Net Migration and the Intergenerational Report

I was going to write a long post about the migration implications in the Intergenerational Report released today. But this would be largely pointless.

Instead, here is the chart from page 12 showing the projected migration rate as a proportion of population:

Screen Shot 2015-03-05 at 9.29.57 pm

The government assumes that by 2055, the net overseas migration rate will be 0.5 per cent of population, roughly equal to the average rate seen between 1973-2006.

If this strikes you as odd, it should. Migration policies have transformed radically since this time period. You can see this with reference to the period 2007-2018.

How anyone can make this assumption is beyond me.

Until you consider, in the words of the IGR:

  • “Lower levels of net overseas migration would lead to lower population growth rates over time and, therefore, lower economic growth.”
  • “Migrants, on average, are younger than the resident population. Migration reduces the average age of the population and slows the rate of population ageing.”
  • “Migrants tend to be younger, on average, than the resident population, and therefore increase overall labour force participation rates.”

Got it? Migrants = higher economic growth. Migrants = slower ageing. Migrants = higher labour participation.

I wonder why anyone would want to deliberately pick a lower rate of net migration?

A nation beyond? Reframing migration, settlement and engagement

Pessimism is the overwhelming emotion I feel when considering Australian migration in 2015.

Michael Pezzullo, the Secretary of the Department of Immigration and Border Protection, has called for his department to “reframe” how they see themselves. In a speech to staff extracted to the Mandarin, he says:

For us as a department, we should assist in this national endeavour by re-framing how we see our role. Yes settlement will be an ongoing element, but the mission of mass migration that was set for us in 1945 is long accomplished and should be declared so. More than settlement, we should look to become Australia’s gateway to the world, and the world’s gateway to Australia. On occasions, at times of heightened threat such as caused by terrorism or pandemics, we will need to act as the gatekeepers and as necessary man the ramparts and protect our borders. But the overwhelming and predominate role of the department will be to act as the open conduits of Australia’s engagement with the world around us, whether for the purposes of trade, travel, or migration — for time limited purposes or for tomorrow’s settlers. And how different will tomorrow’s settlers find tomorrow’s Australia: a unique society and culture in a unique land, a fusion of the ancient and the modern, proud of the ancient culture of our first peoples, our British legacy and our multicultural unity-in-diversity.

This is a clear break with how the Department of Immigration has seen itself for decades. A disposition of openness has quickly transformed to one of caution.

Mr Pezzullo does not attempt to gloss his message. The “gateway” paints a picture of control, a border that is both high and wide, with but a small window to pass through. The Department of Immigration as a “gatekeeper” neatly describes the new policies that will see some staff carry weapons. Usurping the traditional role of the federal police, gazing toward the United States for inspiration, Mr Pezzullo wants a department with a more overt focus on keeping people out.

“Terrorism and pandemics” should require a calm explanation of the situation, not a trumpet call to ‘man the ramparts’. Australia’s response to Ebola last year was a case in point of how not to make migration policy. Arbitrary bans on the movement of people are nothing more than knee-jerk reactions that inflict damage. A immigration framework tilted in this direction betrays a startlingly negative outlook towards anyone outside Australia.

Mr Pezzullo edges close to implying “we’re full”. Declaring mission accomplished for mass migration in Australia signals a strong message that the Department should shape migration policy based exclusively on the flow of people in and out of Australia instead of also incorporating people who want to live here and those who already do. There is a need for checks and balances in any system yet the emphasis of the border above all else combined with the lack of support for the great migration tradition of settlement is spectacular coming from the person at the very top of the migration bureaucracy. Indeed he seems to completely miss the point about settlement, saying “but we should increasingly reframe our national self-understanding and speak more of engaging with the world, and not just settling our land”.

The concept of settlement has often been poorly understood by the public yet never by a Secretary of the Department of Immigration. Settlement is not about ‘settling our land’ but the process by which new migrants settle within the existing society. This is a process not bound by geography or land but one embedded in the hearts and minds of our community.

Settlement has deep roots in the Department of Immigration. The process of welcome and assistance has been refined over time, successfully reiterated according to the demands of the time. This was relatively easier back in the day as nearly everyone who migrated to Australia did so permanently.

