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Tony Abbott must rethink immigration, not slash welfare; We need more migrants in a crisis, not less
Topic Started: 10 Aug 2014, 08:37 PM (838 Views)
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Abbott must rethink immigration, not slash welfare

Callam Pickering
8 Aug, 7:10 AM

Australian politicians have embraced and run with the concept of a ‘Big Australia’, with population growth driving the economy since the onset of the global financial crisis. But with immigration crowding our Australian employment -- and our federal government slashing welfare -- is it time that we rethink our approach to immigration?

Australia’s immigration debate focuses mainly on the persecution of a remarkably small number of asylum-seekers. But there is mounting evidence that immigration by plane is posing a more pressing problem for both the Australian authorities and our domestic economy.

Yesterday Fairfax revealed explosive allegations of widespread visa fraud including granting visas to fake students. But our loose immigration policies have broader economic implications and highlight the federal government’s incoherent approach to welfare.

According to research by Dr Bob Birrell and Dr Ernest Healy, from Monash University, 380,000 recently arrived migrants have found jobs in Australia since 2011. By comparison, net job growth in Australia over that time was just 400,000 -- immigration has accounted for around 95 per cent of employment growth.

High levels of immigration have crowded out opportunities for Australian-born and overseas-born residents who arrived before 2011. The hardest hit have been younger people seeking entry-level positions and new graduates. The unemployment rate among people aged 15-24 years has climbed to its highest level since 1998.

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It’s patently obvious that Australia’s immigration policies are at odds with the federal government’s crackdown on welfare recipients. When considered in tandem the only reasonable conclusion is that it amounts to lunacy.

It is absurd that a federal government can cut and delay unemployment benefits but also sabotage the unemployed via loose immigration policies. Making matters worse, the government plans to relax 457 visa requirements and has already begun phasing in its work-for-the-dole scheme in selected areas -- a system that often makes it more difficult for participants to get off welfare (Why work for the dole doesn’t work, July 28).

Clearly Australia’s immigration system has veered off course and no longer fulfils its stated purpose: addressing skills shortages. Immigration is no longer a complement to existing workers but a low-cost substitute.

Our immigration policies are now so loose and poorly enforced that addressing skills shortages is no longer a concern. In a recent report, the Department of Employment notes that “employers continue to recruit skilled workers without marked difficulty, and the number of occupations in shortage is at an historical low”.

Australia now imports record numbers of accountants and cooks, despite both occupations being in surplus. Nursing is another area where immigration is crowding our domestic graduates.

High population growth also places pressure on existing infrastructure and typically results in greater congestion on our roads and public transport. Not to mention the long-term effect on our natural resources and environment.

Furthermore, immigration appears to provide little benefit for the existing population, with the Productivity Commission noting that migration has improved Australian real GDP per capita only modestly.

There is nothing fundamentally wrong with high immigration -- or a ‘Big Australia’, for that matter -- but it requires a federal government with a firm goal in mind. Our economic plan cannot simply be ‘strong population growth’; rather, immigration should complement the pursuit of a broader economic goal.

Australia’s approach to immigration should be simple; it should be designed around enhancing the Australian economy. This will require a contextual approach, which will depend on the state of the business cycle.

When our economy is strong -- as it has been for the past two decades -- a high level of migration may help to offset skills shortages and contain wage growth. But when times start to get tougher -- as they have been doing over the past six years -- our priority should be putting a lid on domestic unemployment.

Needless to say it certainly isn’t reasonable for the federal government to maintain its loose approach to immigration, while simultaneously tightening welfare eligibility. That amounts to cruel and unusual punishment for a group of Australians whose greatest crime is a failure to find jobs that don’t exist.

Read more: http://www.businessspectator.com.au/article/2014/8/8/australian-news/abbott-must-rethink-immigration-not-slash-welfare
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Ollie
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There was arguably a strong case for skilled migration when Australia was in the full throws of the mining boom. Up until the GFC, total employment grew faster than the labour force, suggesting genuine labour shortages. However, since the GFC, total employment has grown much slower than the labour force, which is indicative of a slack labour market and is why the unemployment rate has been rising.

It is also why the Department of Employment believes that the number of occupations suffering skills shortages is at an “historic low”, with employees reporting that “there were generally large fields of applicants vying for skilled jobs and employers filled a high proportion of their vacancies” in 2013-14.

To continue to promote a high skilled migration intake when the labour market is weak, particularly in roles that could easily be filled by locals, makes absolutely no sense. It is also particularly egregious when youth unemployment is running at nearly 14% and the number of jobs for Australia’s youth has been falling.

A big negative of Australia’s high rate of population growth is that it is placing increasing pressure on the pre-existing (already strained) stock of infrastructure and housing, which reduces productivity and living standards unless costly new investments are made. Further, controversial and expensive investments like desalination plants and road tunnels (e.g. the East-West Link) would arguably not have been required absent such strong population growth.

