Scott Morrison will seek to bring the debate over immigration and refugees to the centre of the election campaign, with an announcement that a Coalition government would freeze the humanitarian intake.
He will contrast this with Labor plans for an increase in the humanitarian component, claiming this would cost many billions of dollars and challenging Bill Shorten to produce more detail about the consequences.
So far immigration has not had a prominent place in the campaign. The border security issue went quiet when the expected large number of applications for transfer from Nauru and Manus after the medevac legislation failed to materialise.
Morrison on Sunday will announce that the number of migrants coming to Australia as refugees will be frozen at 18,750.
He will appear at a rally with John Howard, who as prime minister was strongly associated with a tough border policy.
The government has already announced a cap on the migration program of 160,000. The previous cap was 190,000, although the actual intake had fallen to about 160,000.
It will contrast its freeze on the humanitarian intake with Labor’s plan to increase it to 32,000 by 2025-26.
Morrison will also outline the proposed makeup of the humanitarian program for the first time. This will include an overall target of 60% of the offshore component allocated to women. Women made up 50.8% in 2017-18.
The Coalition’s Women at Risk program, as a proportion of the offshore component, would be increased from 14% in 2017-18 to 20% (3,500) in 2019-20.
The government also plans to try to boost the number of refugees and humanitarian entrants settled in regional areas from a target of 30% to 40% in 2019-20. But it stresses that people would not be forced to areas that did not want them.
Some 27% of the humanitarian program will be reserved for Women at Risk and the Community Support Program, which is private sponsorship from church and community groups.
In comments ahead of the Sunday announcement, Morrision said: “We’ve got our borders and the budget under control. We make decisions about who comes here based on what’s in Australia’s interests.
“Australia isn’t just about growing our population – it’s about quality of life. We’re capping and freezing our immigration growth so our government’s record A$100 billion congestion busting program for roads and rail can catch up and take the pressure off our cities.”
Morrison said the government had been upfront that it was reducing the migration intake cap and capping the number Australia let in under its humanitarian program – that was one of the most generous in the world.
“We are telling where we’ll be taking migrants from, who they will be, the skills we want them to have, and working with regions to settle people in towns that want and need more workers, skills and students.
“It’s time for Bill Shorten and Labor to front up and tell Australians about their $6 billion plan to massively increase immigration and where they’re going to house thousands of extra people.
“Labor’s immigration bill is going to go through the roof and the only way they can pay for it is taking $387 billion in higher taxes from Australians.”
The government some time ago put a costing of $6 billion over the medium term on increasing the government-funded humanitarian intake from 17,750 to 27,000 by 2025-26.
This article is part of a series examining the Coalition government’s record on key issues while in power and what Labor is promising if it wins the 2019 federal election.
Immigration policy will be a major issue in the 2019 federal election. We know this because immigration has featured significantly at every Australian election since the 2001 “children overboard” election.
David Marr and Marian Wilkinson argued in their 2003 book, Dark Victory, that willingness to play the race card in relation to boat people was a decisive factor in John Howard’s election victory. For Tony Abbott, “Stop the boats” was a major campaign theme when the Coalition won back government in the 2013 election. The current prime minister, Scott Morrison, rose to prominence as Abbott’s unyielding immigration minister who stopped the boats.
While the events of Christchurch may have cramped the opportunity for the Coalition to run hard on fear, promising to be tough on borders and tough on (Muslim) terrorism, the dog-whistle politics on the issue of refugees and asylum seekers will be there for those wanting to hear it.
The Coalition governments of Abbott, Turnbull and Morrison have in fact increased Australia’s annual humanitarian intake significantly. The number has risen from just over 13,750 to more than 18,000 – though the government has not loudly broadcast this fact.
Australia – and the refugees – coped well, demonstrating the nation’s capacity to significantly increase refugee intakes. Our research with newly arrived Syrian, Iraqi and Afghan refugee families suggests they are settling well in Australia, receiving a warm welcome from locals in the cities and regional centres. Employment and family reunification are their key worries.
Each year the Australia government sets the permanent immigration targets. Until recently this was set at 190,00. In practice just 162,000 immigrants have been admitted over the past year or so.
A token cut and 2 new visas
In this context Prime Minister Morrison’s announcement that the permanent immigration target will be cut to 160,000 is really no change in immigration policy. There is nothing to see here if you dismiss the need to be loudly anti-immigration in the current populist political climate.
