Tell your local state and federal pollies where you stand on this
Whether you realise it or not, what state and federal governments do to increase Australia’s population -- or not -- is ultimately of vital importance to you. Thus, you should let your local state and federal politicians know what you think about this issue.
A positive view of it favours increased immigration, because a more lightly populated Australia will come at a high cost in jobs, houses, and security. Yet the argument persists that an influx of immigrants will cost many Australians their jobs.
The debate on immigration continues endlessly as background noise to register specifically in Australians’ consciousness ever few decades or so, and it’s registering and intensifying now because of a widely perceived need for more workers, skilled and unskilled.
Here’s a snapshot of a serious situation that’s retarding post pandemic economic growth. Sectors of the economy are short of workers, skill shortages being the worst in living memory – especially in technology, mining, and construction.
Almost a third of Australians were born overseas, but the Federal Government reports current population growth is the lowest in a century, those already here recording the lowest fertility rate on record – half that of the post-war era two generations ago.
In fact, we’re losing ground
The net in-flow of people into Australia in the financial year before the pandemic, 2019-20, became an out-flow of 100,000 in the past financial year. No wonder the jobless rate in SA is at a record 3.9% low since statistics on the rate were inaugurated in 1978.
But unless state and federal governments are proactive in increasing Australia’s rate of immigration, the nation’s population could be 1.5m less in a decade than existing statistics indicate.
Annual migration is expected to be back to about 200,000 next year and in 2024 -- which would start making up for the falling birth rate – but for a country that reached a population of 25m in 2018 (22 years earlier than forecast in the Intergenerational Report of 2002) Australia is in a surprisingly disappointing situation, given it is globally acknowledged as one of the best countries in the world in which to live and work.
With a federal election due in about three months, the government is understandably reluctant, after two years of pandemic misery during which thousands of people have lost their jobs, to overtly mount an immigration drive.
Yet it doesn’t have to do this. There are more than 200,000 people with Australian visas waiting to come here, many simply wanting to return home, and to its credit the Federal Government has decided, as part of a plan to boost the nation’s workforce, to waive the visas of young people wanting to study and work here – an initiative that could result in 150,000 students and 23,500 backpackers picking up jobs in areas experiencing critical workforce shortages.
The other side of the coin
True, in the short term, less migration will keep unemployment below 5% this year and next, and it will help increase wages and inflation, which we expect might make the governor of the Reserve Bank of Australia Philip Lowe happier than he is now, because he’s said a little inflation would be a good thing for Australia.
Although he’s also pointed out that going slow on importing foreign labour “means less investment, fewer confident businesspeople, less output, less capital stock, and a less dynamic economy”.
Far be it for Macks Advisory to be instructing newsletter readers whether they should take a stance on the pro or con side of the immigration debate, or what they should be saying to Members of Parliaments, but we’re nonetheless bound to point out that without significant migration, it will be much harder than it appears to be now for Australia to work its way out of $1.1 trillion in gross debt by 2025 – a proposition outlined in the mid-financial-year Economic Outlook.
The reality is that migration usually contributes about 1% to GDP annually and working-age immigrants who become residents are greater contributors to the Commonwealth Treasury than people born and educated in Australia.
It’s migrants who in effect pay for Australia’s ageing existing workforce. Heaped atop the nation’s record indebtedness are costs attributable to its ageing population that are increasing beyond expectation.
The Organisation for Economic Cooperation and Development (OECD) notes that stalling population growth seems likely to leave federal debt around 70% of GDP, while the number of tax-paying workers supporting each retiree has fallen from 7.3 in 1975 to four.
So, what’s the solution?
Understandably because the economy, cost of living, and possible wage rises will be issues in a federal election that has to be held before the end of May, the government won’t, as indicated earlier, be pushing a migration program in front of a population that includes so many people who have lost their jobs and/or have suffered financial hardship because of the pandemic.
However, chief executives across the country aren’t shy in saying what they feel needs to be said, namely that migration offers a possible solution to the skills shortage clouding their otherwise very optimistic view of 2022.
Many still see Australia as having a frontier economy with untapped resources ready to hand, and having its best days and most productive times ahead of it.
All are only two well aware that Australia now exists unavoidably in a contested region, that it will have a bigger and more effective say in Indo-Pacific matters if it has a strong and growing economy – to which migration can make a significant contribution.
Prime Minister Scott Morrison was prepared at least to go this far out on a limb recently when he said: “We want people to come here and being able to fill some of the shortages, particularly those who are working and being trained in health care, aged care, and those types of sectors.
“That will be incredibly helpful.”