Further, when infrastructure and housing investment fails to keep up, it places upward pressure on inflation, requiring higher interest rates, which can then damage productive sectors of the economy. As explained in a 2011 speech by the Reserve Bank of Australia’s Phil Lowe, these factors were certainly in play in the late-2000s, when rapid population growth placed upward pressure on rents, as well as caused a big surge in utilities prices as the capacity of the system struggled to keep pace with the growing demand, requiring costly new investments.

Ongoing high population growth also places additional strain on the natural environment, causing greater environmental degradation, increasing water scarcity and pollution, and making it more difficult for Australia to reduce its carbon footprint and meet international pollution reduction targets.

A bigger concern is that Australia earns its way in the world mainly by selling its fixed mineral resources (e.g. iron ore, coal, natural gas, and gold). More people means less resources per capita. A growing population also means that we must deplete our mineral resources faster, just to maintain a constant standard of living.

Finally, modelling by the Productivity Commission has also found that immigration is neither beneficial for the economy or living standards, nor can it alleviate the impacts of an ageing population.

All of which raises the question: what is the end-game of Australia’s migration-based economic model? If all we are doing is growing for growth’s sake, pushing against infrastructure bottlenecks, diluting our fixed endowment of minerals resources, and failing to raise the living standards of the existing population, where does it lead?

High immigration and population growth is fine if it is part of a grand plan. Otherwise, it is not a genuine economic driver, but rather a way of creating the illusion of growth; of sliding backwards without anyone really noticing.
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van
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The way it works......200,000 immigrants place enough strain on the economy to create 10,000 new jobs.

"TONY created 10,000 new jobs this year.....crowd applauses."


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We need more migrants in a crisis, not less

Rob Burgess
8 Aug, 5:33 PM

This week’s unemployment data caused quite a stir, with some observers making a hasty link between the number of Australians joining the jobless queues, and the number of migrants still pouring into the country.

Monash demographer Bob Birrell led the charge, arguing in the Fairfax press that “... the number of overseas-born persons aged 15 plus in Australia, who arrived since the beginning of 2011, was around 709,000. Most of these people are job hungry.

“According to the Australian Bureau of Statistics Labour Force Survey, 380,000 of these recent arrivals were employed as of May 2014. Over the same three years, the net growth in jobs in Australia is estimated by the ABS to have been only 400,000.

“This means that these recent overseas-born arrivals have taken almost all of the net growth in jobs over this period. They are doing so at the expense of Australian-born and overseas-born residents who arrived in Australia before 2011.”

Yikes. Pull up the drawbridge. Sound the alarms.

Well not quite. Drawing a direct link between migration and jobless numbers is far more problematic than that.

The motivation for Birrell’s line of attack is clear, and quite worthy – namely that we have a youth unemployment crisis, and an under-employment crisis more generally, with welfare benefits putting an increasing burden on the federal budget.

All quite true. All very alarming.

However the matching up of the jobless numbers with the immigration numbers paints a false picture.

More importantly, this kind of assertion can easily be mis-used by populist political forces to stir unrest in the community and unfairly paint migrants as a burden on the economy when they are nothing of the kind.

The logical disconnect is found when one considers what kinds of job openings exist, where they are located and the willingness of ‘pre-2011’ Australians (to use Birrell’s distinction) to take them.

The two charts below reveal a lot about the distribution of work around the country, and the trends in the amount of work available overall since the beginning of phase one of the GFC in late 2007. (Note that the final two quarters of the second chart rely on population estimates, as the ABS has not yet published March and June 2014 figures).

The first chart shows only how the gross number of hours worked in each state has grown in the past seven years. WA seems to be romping along, just ahead of the NT, with both being well ahead of the clustered Queensland, Victoria and NSW.

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However, this picture is misleading, as it does not capture population movements. WA’s population, for instance, has grown an astonishing 21 per cent in seven years, which means its nation-beating growth in hours worked is spread across a population that is 445,000 people larger.

The second chart, therefore, shows how the number of hours of work available averages out over a state’s population. Tasmania, as will surprise few, has a far lower number of hours worked per resident each month (60 hours) compared with WA (82 hours).

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That’s not surprising as WA is still enjoying the jobs created by the construction phase of the resources boom (though that will moderate in the months and years ahead).

Most interesting, however, is what Tasmania was doing just three years ago when its average hours worked per resident was continuing to slide -- from about 65 hours at the start of the GFC to 62.5 hours in April 2011.

Even without taking population movements into account, the total monthly hours worked figure (see first chart) showed no increase through the four years of GFC.

