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."

9 comments:

Anonymous said...

Article is correct: maintaining Aus home prices near current levels is a major policy priority for RBA and govt.

There is a nexus between housing costs and the Accelerating Migration policy the Labor party is pushing. Liberals called this policy “Go for Growth” leading up to the last election.

The government Intergenerational Report 2007 (IG2) indicates we are in phase one of a social engineering experiment that involves increasing the population of Aus by 1,000,000 over the next 3 years.

The ulterior motive for IG2 is unfortunately infantile.

The ulterior motive is to keep GDP increasing. It does not matter that each immigrant is a mini-infrastructure bottleneck requiring shelter, transport, white goods, furniture, food and services such as medical, education, electrical and water etc.

With the virtual elimination of Aus manufacturing industry now almost complete, increasing immigration today does little other than provide Aus economy with more (190,300) reasons to import stuff (affects Balance of Trade).

I would have thought the last thing Aus needs now is more private debt on the balance sheet. Artifically boosting the economy equals inflation.

Also, given the unbackable odds that unemployment will rise in the next couple of years, there may be some wisdom in cutting immigration in the short term.

In terms of housing, it is estimated that Aus currently has an annual housing supply deficit of up to 45,000 homes (HIA figures): http://www.abc.net.au/news/stories/2008/08/19/2340062.htm?section=business

One solution: Simply cut immigration by say 50,000 until things settle.

Salient Green said...

Population growth, anytime, anywhere in a resource constrained world is self destructive madness. The world needs to learn to cope without it before it leads to a catastrophic population decline in the future.

This economic crisis is the perfect opportunity for the world to change the way it does business, ie, stop aiming for and relying on 'growth'.

Are our political, business and media leaders wise enough to enact such a change? I doubt it.

Anonymous said...

The benefits of immigration are questionable. Besides impacting the environment, the sheer cost of providing health services, education, unemployment benefits and a host of other services is estimated at about AUD$15 billion each year.

Add to that the Westpac finding that our immigration program adds about AUD$9 billion each year to our foreign debt.

If there are any advantages to be had from immigration they aren’t obvious.

Our immigration intake should be zero.

Michael S said...

Wait, where's the analysis that immigration boosts the economy aside from the belief that it keeps house prices high?

And how are high house prices good for the economy?

Salient Green said...

I must add that it's not the Coalition's idea to cut immigration numbers as a recent MSM online poll showed that 80% of us wanted a reduction.

Using immigration to boost the economy is like eating rice bubbles, it fills you up but is not sustaining. Australia has been on a rice bubble diet for a long time and has allowed the sustaining jobs to go overseas.

the kitchen slut said...

Somewhat journalistically negligent that there is no reference here to previous reports in previous days that the Guv was already looking at cutting back immigration with no reference to anything to do with the opposition?

I could give you links but why the f*** should I if you are not ppepared to do your own professional journalistic work?

Peter said...

Dear Kitchen slut,

This is the reference:

PRIME MINISTER. INTERVIEW WITH NEIL MITCHEL, 3AW. OCTOBER 10, 2008

MITCHELL: Because of the economic situation, would you review our immigration policy, you know, our immigration targets? Cut immigration levels?

PM: As with all previous Governments, and mine is the same, whenever we set immigration targets, we will adjust them according to economic circumstances of the day. Those targets that you’ve referred to before represent an increase on the previous year and that was in response to demands from employers across the country, particularly in Western Australia and Queensland and in the mining and resource intensive states, for more skilled labour. What we’ll do in the future is adjust according to economic circumstances.

MITCHELL: So does that mean we’ll expect less immigration next year?

PM: We’ll wait for the advice on what’s needed where and it’s not one-size-fits-all across the country, that’s the problem we face Neil.


Make of that what you will.

You obviously have.

But it's not exactly a Sharman Stone style call for immigration to "immediately be scaled back".

At the very least you would have to agree that he leaves himself plenty of 'outs'.

the kitchen slut said...

There was also a media report quoting the immigration minister flagging imminent cuts matey .......

Frankly the immigration question comes back to whether we have an economy capable of building houses for them at any half reasonable global competitive price .... which just now and for several years past we don't .....

Peter said...

Matey, Senator Chris Evans spoke in response to Sharman Stone, on Sunday morning - at about the same time as I typed the above post actually.

He didn't endorse what she had to say and he didn't flag imminent cuts, as you think you read that he did.

Here's a report of the several things he did say.

On the one hand:

"Clearly if the demand for labour comes off you'd adjust the migration programme accordingly"

On the other:

"We know that [migrants] consume, they buy property, and they're a net positive to the budget"

And on balance:

"The government will take a sober look at those issues and make a decision when we have got proper information"

Again, make of it what you will. While confused, it is not in the same league of economic illiteracy as Sharman Stone.

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