Today things are different. Temporary and circular migration intertwine with settlement. Should the government and department help a new migrant settle if they may head home within five years? When should a non-english speaking migrant be eligible for english lessons if they are on a temporary visa? These questions remain unresolved. Disappointingly, instead of tackling them head on, Mr Pezzullo is more interested in removing them from view. Given he sees the link to the land instead of the people who live on it as the central component of settlement, this is unsurprising. His desire for engagement with the world occurs naturally when new migrants feel they belong in Australia, not to be seen as simply a number alongside import and export quarterly reports.

Shifting the discussion away from settlement is a grave error. While Mr Pezzullo says the age of mass migration is over, I contend he is wrong. Australia remains a destination where people migrate to in large numbers. In fact, the number of new arrivals is trending up. You can see this by looking at the net migration figures.

The past decade is second only to 1945-55 in terms of how many migrants have arrived as a proportion of the population. Perhaps we are entering a new era of mass migration? Perhaps not. But for the bureaucrat charged with oversight of migration in Australia to belay such sentiment is extraordinary and anathema to a 70 year project.

The next Intergenerational Report is due out before the end of February and should project a figure between 220,000 and 240,000 migrants coming to Australia each year for the next 50 years. How these people settle – not how they are screened by gatekeepers – is the most important question for Australian society stemming from our migration policies. For Mr Pezzullo to side-step this in favour of a more muted “travel, travel and migration” agenda is baffling.

Even if Mr Pezzullo wants the age of mass migration consigned to the history books, a migration framework which he oversees is the catalyst for the higher number of new arrivals. Temporary migration has removed much of the control governments once had over the number of migrants arriving in Australia. Decisions once made by bureaucrats in his very position are now made by employers and migrants themselves. Many of these temporary migrants transition and become permanent residents and Australian citizens. Putting the genie back in the bottle would not only be difficult but a disaster on multiple policy fronts.

This means settlement is arguably more important than ever before. In Australia’s first age of mass migration, society was more homogenous. Diversity was in its infancy. English was easier to learn. Communities were stronger. Information spread slowly.

Today Australia is the most successful diverse nation in the world. This did not occur by accident. Settlement is a primary concept of this success, bringing untold political, social, cultural and economic benefits. But the maintenance and improvement of this unique environment requires hard work. People, money, thinking and commitment are all necessary to continue this rather incredible human experiment. This hard work is currently missing and the future will be poorer for it.

Remarkably, the tone of the speech is almost more striking than the theme. Mr Pezzullo appears to come from the in-your-face school of rhetoric. This bravado is best summed up by this passage:

With every passing year, we move further away from the vestiges of these colonial origins that came about as a consequence of the imperatives and decisions of an expanding Empire. But we must never forget that legacy. If you doubt this, ask yourself this question: what did these imperial, red-coated Romans ever do for us? What, other than giving us:

  • Parliamentary democracy;
  • Representative government, commencing with self-government in the 1850s;
  • The rule of the common law, an independent judiciary and the check on executive power;
  • Our public institutions, including the architecture of executive government and its agencies in which we serve today;
  • The separation of the parliament, the courts and the executive government;
  • The freedom of speech, belief, faith and ideas;
  • The English language;
  • The settlement and farming of the land, and the building of our cities; and
  • The foundation of our modes of cultural expression, which have of course evolved distinctly and independently.

Apart from these things, what indeed did the British ever do for us?

Those accustomed to how leaders of public service agencies communicate should be surprised and disappointed.

This borderline rant veers into extremely subjective areas. Mr Pezzullo appears to be egging on his detractors by venturing head first into questions traditional enmeshed in the esoteric world of Australia’s culture wars. One can easily imagine the above passage front and centre of the next Quadrant magazine. This is a poor outcome for a bureaucrat charged with impartially implementing Australia’s migration policy and unimaginable from those who have preceded him.

A final comment. This type of discourse points to the explicit link between asylum policy and migration policy.

In the past, I believed it was possible to clear disaggregate these policies into distinct entities. The Howard government walked that line with remarkable skill.

I’m less sure this is the case today. The direction migration policy is now heading is wrapped up in the words and images of the broader asylum debate unlike before. A hardline approach has begat a small but growing group of acolytes intent on “reframing” migration away from what it means for society and towards what it means for security.