So what was the Tasmanian government doing at that time? It was, in fact, running roadshows around recession-ravaged Ireland, hoping to recruit a range of skilled workers to start a new life in the Apple Isle.

As Business Spectator reported at the time, Tasmania was looking for workers in "medical and allied health, engineering, hospitality, urban and regional planning, agricultural science and metal fabrication and trades such as automotive mechanics, plumbing and electrical".

Were they mad? Surely they could have recruited thousands of such workers from Melbourne, Sydney or Perth?

Actually, no.

Angela Chan, national president of the Migration Institute of Australia, says that’s just not true. Employers in regional and remote Australia find it extremely difficult to fill positions with workers who have families, homes and lives in our capital cities -- cities that house the unusually high figure of 85 per cent of our population.

MIA is the umbrella group for migration agents in Australia, so there is an element of "they would say that wouldn’t they" -- especially as Scott Morrison begins investigations into how migration visas have been misused or rorted in the past few years.

However, the explanation Chan gives gels exactly with stories many regionally-based MPs have told this columnist over the years: it is sometimes easier to employ Korean workers or recently arrived refugees in Alice Springs hospitality jobs than Australians. Or to employ Iraqis to pick fruit in Shepparton, for instance.

The allure of such roles for established Australians is just not there -- as evidenced by the Gillard government’s rather fruitless attempts to coax youngsters out of capital cities with bonuses and relocation payments.

What makes a direct link of migration and jobless numbers most worrying, according to Chan, is that towns that don’t have medical staff, accountants, engineers or other skilled workers are hobbled economically -- the businesses that would otherwise employ the low-skilled, or even many other classes of skilled workers, don’t get going.

Viewed in this context, it can be argued both that we have a huge unemployment problem to solve, and that it will only be made worse by choking off skilled migrants who are just as prepared to set up house in Bendigo or Mount Gambier as Melbourne or Adelaide.

That is not to argue that all skilled migrants are wanted or needed -- just that there are good reasons to keep the flow higher than many would assume in hard times (An awkward time to mention migration, July 8).

The government will have a hard time explaining that to voters, however, as the body set up to advise on such subtleties, the Australian Workforce and Productivity Agency, was one of the first agencies it scrapped on coming to power.

But there is a lot more to the migration-jobs nexus than meets the eye.

Read more: http://www.businessspectator.com.au/article/2014/8/8/politics/we-need-more-migrants-crisis-not-less
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Dr Watson
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Edited by Dr Watson, 14 Oct 2014, 09:32 AM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Foxy
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Zero is coming...

As the economy becomes more and more automated pretend jobs need to be created.

Public sector has to grow to absorb the "workers"

The system has to put it's efforts into "religious" efforts.

Peter
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Elastic
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The argument that migrants are taking all the jobs is rubbish.
There is no doubt that a high immigration intake creates jobs particularly in construction.
However, any economic benefits are outweighed by the costs due to strain on hospitals, schools, public transport, roads and other infrastructure. The pressure on services in our cities will mean that the current high rate of immigration will come under increased scrutiny over the next couple of years.
Personally, I think Melbourne will be unliveable in a decade at the current rates of growth and the lack of any plan to deal with an extra million or so people.
Only a rat can win a rat race.

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Dr Watson
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Elastic
14 Oct 2014, 11:06 AM
Personally, I think Melbourne will be unliveable in a decade at the current rates of growth and the lack of any plan to deal with an extra million or so people.
They need to build a new hub if the current rate of growth is to be sustained (and living standards maintained). Geelong would be a suitable location for a new hub. But do our political parties have the vision or the money to do it? Probably not. That's why I think freestanding houses near Melbourne are still a good buy despite high prices.
Edited by Dr Watson, 14 Oct 2014, 11:37 AM.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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Elastic
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Dr Watson
14 Oct 2014, 11:33 AM
They need to build a new hub if the current rate of growth is to be sustained (and living standards maintained). Geelong would be a suitable location for a new hub. But do our political parties have the vision or the money to do it? Probably not. That's why I think freestanding houses near Melbourne are still a good buy despite high prices.
Yep.
Current debates regarding public transport projects as examples.
We might have a rail line to the airport about 2040.
Only a rat can win a rat race.

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Leodwald of Portsburgh
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I would say rethink immigration OR slash welfare. If our leaders want to run a massive immigration program then the current level of welfare is simply unsustainable and besides if you want to invite hordes of foreigners to take up residence and citizenship in this country I am very disinclined to happily support these strangers.

BTW: My taxes this year had a break down of where the money is spent and healthcare far eclipsed welfare but it never gets a mention like it is some sort of sacred cow. I can guarantee their are many unnecessary snouts in this particular trough. Slash medical spending. People blindly trust this industry but if they bothered to do a little research they would be shocked and dismayed to discover just how evil and corrupt big pharmaceutical companies are.
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