The announcement is linked to congestion-busting in the major cities of Sydney and Melbourne. It is accompanied by the introduction of two new visa pathways – the Skilled Work Regional (Provisional) Visa and the Skilled Employer Sponsored Regional (Provisional) Visa – for skilled migrants to live and work in regional areas for five years.
These visas offer the carrot of permanent residency at the end of three years to attract new immigrants to regional Australia. In addition, the budget announced that scholarships to the tune of $94 million over four years would be available to domestic and international students who study there.
Most immigration policy debates centre on permanent immigration intakes, particularly of humanitarian immigrants and asylum seekers. Yet annual temporary migrant intakes – international students, working holidaymakers and temporary skilled workers – are three times greater than the permanent intake. Over 800,000 temporary migrants were in Australia in June 2018.
This issue goes not just to the ethics of maintaining a temporary migration program largely premised on migrant worker exploitation. It also resonates with Labor’s campaign for a living wage and the restoration of penalty rates for workers in response to the low rate of real wage growth in Australia, which constrains consumer demand.
The 2019-20 federal budget allocated extra funding to the Fair Work Ombudsman to bolster enforcement action against employers who exploit vulnerable workers and announced the National Labour Hire Registration Scheme to target rogue operators in the labour hire industry. However, the research suggests wage theft is widespread in the small business sector, a key target for tax relief in the budget. It is an area of immigration policy that requires considerably more resources and punch.
Opponents of Australia’s strong immigration program will be disappointed.
In announcing a cut in Australia’s migration ceiling from 190,000 to 160,000 per year, federal population minister Alan Tudge launched an all-out defence of immigration as a driver of economic prosperity.
It has not only boosted gross domestic product and budget revenue, as would be expected when with more people, but also also living standards – measured as GDP per person. Tudge explained:
This is often not sort of fully understood. Not only does population growth help with GDP growth overall, but it helps with GDP per capita growth too. It’s actually made all of us wealthier.
In fact, Treasury estimates that 20% of our per capita wealth generated over the last 40 years has been due to population factors. How does that come about? In part because when we bring in migrants, they come in younger than what the average Australian is. On average, a migrant comes in at the age of 26. The average age of an Australian is about 37. So it very much helps with our workforce participation, and that’s essentially a big driver of our GDP per capita growth.
Prime Minister Scott Morrison added:
I would also mention from a pensions point of view and social welfare point of view, achieving more of a balance in the working-age population means there’s more people in the working age to actually pay for the pensions and the welfare bill for those who aren’t able to be in the workforce and with an ageing population.
The lower ceiling announced on Wednesday will make little difference to Australia’s migrant intake. It is already close to 160,000, at about 162,000. Other changes will attempt to influence where migrants settle.
Two new regional visas for skilled workers will require them to live and work in less urban Australia (outside of Sydney, Melbourne, Brisbane, Perth and the Gold Coast) for three years before being able to become a permanent resident. Of the 160,000 potential places, 23,000 will be set aside for these visa-holders. International students studying outside the big cities will get access to an extra year in Australia on a post-study work visa.
Immigration shouldn’t supress wages
Tudge’s acceptance that migration neither boosts unemployment nor cuts wages is consistent with most evidence from Australia and overseas.
New arrivals increase the supply of workers (such as teachers and house-builders), which might be expected to depress existing residents’ wages. But there are two countervailing forces.
First, migrants also increase the demand for goods and services (as the arrivals’ children get taught and their homes get built), which might be expected to boost preexisting residents’ wages.
Second, if migrants fill jobs that would otherwise go unfilled, they can boost the productivity, and hence the wages, of existing residents.
Most studies of migration shocks, such as the repatriation of more than a million French citizens to metropolitan France after the Algerian civil war, have found that the net effect is close to zero.
There is hardly any evidence that it does
An exception is work in the United States by George Borjas, who found that the boatlift of 125,000 mostly low-skilled immigrants from Cuba to Miami in 1980 did suppress the wages of low-skilled Miami workers, if not Miami workers overall. But this finding has been disputed.
In 2015 Nathan Deutscher, Hang Thi and I set out to replicate his work, using changes in the immigration rates of different skill groups to Australia to identify the effects of immigration on the earnings and employment prospects of particular groups of Australian workers.
We isolated 40 distinct skill groups at a national level, identifying them with a combination of educational attainment and workforce experience and examined six outcomes – annual earnings, weekly earnings, wage rates, hours worked, labour market participation rate, and unemployment.
We explored 114 different possibilities, controlling for macroeconomic conditions and for the fact that immigrants to Australia are disproportionately highly skilled with higher wages.