This has incredible ramifications, particularly for political leadership. For progressives, Australia’s successful multicultural society is being shoved to the past and nobody appears to be that interested. For conservatives, this is simply another policy area where the nefarious words of our security discourse are crash tackling the great tradition and status quo of Australian migration and simultaneously reasserting the power of the state at the expense of the individual. I hope we are able to stumble back from the edge we are fast approaching but until those with powerful voices speak up, this will continue to go unnoticed.

A comment on Tim Colebatch’s Inside Story article

Tim Colebatch has an important piece on the labour market over at Inside Story (read it before this if you haven’t already). He notes from 2011 to 2014, Australia’s working age population grew by over 1,000,000 people yet only 385,000 jobs were created. This phenomenon is largely underexplored.

Colebatch writes well and I think his point that we don’t do very well with our public discourse on the labour market is spot on. Perhaps it’s our obsession with industrial relations?

Regardless, one part of his discussion focuses on the increasing population. This includes a higher rate of migration that is currently about one per cent of the population. He doesn’t mention this but the current rate of net migration is one of the highest periods in Australia’s history (see here), another largely underexplored policy area.

Here is an extract from Colebatch on migration:

A net migration rate of more than 1 per cent means that each year Australia is adding between 200,000 and 250,000 more migrants than it is losing. I have no problem with that, if there is enough work around to employ new and old Australians alike. But the jobs figures make it clear that there isn’t.

The problem is exacerbated because a growing proportion of migrants are being brought here, on section 457 visas and other means, by employers to do specific jobs, rather than employers training Australians to do them. This inevitably means fewer job opportunities for existing workers.

This shortfall could be made up if the temporary workers spent enough money here to employ the existing workers they displace, but that is unlikely. The Bureau does not measure remittance payments – a serious omission in its database – but it is clear that many temporary workers are here precisely because they plan to send much of their earnings home to their families.

In good times, there’s nothing wrong with that either, but these are not good times. Immigration policies need to fit society’s needs; running a high immigration program amid low job demand is bad economic policy. The Menzies government knew better; it controlled the immigration tap to keep the long boom going. We should learn from our past successes.

There are a few things I’d like to address.

First, here are the most recent four year net migration forecasts he discusses, broken down by visa category:

Screen Shot 2015-01-22 at 9.29.40 pm

(Source: DIBP, Outlook for Net Migration – September 2014)

Colebatch is right that there are between 200,000 and 250,000 new net migrants forecast to arrive in Australia each year. In fact, in June 2018 its higher than that at 256,900.

However he disappointingly singles out the 457 visa as an example of employers bringing in migrants instead of training Australians. As the table above shows, the 457 visa makes up approximately 5-8 per cent of the net migration total. The larger cohorts of new migrants are international students, working holiday makers and family migrants. New Zealand citizens outnumber 457 visa holders in these forecasts (I’m not sure I believe this but that’s a different story). You could halve the 457 visa figure and still not make a even a minor dent in the net migration total.

This reflects the relatively poor state of how immigration is discussed in economic circles. People know what a 457 visa is and typically you are either for it or against it, with little middle ground. But in reality, the visa plays a small role compared to its oversized public profile, at least when talking about population (I’m as guilty as anyone here).

Next, Colebatch says it is unlikely new migrants spend enough money to replace the workers they displace. I’m not sure I agree with the proposition. While some new migrants likely act as substitutes for local workers, other new migrants likely act as complements. This means instead of displacing Australians, they are enabling more employment. New migrants – on average – have higher education levels than Australians and act to increase low-skilled workers wages. Further, we have very little evidence on how much new migrants spend in the economy. What Colebatch calls unlikely, I say is mostly unknown. This is especially pertinent if we account for the amount of money international students spend per year, as they are the single largest cohort of new migrants. Their consumption through tuition fees, rent and other spending is substantial. My economics is not good enough for a fiscal multiplier debate but I’d like to see one before we close this case.

Finally, Colebatch calls a high immigration policy in a poor economy “bad economic policy” and invokes the Menzies government as a model to follow in controlling migration. Unfortunately returning to a Menzies-era migration policy is, I think, akin to calling for the reintroduction of fixed exchange rates. The Hawke, Keating, Howard, Rudd and Gillard governments have changed immigration policy and willingly given up control to other actors, such as employers, universities and migrants themselves.

Colebatch may not agree with this but suggesting a return to the 1950s is misplaced in my view. One only need to look at the British government’s election commitment to lower net migration “to tens of thousands” to see how difficult it is to control migration so tightly. More than ever before, migration trends are dictated by two forces that governments largely do not control – relative economic performance in a global world and existing migrant networks. Australia, even in the current economic environment, is sitting right near the top in terms of global attractiveness to potential migrants (see here for a longer explanation on control).

