Population Research WA is pleased to say that support for a much lower immigration future is coming from the most unlikely places, and an immensely powerful organisation.
The Morrison government’s mass migration planning is coming under more scrutiny now that influential Australian economists are calling for an end to the Governments huge net overseas migration plans.
The latest is Reserve Bank governor Phil Lowe, setting himself on a collision course last week with big business and sections of the federal government by stating the bleeding obvious.
That is, Australia has used immigration as a means for keeping the cost of labour subdued. Making the point repeatedly that adding to the supply of workers keeps wages low. See Australian Bureau of Statistics Graph below.
It’s pretty basic economics, really. I wonder how the Morrison government will respond.
Interestingly in his speech Mr Lowe argued that one plausible scenario (after the gradual opening of the borders) is reforming migration policy to prioritise overseas workers with high skills that are in short supply.
This excludes a large number of temporary foreign workers, which are working in lower skilled industries. Furthermore, foreign students represent a significant portion of Australia’s lower skilled workforce and they provide direct competition to lower skilled Australian citizens. In this context, perhaps it is time to reassess foreign student automatic work permits?
One key highlight in the Graph below is the significant drop in Australia wages from around 2008. The same period net overseas migration spiked at 315,000 and a massive supply of low wage temporary foreign labour arrived in Australia.
Australia’s great immigration con job.
Somewhere along the way, however, canny politicians figured out the great immigration con job: that by adding ever greater numbers of people, you automatically get GDP growth.
“That’s because GDP is a crude yardstick. It simply measures the amount of stuff you produce. The more people you’ve got, the more you consume, and the more you produce”.
Big business loves it too. Which is why they are always pushing for more, even when there is significant domestic unemployment?
“Not only does the influx of workers keep wages low, but all those extra people also end up consumers of products”.
Has Australia’s enormous migration programme resulted in deteriorating living standards? Over the past 15 years Australia has reached historically high levels of net overseas migration. Throughout this period Australian households have experienced declines in Gross Domestic Product (GDP) per capita.
GDP per capita is a accurate measurement of household income and wealth.
In 2018 Australian households experienced two consecutive quarters of declining GDP per capita (-0.1% in Sep- 18 and -0.2% in Dec-18). Some commentators argue, consecutive quarters of GDP decline per capita, represents a “GDP per capita recession”.