Some of our estimates showed immigration had a negative effect on some groups of incumbent workers, but the positive effects outnumbered negative effects by three to one. The vast majority of effects were zero.
The statistical basis for our finding of no overall effect was incredibly strong. It more than passed the standard tests.
Our research only looked at one, very limited, aspect of immigration. Immigrants can also bring cultural and demographic benefits. And until infrastructure catches up, they can increase congestion.
But immigration doesn’t seem to harm either jobs or wages, a point the Morrison government is right to acknowledge.
The government has announced a reduced annual cap on migration of 160,000 for each of the next four years, as well as measures to stream a greater proportion of migrants to regional areas and boost the skilled component to these places.
The overhaul of the program comes after pressure from various quarters including conservative Liberals for immigration to be lowered, and the government talking up the need for “congestion busting”.
The government said cutting the migration cap by 15 per cent would reduce the maximum intake by a cumulative 120,000 over four years.
But the migration cap, although it is 30,000 lower than the present cap, in fact broadly reflects the actual current level of intake.
Last year permanent migration fell to its lowest level in a decade as a result of visa and other tightening.
Two new regional visas will be introduced for skilled workers, requiring them to live and work in regional areas for three years before being eligible to access permanent residency.
Skilled Employer Sponsored Regional and Skilled Work Regional visa holders will be given priority processing and will have access to a larger pool of eligible jobs.
Some 23,000 places will be set aside for regional skilled visas – this is a rise from 8,534 in 2017-18. This 8,534 represented only 7.7% of the total 111,000 skilled migrants; their visas required them to live and work in regional areas only for two years before being able to apply for permanent residency. The 23,000 will be 21% of the skilled intake.
There will also be new tertiary scholarships for Australian and international students to study in the regions – these will be worth $15,000 and go to more than 1000 local and foreign students annually.
International students studying at regional universities will be given access to an extra year in Australia on a post-study work visa.
The government says the new migration program increases the focus on skills, with the number of Employer Sponsored skilled places rising from 35,528 in 2017-18 to 39,000 in 2019-20. The family stream of the program hasn’t changed with 47,732 places available in 2019-20. The squeeze on the cap comes in the form of a reduction in the independent skilled category.
The program’s composition will be kept at about 70 per cent in the skilled stream and 30 per cent in the family stream.
The reduction in the migration ceiling will have no impact on the budget.
Scott Morrison said the government’s plan “manages population growth by adopting well targeted, responsible, and sustainable immigration policies”.
Morrison said migrants “are an invaluable part of Australia’s economic and social fabric. Our economic strength is supported by a successful migration program that brings skilled people of working age”.
He warned against those who wanted to run scare campaigns as a result of the announcements, saying they would be taking Australians for mugs.
Better targeting the intake would address skills shortages and benefit the whole economy, he said. “It will take pressure off in those cities that are straining, while supporting the cities and towns that are keen to have stronger growth”.
Morrison said managing population growth was not just about the migration intake, but also about infrastructure, city and regional deals, congestion busting projects, removing traffic bottlenecks, funding essential services, and providing key skills to regional to rural areas.
“Our plan marks a turning point in the way population is treated across government, with a move to greater collaboration, transparency and longer term planning. It is a comprehensive plan that engages and partners with our states and territories and local governments.”
Morrison said he wanted Australians to “spend less time in traffic and more time with their families”.
“Meanwhile I know we have rural and regional communities that have plans and opportunities to grow their shires, who are looking for more people to come and settle in their districts to fill jobs, inject more life into their towns, and shore up the important education and health services for the future they rely on.”
Bill Shorten played down the change in the migration cap, saying it was a 1% reduction from the 162,000 actual intake of last year. “That’s fine – I’ll always be guided by the experts”.
The net effect of all of these movements can change the recorded “net overseas migration” in ways that are inconsistent with what’s been happening to the migration program.
If, for instance, the Australian economy picked up and fewer Australians decided to leave for better prospects overseas, recorded “net overseas migration” would increase even if the migration program hadn’t.
The two have been moving increasingly independently since mid 2006 when the Australian Bureau of Statistics changed its definition of “resident”, making temporary residents more likely to be counted in the population and their movements counted in net overseas migration.
Over the past five years, the number of international students arriving has increased every year but there have been few international student departures.
Inevitably, the departures of students will increase in future years and recorded net overseas migration will fall sharply again.