This is not to say the government does not policy levers to use. The largest cohorts contributing to our historically high immigration figures – international students, working holiday makers, permanent skilled, New Zealand citizens, family migrants and humanitarian migrants – can all be affected by policy decisions. Yet to significantly lower these numbers would require very difficult choices. These should be spelt out when we talk about reducing net migration. In addition, Colebatch does not speculate on the potential benefits these migrants bring. I’ll not go into detail here, suffice to say I think these benefits are substantial and should not be dismissed without consideration.

By no means do I think our immigration framework is perfect. Some migrants get abused and a minority of employers seek profit at the expense of eroding wages and conditions. But I also think most employers do the right thing and the vast majority of new migrants are a net economic positive over the short- and long-term.

Tim Colebatch’s piece is a good read. Yet I believe it also shows how far we still need to come when even our most informed economic commentators remain at least partially unwilling or unable to fully explain the role of immigration on the labour market. Improving the system is difficult when the a callback to the 1950s is offered as a possible guide.

A gender issue? Educated, recent (permanent) migrants in the labour market

We know some migrants tend to struggle in new labour markets, regardless of their previous experience or qualifications. This is because they don’t have the advantages of natives. But over time, and certainly by the second generation, migrants mostly become just like everyone else. But in the meantime, governments and employers need to make sure structural issues don’t impede first generation migrants and their settlement.

In Australia, due to a skilled migration framework, many new migrants have a set of skills and/or experience which puts them in a good position to perform well in the labour market. However a key part of Australian policy is to have the option of full inclusion of family members (spouses and children) on arrival. These new migrants have full work rights in the labour market.

Data from the last Census (and a DIBP database) shows a specific issue: educated, recently arrived migrant women struggling in the labour market.

Table: The difference between post-2000 migrant men and women (who hold permanent visas) when compared to native Australian men and women for key labour market indicators;

Postgraduate Degree Graduate Diploma and Graduate Certificate Bachelor Degree Advanced Diploma and Diploma Certificate
Full-time/Pop 9.6% 7.8% 7.1% 8.2% 14.0%
Part-time/Pop 2.5% 3.5% 4.5% 3.3% 1.5%
Employment/Pop 12.0% 11.2% 11.6% 11.6% 15.5%
Unemployment rate -3.1% -2.5% -3.2% -2.6% -3.6%
Participation rate 10.3% 9.1% 10.3% 10.9% 14.1%

(Source: Census 2011, ACMID 2011)

(Note: these permanent migrants have generally arrived in Australia since 2000 so these figures reflects current policy settings as opposed to those from the 1970s).

The unemployment rate for Bachelor Degree holders in Australia was 3.3% for men and 3.3% for women for Census 2011. For recently arrived (permanent) migrants, it was 4.9% for men and 8.1% for women (ACMID 2011).

After comparing migrant men and Australian men and migrant women with Australian women, the comparative unemployment gap between migrant men and women is -3.2% [(4.9-3.3) – (8.1-3.3)].

The table shows large advantages for educated migrant men when compared to educated migrant women. Men have comparatively better rates of full-time employment, higher participation rates and lower unemployment rates. These are all key indicators for economic prosperity and long-term settlement into Australian society.

These differences arise as migrant women have relatively similar outcomes as native Australian women (with the exception of unemployment) but migrant men have higher outcomes than native Australian men.

There are some basic explanations of this. About 65-70% of “primary” migrants are men. This means they are being selected based on their human capital and demographic characteristics. Some will already have a job in Australia while others will already have qualifications approved for work in Australia. “Secondary” migrants (spouses and children) are majority female and do not have these benefits.

However the extent of these labour market differences is surprising and important. A 10% participation rate difference in relation to Bachelor Degrees shows there are serious gains to be made by better integrating recently arrived migrant women into the labour market. These people are predominantly young, highly educated and, with an unemployment rate of over 8%, looking for work.

They won’t look forever and we know the first 5 years for a first generation migrant play a critical role for their economic and social settlement. Better figuring out how to assist new migrant women who are not the primary visa holder into successful labour market outcomes will provide substantial long-term gains.

