More skills shortage baloney from the ‘stats guy’

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The “Stats Guy” Simon Kuestenmacher is a renowned immigration shill. For years he has pumped out propaganda supporting a Big Australia.

He was up to his old tricks last week, claiming that Australia faces worsening skills shortages unless it maintains historically high net overseas migration.

“Let’s start with a quick analysis of how important foreign-born workers are for each of the 19 industries above. Industrywide one in three workers was born outside of Australia”…

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“Anyone suggesting Australia should switch to a low migration approach must pick and choose from which industries workers should be withheld. Lobbyists for all industries are concerned about the skills shortage – don’t bet on any future government to slow migration down”…

“It is simply hard to let industries shrink as long as the economy and population keeps growing”…

“You cannot afford to underestimate the severity of the looming skills shortage”.

“The industry worrying me the most here is healthcare as staffing shortages have direct and very grave impacts on the nation’s health and wellbeing”.

Here is a genuine question for Kuestenmacher. Australia’s population has grown by 8.15 million people (43%) this century on the back of a massive increase in net overseas migration.

Historical NOM

How, then, is high immigration the solution to skills shortages when it has failed so miserably in the past and skills shortages today are worse than ever?

Doesn’t this tell you that simply importing people to solve shortages does not work and, arguably, has made the situation even worse?

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Independent economist Tarric Brooker asked a similar question on Twitter:

Tarric Brooker Tweet

How is it that the United States, whose immigration rate is a fraction of Australia’s, never suffers the same level of skills shortages?

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How is it that the United States can train its own workers for jobs, whereas Australia must always import them?

The sort of economic model that shills like Kuestenmacher promote is classic tail-wagging-the-dog economics.

For example, we import thousands of workers in health and aged care who then need somewhere to live. This creates a housing shortage, so we import thousands of construction workers who then need healthcare. So then we import more nurses. Rinse and repeat.

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Meanwhile, Australia’s productivity growth collapses due to “capital shallowing” because the population grows faster than business investment, infrastructure investment, and housing construction:

Capital shallowing

Source: Gerard Minack

Congestion costs also soar because infrastructure becomes increasingly crush-loaded, further reducing productivity.

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For a resource-rich nation like Australia, you literally cannot devise a worse growth model for productivity and living standards.

Because any natural advantage that Australia has via its mineral wealth is diluted among more people.

Hilariously, Kuestenmacher admitted recently that the swelling of Sydney and Melbourne above their efficient size has eroded living standards:

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“For decades, we ran a migration nation without linking our national housing and migration policies. A rather ridiculous oversight if you ask me”…

“Melbourne and Sydney both stopped functioning seamlessly in their current set-up (one main CBD, low population density, huge urban sprawl) at around 4 million residents”.

Still, Kuestenmacher and his ilk support the failed ‘Big Australia’ growth model, despite its obvious failure.

When you are in an economic hole, Simon Kuestenmacher, stop digging.

Repeating the same failed immigration policy and expecting a different result is the definition of insanity.

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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.