So, forget the near-record official net overseas migration figure of 262,000 – the underlying level of net overseas migration is more likely to be around 200,000. The underlying level of population growth is about 1.4%, and falling.
We’ll need strong migration for at least a decade
A new study by Shah and Dixon finds there will be 4.1 million new job openings in Australia over the eight years between 2017 and 2024.
Over two million of these new openings will be due to “replacement demand”, effectively replacing the retirements from the labour force of baby boomers.
There will not be enough younger workers arriving to fill the gap.
In the absence of international migration and assuming constant age-specific employment rates, the number of workers under the age of 35 will fall by over half a million between 2016 and 2026, essentially because of the small number of births in the 1990s.
It means that without migration Australia would face a labour supply crunch unlike anything it has ever faced before.
Slowing or redirecting it won’t slow congestion
The mismatch of labour demand and supply makes this an extraordinarily bad time to cut migration.
The labour market is at its hottest in Sydney and Melbourne.
Investment contracts involving new employment are signed and the construction of the new transport infrastructure promised in these cities will only increase the demand.
Logic and economic theory tell us that workers move to where the jobs are, and jobs move to where the investors invest.
If, in some way, official migration into Sydney and Melbourne was restricted, the jobs in Sydney and Melbourne would still have to be filled and would go instead to workers moving from the rest of Australia or New Zealand or temporary skilled migrants.
As a result the restriction would do little to reduce population growth in these cities. It would however, strip other states and territories of the workers they need. It would make the flow of the best and brightest from Adelaide and Perth to Melbourne even bigger.
Diverting, say, 15,000 permanent skilled immigrants away from each of Sydney and Melbourne in 2019-20 would have no impact on transport congestion.
Indeed, it might make it harder to build the required infrastructure, making congestion worse.
We’ll need it to ease a painful transition
Migrants will be needed in order to smooth the looming dramatic and uncomfortable changes in the age structure of our population.
Migrants don’t only do this because they are young; they also do it because, before they themselves grow old, they have had children and grandchildren.
Net overseas migration of 200,000 per annum would give us 6.8 million more people of traditional working age by 2051 than would no net migration, but only 400,000 more people aged 65 years and over.
It would place Australia in a better position to support its aged population than any other country in the OECD.
Immigration policy will be a critical issue in forthcoming state (Victoria, NSW) and federal elections. The disproportionate impact of immigration on population growth and public infrastructure in Sydney and Melbourne is the key issue.
If we look to the example of another immigrant-friendly country, Canada, however, we can see how giving states and territories a greater role in immigration target setting and selection can help take the pressure off major cities without drastically reducing immigration rates.
Immigration certainly impacts on Australia’s population to a greater degree than most Western nations. Among OECD countries, only Switzerland and Luxembourg have a higher percentage of foreign-born people than Australia.
Today, 28% of the Australian population was born overseas. The key issue for Australia is that immigrants are more likely to live in large cities than smaller cities or regional areas. According to the Australian Bureau of Statistics, 85% of immigrants live in major urban areas, compared to just 64% of Australian-born people.
Morrison has also called for a major rethink of the “top-down” approach to immigration in Australia, allowing states and territories to request the number of skilled migrants they’d like to admit each year.
Morrison wants to see a bigger role for states and territories:
This is a blinding piece of common sense, which is: how about states who plan for population growth and the Commonwealth government who sets the migration levels, actually bring this together?
What we can learn from Canada
The Canadian government gave provinces a say in setting targets and selecting economic immigrants – similar to Australia’s skilled migration intake – in the early 1990s. Quebec was first to receive a high degree of autonomy in the process – it was given the right to set its own level and selection criteria for all economic immigrants. (The ability to speak French was a must.)
After Quebec was given this authority, the other Canadian provinces demanded the same. But they received far more limited rights than Quebec. They can nominate the number of economic migrants they need as part of the national immigration target set by the federal government, but they can’t independently set their intake target and selection criteria like Quebec.
While provinces nominate – or in Quebec’s case, decide – annual intakes, all cases are still routed through Ottawa for application integrity testing and vetting for criminality, health and security. Ultimately, final approval rests with Ottawa.
Last year, the Canadian government set an ambitious target of admitting 1 million total immigrants from 2018-2020. The target for next year is 330,000 immigrants, of which about 190,000 will be economic migrants. The remainder will enter under the family reunification category and the refugee, humanitarian and protected category.
About one-third of the economic migrants (61,000) will be admitted through the Provincial Nominee Program. This figure excludes Quebec, which will set its numbers separately.