(Note: The dataset used to analyse these outcomes only focuses on migrants who hold permanent residency visas and thus excludes International Students, 457 visa holders, Working Holiday Makers and New Zealand citizens).

Government control and Australia’s population

I’ve just finished one of the best books I’ve ever read. David Halberstam’s The Best and The Brightest is a torrid tale of public administration on how the Kennedy and Johnson Administration’s undertook policy towards Vietnam.

My biggest takeaway was thinking about the concept of control. Again and again, Halberstam references how the principle figures involved – Johnson, Maxwell Taylor and Robert McNamara – sought to control events and their environment. Time after time, small failures led to larger and more costly failures because those making the decisions believed they were in control. Bad decisions compounded as the illusion of control proved impossible to shatter.

What struck me was how this relates to contemporary public policy and administration. I think it’s common many people believe the government of the day can and should control particular events such as interest rates, petrol prices and carbon emissions to name a few. Yet there are a myriad of external factors which make this harder than it used to be and, perhaps, harder than the government lead us to believe.

I was drawn to considering how this intersects with regard to Australia’s migration policies.

For the numerically substantive part of Australian migration – skilled workers, students, family members, amongst others – I think the Australian government has a decent degree of control over both the number and type of migrants who arrive. We are after all a large, isolated island, making this task easier for us than other countries who attempt the same thing (see the United Kingdom as the primary counter example). But while the government can dictate policy decisions, it is also dictated to by economic and social factors outside its control. No government can simply turn the tap on or off when it comes to migration.

This has been poorly explained by each government over the last three decades, particularly as some control of migration has been ceded – willingly – to external economic and social forces. This has a number of consequences (positive and negative) but in the public domain, none captures the imagination quite like the impact on population.

This debate is about to rear its head again. The Abbott government will release the fourth Intergenerational Report in early 2015 (date to be determined). IGR4 will show that Australia is adding between 220,000 and 240,000 people each year through migration. This means that by 2050, Australia’s population is on track for approximately 38-39 million people. This is slightly higher than Kevin Rudd’s “Big Australia” of 36 million from 2010.

There will be lots of commentary on this topic. But unfortunately much of it will likely miss a foundational question: does the government control the population of Australia? You can argue for a bigger or small population but outlining how this is achieved is more difficult.

This is because significant sections of Australia’s migration program are not capped by government. There is no cap on the number of international students who can attend higher education institutions. Employers can theoretically sponsor an unlimited number of skilled migrants. Millions of young people across the globe have the opportunity to live and work in Australia as backpackers without queuing for the right to do so.

Instead of caps, migration is regulated with other policy tools. Barriers such as age, work experience, qualifications and language are used to determine who is eligible to migrate as opposed to the number of migrants. This naturally limits the number of people who are eligible while allowing others to determine the level of migration.

I like to think of this as a soft cap (shout out to any NBA salary cap nerds). As an example, the government could regulate the minimum salary for a 457 visa holder as $1,000,000 and watch as employers stopped hiring new migrants. Technically, no cap on the number would have been imposed but the program would be impossible to use. This is primarily why most business advocates argue for lower barriers while unions argue for higher requirements.

Under this framework, the actual number of people who come to Australia under each visa category is impacted a variety of factors but not directly controlled by the government.

Economic forces play a primary role. The number of Irish immigrants to Australia skyrocketed as Irish unemployment rose from 2009 as the Australian economy was relatively excellent compared to Ireland. International students will likely increasingly choose Australia – relative to other countries – because of the cheaper Australian dollar. For a generation, New Zealand citizens came in great numbers to Australia yet over the past two years, New Zealand is experiencing a net inflow of people from Australia given it’s improving economy.

Social factors also play a strong role. Social networks formed by diaspora communities act as links to other countries and encourage future migration. This occurs through family migration channels but also through economic migration channels as existing connections reduce the cost of migration. In Australia, a growing Chinese community is laying the groundwork for future Chinese migrants. The same is likely true of the Indian community and new humanitarian communities, such as the Karen and Sudanese. Even if economic forces were completely neutral, these social links would dictate migration trends regardless of government regulations.

While the government could take measures to directly cap the number of migrants, this would have flow on effects. Universities would have to accept less funding or require an increase in public money. Businesses would go without filling skills shortages. Opportunities for Australians to travel overseas would be restricted. Existing migrants would experience frustration. Instead, both the ALP and the Coalition prefer to use regulation to shape the number and type of migrants who come to Australia.

