Sunday, October 26, 2008

Have we learnt nothing about immigration?

Absolutely nothing?

Immigration helps us when the economy is weak or turning down: H-E-L-P-S.

The Coalition still doesn't get it.

Now, of all times, it is calling for our immigration intake to be cut.

Today's Sunday Age:

"AUSTRALIA'S migration intake must be immediately slashed by 25% to help cope with the global financial crisis and relieve pressure on cities and the environment, says the Federal Opposition.

Amid growing concern that Australia's unemployment rate is set to increase, Opposition immigration spokeswoman Sharman Stone said plans for a record 190,300 migrants in 2008-09 should immediately be scaled back to the 2005-06 level of 142,930."

Spare me. Has she no idea? Is she really the Opposition's specialist in immigration?

Times are serious. We need to do everything we can to BOOST the economy.

Immigration boosts the economy. The time to wind it back is when the economy is overheated. Not now.

Rory Robertson takes up the case..

"While largely unstated, maintaining Australian home prices near current levels now is a major policy priority for the RBA and Canberra. Aggressive rate cuts obviously help, so too prodding of up-to 150k first-home buyers into action.

In this context, recent reports of growing pressure to reduce our immigration intake are somewhat disturbing. Recall that, during the early-1990s recession, net immigration collapsed from 170k in 1989 to just 30k in 2003 (lowest four-quarters-ended figure), reinforcing the Australian economy's tendency to stall. From a macroeconomic perspective, cutbacks of that order this time around should be avoided like the plague.

To recap, all the important policy efforts so far are counter-cyclical in nature: in particular, the RBA's rate cuts, Canberra's timely fiscal stimulus, as well as its guaranteeing of aspects of the financial sector, its promotion of mortgage lending and the ban on "short selling" (not to mention the big market-driven drop in the A$). By contrast, reducing immigration is a pro-cyclical measure, essentially working against the policy initiatives listed above."