How the Canadian system encourages rural immigration
Giving the provinces a greater immigration policy role has helped to dramatically shift the settlement of immigrants beyond Canada’s biggest cities.
According to immigration statistics, 34% of economic migrants in 2017 landed in destinations outside Canada’s three most populous provinces, Ontario, Quebec and British Columbia – compared to just 10% in 1997.
After immigrants arrive, the key issue for the provinces is retention, since immigrants can leave at any time. The provinces put a strong emphasis on ensuring that economic migrants receive a strong welcome on arrival and are provided with support programs, including education, access to local migrant community networks and assistance finding a job for those who are not sponsored by employers.
One of the biggest success stories of the Provincial Nominee Program is thinly populated Manitoba, which has added 130,000 migrants since 1998. Ninety percent have gotten a job within a year of arriving and nearly the same number has ended up staying in Manitoba permanently. New arrivals also express some of the greatest feelings of belonging of all immigrants in western Canada.
Why this could work in Australia
South Australia, Tasmania and the Northern Territory – as well as other regional and rural areas across Australia – want more immigrants and refugees.
Attracting immigrants to less-populated states is the easy part: those willing to settle outside Sydney and Melbourne can receive more points if they are skilled migrants, possibly making the difference as to whether they come to Australia or not. The key issue is retention.
My fieldwork with refugees in Australia has shown that the majority of these migrants love living in regional communities and have received a warm welcome from locals. Our research also found they are willing to stay in regional areas if they can get jobs there. Another way of encouraging more immigrants to settle in regional areas could be to offer them priority in the family reunion process.
Importantly, Canada also doesn’t politicise immigration policy. Australia should follow Canada’s lead by giving the states a bigger seat at the immigration policy table and resisting the temptation to blame immigration for complex growth problems in our overcrowded cities.
Reducing the immigration intake cap will have no significant impact on reducing congestion or strain on public infrastructure in Sydney and Melbourne, but it could severely constrain economic growth.
This week, Prime Minister Scott Morrison and Home Affairs Minister Peter Dutton announced the federal government’s intention to introduce changes to Australia’s citizenship-stripping laws. The proposed changes would likely make Australia’s regime for citizenship-stripping the most expansive in the world. I’ll outline how the proposal would change the current law, and analyse its key elements.
What are Australia’s current citizenship-stripping laws?
In 2015, Australia introduced one of the most expansive regimes anywhere for citizenship deprivation on national security grounds. Under the current law, people can lose Australian citizenship against their will in two key ways:
Conduct-based citizenship deprivation: In certain circumstances, a citizen outside Australia can lose citizenship where the person has engaged in activities defined by reference to national security offences. A person does not need to be convicted of an offence to lose citizenship in this manner.
Conviction-based citizenship deprivation: The Minister for Home Affairs also has the power to revoke a person’s Australian citizenship where the person has been convicted of particular national security offences, and sentenced to at least six years’
imprisonment. This is generally the only way in which people within Australia can be stripped of Australian citizenship against their will.
Currently, it is possible for the government to strip a person of Australian citizenship only if the person is a dual citizen. This means that, at present, Australian law does not allow a person to be deprived of Australian citizenship if this would render them stateless.
Dutton has said that the existing citizenship-stripping laws have been used to deprive nine people of their Australian citizenship. Very little information on the circumstances of these deprivations is available. However, it is clear that at least six of these instances involved citizens outside Australia who lost their citizenship on the basis of conduct committed overseas. There has been no reported instance of a person within Australia being deprived of Australian citizenship, or of the conviction-based ground for citizenship deprivation having been used.
What changes would the proposed laws introduce?
The government’s new proposal would make it easier for people to be stripped of their Australian citizenship in two ways.
Changes to the dual citizenship requirement
If the proposed changes become law, it will no longer be necessary for a person to definitively hold dual citizenship before losing Australian citizenship. A joint media release from the offices of Morrison and Dutton states:
The Government will…change the threshold for determining dual citizenship. This change aims to improve the minister’s scope to determine a person’s foreign citizenship status.
A bill has yet to go before parliament, and it is not clear from this statement exactly what the government envisages. One possibility is the legislation will give the minister the power to decide whether or not a person is a foreign citizen. This is likely to raise constitutional difficulties. As the High Court has made clear on many occasions, whether a person is a foreign citizen is a question determined by the law of the foreign country concerned.