This is radically different from what used to occur but three decades ago. I also find that not many people are aware this is how migration now works. This explains why our population debate is seriously uninformed.

There is one thing the government has strict control over: the number and allocation of permanent residency visas. Each year in the Budget, a number of permanent residency visas is chosen. For 2013-14, this number was 190,000 for skilled and family visas.

In the past, this number accurately reflected the number of likely immigrant arrivals. A new migrant would arrive with a permanent visa, with the vast majority making Australia their new home. Yet today, the majority of people who receive a permanent residency already live in Australia and hold a temporary visa when they arrive. This means the government’s primary tool in historically controlling immigration has been lost.

Therefore the current policy framework is less effective, less controlling, at determining the number of people who arrive as immigrants in Australia. You can argue whether this type of temporary migration is good or bad but its akin to arguing whether we should return to a fixed exchange rate. The world has changed and Australia has changed with it. With it, the fundamentals of the population debate have also changed.

So when you see a hot take in the coming months about Australia’s population, remember to think about why this has happened and what the ramifications might be of sudden, knee-jerk reactions to a toxic debate.

The role of Borders: An ominous future

I used to think people who worried about language and rhetoric were focusing on the wrong part of problems. I was wrong. Language acts to emphasise what is important. The ability to shape public opinion by words and context is critical. Nowhere is this more evident than how as a society we talk about immigration. Many examples abound. I want to focus on one and what it portends for the future.

After the ALP lost the 2013 election, the Department of Immigration and Citizenship was renamed the Department of Border Protection. On Thursday, the new Secretary – Mr. Michael Pezzullo – provided the “new” Department with his worldview of how we should imagine immigration in a speech titled, “Sovereignty in an Age of Global Interdependency: the Role of Borders“.

Mr. Pezzullo appears a realist in the most traditional sense. His view of global order is heavily influenced by Henry Kissinger, who he references glowingly early on. Here Mr. Pezzullo hints at what is to come:

“It could be said that the political and economic dimensions of the global order are, however, in tension. As the global order seeks to become more open, with fewer constraints on the flow of people, goods, capital, data and knowledge, the primary building block of the global order – the state – retains its ancient coding as a vehicle for territoriality and exclusion.”

Mr Pezzullo leaves no doubt where he sits in relation to any tension. After outlining one view that borders can be seen as “a cost and time imposition” flowing from the ‘economic logic of globalisation’, his central thesis boils down to the following paragraphs:

“As the Secretary of the department which is charged with protecting our borders, I prefer to see borders in a very different way. I see them as mediating between the imperatives of the global order, with its bias towards the flow of people, goods, capital, data and knowledge, and the inherent territoriality and capacity for exclusion which comes with state sovereignty. Rather  than  anticipating  or,  much  worse,  desiring  the  emergence  of  a  ‘borderless  world’ – a concept which makes no sense in the global order of sovereign states – we should see borders as the connection points of a globally connected world. In other words, global travel and trade, labour mobility, and the migration and movement of peoples are best mediated and managed by connected border systems.

The border is a strategic national asset. Border control points, systems and processes sit astride supply chains and travel pathways. The very design of borders can add to economic competitiveness and productivity, by fostering rapid movement and border entry or exit. Fostering legitimate trade and travel, while remaining vigilant for national security, law enforcement and community protection purposes, and while also using border controls as an extension of economic revenue and industry policy, are not contradictory policy objectives. Today they are intrinsically integrated and connected functions of state.”

I read this as strong borders are good borders. Borders must be protected and controlled given the implications they have for the sovereignty of the nation-state. It is in the emphasis where we see Mr. Pezzullo’s intent. A perfunctory nod to the economics of globalisation and perhaps a different future of how people move globally is followed by an opus on security. By co-opting trade and goods into the same discussion as people, he immediately renders immigration as only a partial component of how to think about the border.

Never before have we seen a speech like this given by the very person charged with bureaucratic oversight of immigration. What are we being protected from? What in our past highlights the need for immediate, visceral redefinition of what a border means in Australia? Call me skeptical but I do not see the justification for this approach. Like smashing an ant with a sledgehammer, we have come to imagine a world filled with drugs, crime and thugs who seek exclusively to harm us. The border envisaged this way can protect us.

