debt economy naturally causing wage inflation, triggering that feedback of rising interest rates (exposing the most risky lending, of course, which was then conveniently blamed for the whole thing), which quickly brought the debt economy crashing down.

    Something we seem destined to repeat, if what everyone says is true.

  2. SupperannuationMEMBER

    They got Workchoices with the added bonus of creating more customers for their business donors

  3. “The Coalition has always been very strong on borders and refugees – ‘stop the boats’ and that kind of thing. And I think that was part of the design to disguise the high level of immigration.”

    No doubt. A ‘look over here… a distraction!’ A key question to be asked is why an ‘independent’ news media so wholeheartedly followed as elites (DLS excluded) conspired against nearly the entire Australian population with excessive levels if immigration. To what extent is Australian media simply the propaganda arm of embedded Australian elites? Anyone spending time overseas instantly realises the myopic and one-sided nature of Australian media. Thank god for the internets.

    Don’t forget this is the same media that made no comment as Australia rose from nothing to one of the biggest LNG exporters in the world for overseas companies paying zero tax here. Was there a single column inch dedicated to the debate pfwhat Australians would be getting out of it, now or in the long term? Our strong economic legacy for a gas export boon to rival the massively wealthy UAE? Is there at least one honest editor willing to go into bat for his country, family and future generations? WTF.

    • The Economies of Scale of the Ponzi run smoothly from the captured media all the from the snouts of business all the way to the politicians. Led proudly by the pathetic ABC.

    • Jumping jack flash

      The immigration was done with the noblest of intentions back in 2007. The debt economy was still fairly poorly understood and the wage inflation feedback mechanism of rising interest rates hadn’t been taken care of.

      Workchoices failed to gain traction, but that didn’t remove the [perceived] requirement for it.

      Flash forward to the present (or even 5 years ago) and it absolutely makes no sense to keep the immigration rates up. We need the wage inflation, especially since interest rates have bottomed out.

      The problem now is trying to get everyone (the central banks and economists) to calm down and accept that wages need to rise now to keep the debt party jumping, because interest rates aren’t going any lower. They seem to think the economy is far more diverse and complex than it actually is. It is basically debt creation and debt spending now, with a bit of mining et al. as a side gig.

  4. I’m told Net Immigration was 230,000 in the budget. It doesn’t look like they are taking Kohler’s advice unfortunately.

  5. All major parties are wedded to mass immigration, where they differ is the who and the visa type.

    • Jumping jack flash

      Its the businesses that are hooked on it. Business owners are convinced that if they stop paying out wages that somehow, magically, there will be people with enough money to be eligible for the debt required to buy the businesses’ goods and services and in turn make the business owners their profits and pay their wages! It is a fantasy. It doesn’t work like that.

      But the businesses give money to the government and political parties and in return they demand cheap labour despite the massive problems it causes.