Another possibility is that the legislation will allow a person to be stripped of Australian citizenship where the minister thinks it is reasonably likely, but not certain, the person has dual citizenship. As the recent referrals of multiple federal parliamentarians to the High Court over potential foreign citizenship illustrate, it can often be difficult to conclusively determine when a person has foreign citizenship. However, many people – including those born in Australia to Australian parents – hold dual citizenship as a result of a familial connection to a foreign country.
A change of this nature could also raise constitutional problems. The High Court has not yet determined the extent of the Commonwealth’s power to deprive a person of Australian citizenship. There is a plausible argument that certain citizens, especially those who hold only Australian citizenship or who have no substantive connection to a foreign country, are part of the Australian constitutional community, and are protected against citizenship deprivation.
On a practical level, enabling the minister to revoke a person’s Australian citizenship without it being clear the person has citizenship in a foreign country creates a very real risk of rendering the person stateless. This would place Australia in violation of its obligations under Article 8 of the 1961 Convention on the Reduction of Statelessness, which prevents signatory countries from depriving people of their nationality if it would render them stateless.
Where a person inside Australia is deprived of Australian citizenship they become vulnerable to removal from Australia, and immigration detention until removal is possible. Where it is not clear that the person has citizenship in a foreign country, there is a likelihood of such detention being lengthy, or even indefinite.
Changes to the minimum sentence for conviction-based deprivation
The government’s media release also says:
The proposed changes would enable the minister to cease the citizenship of anyone who is convicted of a terrorism offence in Australia, irrespective of the sentence they receive. This removes the current requirement that a terrorist offender must be sentenced to at least six years’ imprisonment.
Currently, the minister has power to revoke a person’s citizenship only on conviction-based grounds where a person is convicted of a select list of national security offences. It is not clear whether the government intends to retain or expand this select list of offences.
Either way, the proposal is concerning. In 2015, before the current citizenship revocation laws were introduced, the Abbott government attempted to attach citizenship revocation to a much wider range of national security offences, with no requirement for a minimum sentence. A number of experts advised that this ran a risk of falling foul of the Constitution.
The more limited current legislation was ultimately arrived at following an inquiry by the Parliamentary Joint Committee on Intelligence and Security. It found that restricting the list of offences and requiring a minimum six year sentence was necessary to “appropriately target the most serious conduct that is closely linked to a terrorist threat”. Since 2015, the national threat level has not changed.
In this context, the government should clearly explain why removing the six year sentence threshold for conviction-based citizenship deprivation is necessary and proportionate. Given that the conviction-based citizenship-deprivation powers have not been used since their introduction, the need for a clear justification is particularly strong. The government’s media release states:
We now need to focus attention on strengthening the citizenship loss provisions which commenced in 2015 as they relate to terrorists within Australia, in order to protect our community.
Scott Morrison has flagged the Australian government will respond to public
pressure and cut the immigration cap, saying he has heard “loud and clear” the protests of Australians about overcrowding in the biggest cities.
“They are saying: Enough, enough, enough. The roads are clogged, the buses and trains are full. The schools are taking no more enrolments. I hear what you are saying,” Morrison said in a speech in Sydney on Monday night.
“That’s why we need to improve how we manage population growth in this country.”
Morrison said he would “move away from top-down discussions about population to set our migration intake caps.
“I anticipate that this will lead to a reduction in our current migration settings.
“This is to be expected since our current permanent intake is almost 30,000 a year below our current cap [of 190,000]. So we will look to make an adjustment as we go forward in to next year and this should not be surprising.”
When federal treasurer, Morrison was reluctant to yield to the strong pressure from the right in the Liberal party about immigration levels, although the government was actually reducing the intake in practice, while the cap remained unchanged.
But as prime minister he has increasingly been reacting to the mounting community pressure on the issue, while foreshadowing a comprehensive population policy, including the involvement of the states.
In his speech, Morrison argued the economic benefits of immigration – including temporary migrants.
But he said that far too often planners had treated population “as one amorphous blob”.
“That doesn’t work for Australia. We’re too big and diverse. Talking about average population growth is like talking about our average rainfall. It fails to recognise the different experiences and outlooks of different cities or regions.”
Morrison repeated his plan for a discussion with the states and territories about local population growth, although the Commonwealth would always retain responsibility for determining the overall intake.
The conversation should be “grounded in data, economics and community sentiment”, he said.
“A responsible population discussion cannot be arbitrarily about one number, the cap on annual permanent migration. It is certainly relevant, but you have to look at what sits behind those numbers.