Above all else, the overriding focus on control paints an implicit portrait where people are to be kept at bay. Since the post-war period in Australia, immigration has meant many things to many people. But at its core, the message has been one of attraction; an Australia where the new migrant, while perhaps not welcomed per se, is accepted and the act of migration encouraged. Ten pound Poms, assisted migrants and the opening up of our immigration policy to labour demand in the last two decades all scream “Please Come Here”.

Yet here we see a different focus, one where the process of control is placed above all else. In Mr Pezzullo’s world view, I see a reductive logic of this process. There is no space free from oversight or authority of the state. There is secrecy where required, which is often. There must be enforcement and constant success against innumerous enemies. This methodology will inevitably seep into our immigration framework, manifesting itself in regulation and policy that is ever suspicious and errs on the side of restriction, not openness. The themes of this speech are found elsewhere. In the Department’s new “Blueprint for Integration“, a similar definition of the border is promulgated:

The border is not a line on a map. Our focus is on the border in the sense of a complex continuum stretching ahead of and behind the border, including the physical border. It is a space that enables and controls the flow of people and the movement of goods through complex supply chains. We call this the border continuum.

I have thought seriously about the second sentence above and I have yet to understand what exactly it means. But I do know a border is a line on a map and theorising that it isn’t is done to achieve one purpose: to create an environment where security becomes pre-eminent. The ‘border continuum’ exists for this purpose and this alone.

To traditional liberals, to social progressives, to neo-conservatives, this language is anathema to how the world is. To a small subset of people who rely on a beefed up national security framework for political relevance, this is manna from heaven. Yet the most surprising aspect to this language is the silence we hear in response. The concept of immigration as a foundation of modern Australia, a nation-building foundation, is being lost to history and the road ahead is grim. Let me provide the most obvious example.

In the United States there was once an ethos about immigration. A myth of migrants building a new country, combining with a spirit connected to a pioneering past. Some pretend it lingers in the present day but in truth, it has been lost. “Give me your tired, your poor” was replaced with a fence along the Mexico-United States border. A progressive president attempts immigration reform only after having claimed the mantle of deporter-in-chief. The rhetoric and imagery of security when immigration is discussed is inescapable and the idea of America is worse for it. The failure to pass immigration reform or consider the benefits of change is due above all else to how security is the dominant point of discussion when one turns to immigration.

This is the future Mr. Pezzullo wants us to confront in Australia. It is one where the border is in the strictest sense both a symbol and a reality of the state asserting itself over the individual. Will this occur also in Australia? Will the language of borders and security transpose itself from the asylum debate into a migration debate? As a society, despite the ill will towards asylum seekers, in the main we have been able to distinguish between those fleeing persecution and those coming with an official stamp. This is a uniquely Australian ability and it has provided a blanket for multiculturalism and how we think about migration.

But I’m not sure how much longer that can survive if a new culture embedded in the rhetoric of security plants itself in public debate. If the first thing you think about when someone says immigration is the border, the game is already lost. I did not think we are at this point but perhaps I’m wrong and we’re already arrived.

Where are the alternative voices? Where is the business community? Immigration has given so much yet for many in industry, the response is passivity. Gladly accepting the benefits when times are good yet acquiescence when it is most important. A peek to the United States; the reaction of business as a collective was too little, too late. The narrative shifted as they basked in the economic sunshine of the 1990s and it has yet to recover. Where is the political outcry from (small l) liberals? Where is the counter narrative from social progressives? 18c showed the latent capacity that exists within the community for a powerful, positive message to counter a negative trajectory.

Perhaps most tellingly, I do not hear about this story in the media. This speech was not reported by a single outlet (that I can find) and the “blueprint for integration” document came and went with commentary focusing on public servants losing their jobs and without reference to what this means for immigration itself.

Finally, there was another part of Mr. Pezzullo’s speech which gave me pause:

“Tonight I would like to pose some questions about our future, while acknowledging and celebrating the achievements of our past. In 1945, Australia had a population of fewer than 7.5 million. We were predominantly of Anglo-Celtic heritage. In June 2015, just as we prepare to celebrate the 70th anniversary of the establishment of the Department, Australia will have a population of around 24 million – around three times as many as in 1945. More than 7 million people have migrated permanently to Australia since 1945, and almost 5 million have become Australian citizens since the status of ‘Australian Citizenship’ was established in 1949. We are a more diverse society. When we transition from our current state to the new Department next year, and commence on the path of the next phase of our journey, we should take a moment to reflect on what has been achieved since 1945. I contend that we will be able to declare the original mission of 1945 – to build the population base – to have been accomplished.”

