POST 20: IS THE FEDERAL GOVERNMENT’S RAPID POPULATION POLICY IMPACTING NEGATIVELY ON LIVING STANDARDS?

Introduction.

Australia has reached the crossroads with its huge immigration fuelled rapid population policy. For the first time in 24 years Australia has had 3 out of the past 4 quarters where the gross domestic product (GDP) per capita (per person) has been negative or zero (See Figure 1 below).[1] This means the share of the Australian economy among individuals has become smaller and it is happening more regular. This ultimately affects living standards. Yet the PM Scott Morrison believes high population growth driven by overseas migration is the key reason Australia is able to sustain strong growth in the economy and national incomes.[2]

The Australian economy has fallen to its slowest rate of growth in a decade since the Global Financial Crisis (1.4% GDP growth for the year ending June 30).[3] This is significantly lower than the Federal Treasury forecast of 2.25% for 2018-19.[4] Treasury GDP forecasts incorporate high population projections. [5] One of the main assumptions used to project government receipts and payments is the size and growth of Australia’s population.[6]

In addition Australia has the fifth highest population growth rate (1.6%) among the Organisation for Economic Co-operation and Development member countries.[7] This is more than double the population growth rates of the UK and the USA. However, GDP per capita is still slipping in Australia along with living standards. Clearly rapid population growth is not having the positive impacts on Australian’s standard of living that the politicians in Canberra would have us believe.

Federal Coalition are firmly behind excessive population growth.

The Federal Coalition is behind high immigration and population growth. Prime Minister Scott Morrison has previously signalled concerns about the effect on the budget of cutting migration.[8]One Nation leader Pauline Hanson criticised the PM on his policy to cut migration levels, arguing it is nothing more than a marketing ploy.[9]And the evidence suggests Ms Hanson has a point. For example, net overseas migration (NOM) increased by 5% to 249,700 people for the year ending March 2019.[10] Australia’s population grew by 388,800 people and NOM comprised 64.2% of the growth.[11]

The Federal Coalition’s main policy to address Australia’s excessive population growth was to cut permanent migration by 30,000 dropping to 160,000. But it is open to question if this cut will make much difference to the migrant numbers when consider the total permanent Migration Program outcome for 2017–18 was 162,417 places.[12]A key factor to mention here is that over 50% of the skill stream permanent visas go to migrants (mostly foreign students) already in Australia holding temporary work visas.[13] This is critical to understanding Australia’s rapid population growth is not driven by permanent migration but by temporary migration and it is the overseas student/worker that is having the biggest impact on population growth. Migration researchers at The Australian Population Research Institute demonstrated that without the growth in the overseas student contribution, Australia’s NOM would have fallen to a more manageable level of around 150,000 by 2017-18.[14]

Are the Federal Coalition being honest about cutting immigration?

The PM Scott Morrison has countered on several occasions that a cut to migration will negatively impact the Budget by billions of dollars.[15] One migration reporter suggests that if the government sticks to the plan to cap permanent migration – Treasury’s GDP forecasts for net migration inevitably means a huge surge in long-term temporary migration to offset the reduction in permanent migration.[16]This assertion may be getting closer to the truth because the evidence shows that NOM driven by Temporary visas is rocketing upwards.

For the most recent quarter March 2019 population growth reached one of the highest growth numbers over the past 37 years at 118,000 people.[17] But perhaps the most significant statistic to rebut PM Morrison’s claim that the Federal government are listening to the Australian public concerns about mass migration is that a substantial 73% of the population growth comprised overseas migrants. This represents the highest percentage of migrant’s contribution to quarterly population growth in 37 years.[18] This suggests that the Federal government are playing bluff with the Australian public about there intentions to cut immigration. For example, on the one hand they reduce the number of permanent visas, but on the other hand the latest data shows a huge increase in quarterly net overseas migration. One nation leader  Pauline Hanson may be correct when she suggests PM Morrison’s commitment to “freeze immigration levels” is nothing more than a marketing ploy.[19]

 Figure 1: Australia GDP per capita 1973 to 2019 (quarterly data)

(Source, Australian Bureau of Statistics, 2019.[20])

 

References.

[1] Australian Bureau of Statistics, ‘5206.0 – Australian National Accounts: National Income, Expenditure and Product, Jun 2019’, 2019 <https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/5206.0Main+Features1Jun%202019?OpenDocument> [accessed 27 November 2019].

[2] Biwa Kwan, ‘“Enough, Enough, Enough”: PM to Cut Australia’s Migration Intake’, SBS News <https://www.sbs.com.au/news/enough-enough-enough-pm-to-cut-australia-s-migration-intake> [accessed 30 November 2019].

[3] Shane Wright Bagshaw Eryk, ‘Economy Hits Slowest Rate of Growth since Global Financial Crisis’, WAtoday, 2019 <https://www.watoday.com.au/politics/federal/economy-hits-slowest-rate-of-growth-since-global-financial-crisis-20190904-p52nte.html> [accessed 28 November 2019].

[4] Australian Government The Treasury, ‘Budget Paper 1 | Budget 2019-20’, 2019 <https://www.budget.gov.au/2019-20/content/bp1/index.htm> [accessed 28 November 2019].

[5] Carrington Clarke, ‘Population Growth Needs to Be Part of the National Economic Conversation – ABC News’, 2018 <https://amp.abc.net.au/article/10615352> [accessed 28 November 2019].

[6] Australian Government The Treasury.

[7] OECD, ‘Population Growth (Annual %) – OECD Members | Data’, 2019 <https://data.worldbank.org/indicator/SP.POP.GROW?locations=OE&most_recent_value_desc=true> [accessed 29 November 2019].

[8] RMIT Fact Check, ‘Is Australia’s Population Growth Mostly the Result of Migration, and Is That Underpinning the Budget? – Fact Check’, 2019 <https://www.abc.net.au/news/2019-07-31/fact-check-pauline-hanson-population-growth-migration/11360502> [accessed 28 November 2019].

[9] RMIT Fact Check.

[10] Australian Bureau of Statistics, ‘3101.0 – Australian Demographic Statistics, Mar 2019’, 2019 <https://www.abs.gov.au/ausstats/abs@.nsf/0/D56C4A3E41586764CA2581A70015893E?Opendocument> [accessed 19 November 2019].

[11] Australian Bureau of Statistics, ‘3101.0 – Australian Demographic Statistics, Mar 2019’.

[12] Australian Government Department of Home Affairs, ‘2017-18 Migration Program Report’, 2018 <https://www.homeaffairs.gov.au/research-and-statistics/statistics/visa-statistics/live/migration-program&gt; [accessed 2 September 2019].

[13] Bob Birrell, ‘Overseas Students Are Driving Australia’s Net Overseas Migration Tide’, The Australian Population Research Institute, 2019 <https://tapri.org.au/research-reports/> [accessed 8 July 2019].

[14] Bob Birrell.

[15] RMIT Fact Check.

[16] RMIT Fact Check.

[17] Australian Bureau of Statistics, ‘3101.0 – Australian Demographic Statistics, Mar 2019’.

[18] Australian Bureau of Statistics, ‘3101.0 – Australian Demographic Statistics, Mar 2019’.

[19] RMIT Fact Check.

[20] Australian Bureau of Statistics, ‘5206.0 – Australian National Accounts: National Income, Expenditure and Product, Jun 2019’.

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