“For a start, more than half the people who become permanent migrants are already here on temporary visas.
“To contemplate our permanent visa settings would also require upstream changes to how many people are coming in on temporary visas as well. The implications of this need to be understood, including by state and territory governments.”
Morrison said changes must be done in a way that ensured states wanting more people were not disadvantaged and that there were mechanisms to send new migrants to where there were jobs and services.
“Managing population change is a shared responsibility, involving all levels of government,” he said.
“It is the states who build hospitals, approve housing developments, plan roads and know how many kids will be going into their schools in the future.
“The states and territories know better than any what the population carrying capacity is for their existing and planned infrastructure and services. So I plan to ask them, before we set our annual caps.
“The old model of a single national number determined by Canberra is no longer fit for purpose.
“While the benefits of population growth are widespread – in terms of economic growth and a more skilled and enriched society – the pressure points are inevitably local and varied.
“It’s about getting the balance right and understanding there is variation between our cities and regions. So we need a more targeted and tailored approach to conversations about population.”
Morrison said he was writing to state and territory leaders for their input, and putting the population issue on the Council of Australian Governments meeting agenda. The council meets on December 12.
The states’ population plans would “feed into the setting of our migrations caps and policies for next year, ensuring that migrations is finally tied to infrastructure and services carrying capacity”.
This week we’re exploring the state of nine different policy areas across Australia’s states, as detailed in Grattan Institute’s State Orange Book 2018. Read the other articles in the series here.
A dangerous fantasy is taking hold in Australia: that government policy can divert population growth from our bulging capital cities to our needy regions. It’s a fantasy because a century of Australian history shows it won’t work. And it’s dangerous because it gives governments an excuse to avoid the hard decisions on planning and transport needed to make housing more affordable and cities more liveable.
Since Federation, state and federal governments have tried to lure people, trade and business away from the capital cities. These efforts have mostly been expensive policy failures.
Despite substantial government spending on regional development aimed at promoting decentralisation, Grattan Institute’s State Orange Book 2018 shows the trend to city-centred growth has accelerated in the past decade. Less than a third of us now live outside the capital cities.
With the exception of Western Australian and Queensland mining regions, capital city economies over ten years have grown faster than regional economies. That’s mainly because their populations have grown faster.
Incomes per capita, on the other hand, have generally grown at about the same pace. Employment participation for women is similar too, although 25-to-64-year-old men in regions are 7% less likely to work than men in cities.
The economic advantages of cities over regions appear to be increasing as people spend more of their incomes on services rather than goods. Services businesses often prefer to be close to other services businesses, typically in large cities.
Regional growth programs in Australia have a poor record of trying to push economic water uphill against these trends.
The key problem is that people will only move to regions if there are extra jobs. And policies to encourage more jobs in regional areas also have a poor track record. The money on offer from government is rarely enough to outweigh the economic advantages for a business of locating in a city instead.
Most of the time we don’t even know whether regional development programs work because they are so badly administered. Auditors-general in NSW, Victoria, Queensland and WA have all found substantial regional development money being spent with no business case, or poor documentation, or without reference to application guidelines, and with no evaluation of whether the programs achieved the promised outcomes.
The overwhelming impression is that governments don’t really want programs evaluated because they know all too well what the answers will be.
Cities are important for innovation and economic growth. Cities offer more opportunities to share ideas, which both attracts skilled people and increases their skills once they arrive. Despite the rise of the internet and reduced telecommunication costs, innovation seems to rely on regular face-to-face contact between people in different firms, which therefore tend to aggregate in large cities.
So pushing extra people to regional areas runs the risk of reducing Australia’s productivity growth and per capita incomes.
So what about regional ‘dormitory’ suburbs?
Another strategy, much discussed in Victoria as it heads into a state election campaign, is to encourage the growth of regional towns as dormitory suburbs for people working in cities. Obviously this only works for regional towns that are relatively close to capital cities, with good transport links. Hence the big-spendingpromises to upgrade regional rail services.
But it is unclear why regional dormitories should be considered better than building suburbs on the city fringe. These fringe suburbs often provide access to more jobs in the other suburbs nearby.
In any case, the transport infrastructure needed to ferry people from homes in regional areas to jobs in the city is not cheap. Far better to relax planning laws to allow higher-density living where people want to live and can be close to a wide range of jobs – that is, in the established middle and inner suburbs of the capital cities.
