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The neglected stimulus

The furore accompanying this year’s minor surge in illegal ‘boat people’ has obscured the Rudd government’s decision to cut legal immigration to Australia.

The furore accompanying this year’s minor surge in illegal ‘boat people’ has obscured the Rudd government’s decision to cut legal immigration to Australia.

The furore accompanying this year’s minor surge in illegal ‘boat people’ has obscured the Rudd government’s decision to cut legal immigration to Australia. In March, immigration minister Chris Evans cut the number of places available in Australia’s permanent skilled migration programme from 133,500 to 115,000 for 2008-2009, and the May federal Budget foreshadowed a further fall to 108,100 in 2009-2010. The government believes these cuts ‘reflect the economic climate’ and will ‘protect local jobs’. But they can only curb Australian employment and stifle our prosperity, and the minister’s claimed ability to ‘adjust immigration levels according to the economic circumstances of the day’ is heroic but hopeless. Indeed, the economic lull overseas offers a unique opportunity to attract even more skilled young workers to Australia.

Migration remains the catalyst of Australian prosperity, yet we vie with Mongolia and Namibia for the world’s lowest population density. New South Wales’s seven million people inhabit a state 20 per cent larger than France, a nation of 62 million and itself widely considered sparsely populated. Endless tracts of empty arable land separate Melbourne and Sydney.


Belief that migrants ‘take jobs’ remains a stubborn snippet of economic stupidity, all the more surprising for its easy refutation. The massive flow of people settling in Australia after the second world war bears no relationship to the unemployment rate. And nor should it. The number of jobs in a country is directly related to the number of citizens; an influx of new people automatically fosters demand for food, clothing, accommodation and entertainment that in turn provides more jobs. Indeed, more than 180,000 people arrived in Australia in 1969, and unemployment was about two per cent. When 50,000 arrived in 1975 — the lowest ever annual intake — unemployment was more than double that. Besides, what skilled young migrant would travel around the world to languish purposely in a dole queue?

The government’s logic, by contrast, suggests graduating high school students should be discouraged from seeking work in order to prevent damaging competition for ‘local jobs’. Only by keeping potential workers out of the workforce can an ailing economy be restored, it seems! Far from being a drain, skilled young migrants arrive having been educated at no cost to the Australian taxpayer.

Not to worry, however: although the unconditional skilled migration has been scaled back, since December the government has bolstered its Critical Skills List, fast-tracking related applications. This salute to Soviet technique tries to discern where and which type of skilled migrants Australia requires, as if a ponderous bureaucracy in Canberra can aggregate Australian businesses’ needs and assess what services the population deems ‘critical’ — not to mention the furphy that a worker’s training determines what he can do or desires to do for the rest of his life. Floor tilers, podiatrists and urban planners are among the critical professions from 16 March 2009. However much Sydneysiders might sympathise with the latter, it remains absurd that a young East European with no dependents, for instance, with a master’s degree in economics and good English, cannot migrate to Australia.

Since October, the Rudd government has been rampantly ‘stimulating’: surely now the most obnoxious word in the public lexicon, a tendentious, obfuscating banality. Various ‘security strategies’ have been implemented, all of which entail borrowing large sums of money from overseas to hand out indiscriminately, and contracting for goods and services that no one wanted enough to pay for himself (Pink Batts, new school walls and ‘social’ housing, for example). Amid the heated debate about whether all this was a good idea, no one suggested skilled migration might vivify our economy. Skilled migrants inevitably bring with them their own money to spend. In fact, skilled migration is the ultimate economic stimulus package: more domestic spending without the need to borrow, and with useful people thrown in for good measure — the best sort of infrastructure. If the government believes that ‘skilled migration plays a crucial role in stimulating the economy’, as minister Evans confusingly claims in his media release, then it should not suddenly be slashing the annual skilled migration intake by 20 per cent.

The Howard government almost doubled the annual migrant intake to 150,000 during its tenure. But as a fraction of Australia’s population, our intake has dwindled. Robert Menzies proudly boasted in 1963 that his government would that year settle in excess of 135,000 migrants, among a population of barely 10 million people. That is the fraction we should be aiming for, and both sides of Australian politics should unite behind it. As Labor prime minister Ben Chifley said in 1949, ‘immigration means security … the full development of untapped resources. It means a better, happier, more prosperous life for every Australian’.

Calls to expand Australia’s population inevitably raise the hackles of the Green lobby, whose ridiculous claims that Australia cannot sustain more people would be comic were they not such a drag on our future. In any case, surely a larger Australian population would give Australia’s ‘green’ initiatives greater effect and diplomatic consequence, and would enhance our security too. North Korea’s latest bout of sabre-rattling heralds a difficult strategic century, one better faced with more people.


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