The danger of distorted spending priorities
The fantasy that governments can divert population growth from cities to regions is also dangerous because it distorts spending priorities in regions. Government services probably improve regional lives more than government spending that is supposed to promote business growth. Government spending on regional arts and sports facilities probably has a much bigger impact per dollar than an extra kilometre of dual-lane highway.
Government spending per person on education and health is in fact already higher in regions than in cities, even if service levels are often lower because they cost more to deliver. But if governments are going to spend more on regional services, the money may need to be spent differently.
Grattan Institute analysis shows that poorer health and educational outcomes in some regional areas are primarily the result of socio-economic status and other risk factors – not remoteness. In health, for example, the substantial gap in mortality between regions and cities appears to result not from more distant hospitals but from people in regions tending to exercise less and have poorer diets.
Economic theory and policy experience, in Australia and other advanced economies, expose the “repopulate the regions” push as wishing thinking. As this series of articles based on Grattan Institute’s State Orange Book 2018 will show, there are better ways for governments to promote a growing Australia.
Many who fear Australia’s population boom believe we should be cutting down on immigration. They blame immigration for congestion and expenditure of environmental and other vital resources. They say Australia’s cities are becoming overcrowded and cannot sustain more people.
But if Australia were to cut down on immigration, it would also then make sense to introduce policies that limit numbers of international tourists and students. Why single out one group of people? If any person living in Australia drains a certain amount of resources, it stands to reason this is also the case with short-term visitors arriving year after year.
Not only do tourists and international students add to crowded trains, trams and buses, think of all the environmental resources they consume – such as the water hotels spend on frequently washing their sheets.
Just as with migration, tourist numbers are on the rise in Australia. The number of international tourists (blue line) increased from just over 4 million in 1997-98 to nearly 8 million in 2015-2016. Settler arrivals (people living in Australia who are entitled to permanent residence) increased from 81,000 in 1998 to 135,000 in 2016.
My crude calculations show that if Australia were to allow zero tourism, it could accommodate roughly 900,000 more migrants. As a comparison, Australia’s total migration intake is around 190,000 per year.
But of course curbing tourism, or immigration, isn’t a feasible option. Tourists, international students and migrants all add positive value to Australia.
As a general rule, the monetary amount spent across a group of people in a population is considered a rough approximation of the amount of resources that have been used. So, to get an idea of the resources short-term visitors to Australia (which includes tourists and international students who stay for less than a year) might use, I extracted data on how much they spend on goods and services.
Then I calculated the approximate number of migrants who would be spending the same amount of money. This gave me a rough indication of how many extra migrants we could let into the country per drop in tourist numbers.
I was a bit generous in terms of working off the assumption that migrants spend the same amount on goods and services as “native” Australians. I used ABS data for my calculations, which were:
First, I subtracted the amount international tourists spend (which includes students who stay less than a year) in Australia (this was A$33,917 million in 2015-16) from the total spend in Australia (A$940,822 million in 2015-16). This gave me an idea of the amount spent by Australian residents only (A$906,905 million in 2015-16).
I then worked out the average consumption of residents per capita by dividing it by the population (around 24 million in 2015-16). This came to A$37,680 million for every 1,000 people.
Then I divided the total spend of international tourists by the per capita amount (per 1,000 residents) spent by residents. This came to 900,213 in 2015-16.
I also did similar calculations assuming tourists consumed 10% and 20% more than migrants.
The fact we could have 900,000 extra migrants if we had no tourists is a very rough number. The point is not the exact number. Even if the more accurate number was 400,000, that number is large. The purpose of this exercise is to show that migrants, as one group of people, don’t pose the most significant risk to our population in terms of resources drained.
It’s a rough guide
As already mentioned, my calculations were crude. More detailed calculation of resources consumed by both groups (immigrants and international tourists) would compare the different impacts on growth and employment of immigration. But for the purposes of this exercise, I’ve carried out more limited calculations.
The demographic profile of immigrants is also different from that of international tourists. And the spending patterns of immigrants would be very different from those of the tourists. Immigrants would be buying white goods, for instance, such as refrigerators, vacuum cleaners. Tourists would be buying these services indirectly through renting rooms in hotels, Airbnb and the like.
But we wouldn’t shut down tourism, as we know it has a positive impact on our economy. And research generally shows that immigration has a slightly positive effect on Australia’s employment rate and gross domestic product (GDP). A recent government report also shows that cutting Australia’s migration rate would cost the budget billions of dollars, lower living standards and reduce jobs growth.
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Both tourism and migration make a positive impact to our economy, and no one group should be blamed for draining our resources.