“Mission accomplished”. The successful conclusion of a 70 year goal allows a new Department a new focus. Yet where this focus takes us as a country is unknown. It appears the emphasis on nation, on the benefit, on how immigration has given Australia so much will be relegated. Contrast this to the approach of a previous Secretary of the Department. Andrew Metcalfe gave the majority of his career to the bureaucracy of immigration. His speeches were infused with rhetoric also about what immigration meant to Australia but with a very different emphasis:

“Our job as a department is to help build our modern Australian nation – we do that through managing the movement of people in and out of our country, and through the settlement of people here for our inclusive, yet diverse society.”

“Debates about immigration policy are a feature of our Australian history and no doubt will feature predominantly in our future as we continue to define who we are as a nation. However, one thing that is an undeniable fact is that immigration has greatly enriched Australia. The Australia that we love and live in today is a very different place, a far stronger place built through great diversity, than the Australia of 1945 when the department was first established.”

While of course he also spoke of security and compliance, here you can see what an alternative vision looks like. Instead of drawing from Kissinger, Mr. Metcalfe found solace in the words of Teddy Roosevelt (see final paragraph). The difference could not be more stark.

I do not share Mr. Pezzullo’s worldview. I believe it is damaging to how we see Australia as a nation and what immigration means. Reducing immigration to something managed by a border – “not a line on a map” but a giant fence between us and everybody else – renders priority to notions of control, enforcement and security. It ignores the people who make immigration what it is and with it, ignores social, cultural and economic imperatives that make Australia what it is today. This is a pathway towards a dangerous future.

The Chinese-Oz FTA and Australian immigration policy

To be honest, I thought there would be more of an uproar about the Abbott’s decision to include migration in the Chinese-Australian FTA. Instead, mostly silence. The Australian chipped in with this effort from Ewin Hannan. Unfortunately all the article does is underscore just how poorly most of the media understand non-asylum immigration policy in Australia.

From what I can tell, there are two things to note about the Chinese-Oz FTA and migration.

An “Investor Facilitation Arrangement” (IFAs) has been created for Chinese organisations who have a capital investment of more than $150m. The IFA will create a formal contract between the company and the government to modify the standard conditions of the 457 visa program.

An important point to begin with is that this process already exists in migration law. Companies can negotiate “labour agreements” which are a contract between an organisation and the government using 457 visas. A labour agreement typically allows two exemptions; the hiring of ‘semi-skilled’ workers and a small loosening of English language standards. These contracts take years to negotiate and are spurned by most employers as not worth the effort. From memory, there are only 150-200 of these contracts in the entire labour market.

The IFA process introduced under the FTA is basically a streamlining of this process for Chinese companies with a capital investment over $150m. From the government’s public comments, there will be no exemptions on salary requirements currently mandated under 457 visa regulations.

What was announced was the default option when you do not want to introduce legislation because the politics are too hard: put everything into policy and contracts. To be honest, I’d be surprised if there were more than a handful of these contracts in place before the next election. They might end up covering anywhere between 1,000 and 5,000 workers who would not have been able to come to Australia within the standard system.

To answer Mr. Hannan’s question about the lack of detail from the government, this is simply because nothing significant is going to happen until a company requests a contract and negotiations begin. Sure, they could have done a better job explaining what was happening but I don’t believe they are actively hiding anything either.

The second subject of note is the introduction of a Working Holiday Maker agreement Chinese citizens. What I found interesting is if you look at the December 2013 report from the Working Holiday Maker report (page 4) you will notice China is not on the list of countries where negotiation is underway. Given the Chinese-Oz FTA has been in negotiation for 10+ years, this might be a sign that Working Holiday Makers were included very late in the piece. Perhaps the government stood firm on other types of immigration and this was used as a compromise? Who knows.

There will be 5000 places per year for young, educated Chinese people to spend one or two years in Australia “backpacking”. While Working Holiday Makers can tell employers to get nicked and remain in the country, they are excluded from addition protections found in the Migration Act for 457 visa holders. Instead they fall completely under the Fair Work Act along with everyone else. My gut feeling says the majority of exploitation of temporary migrant workers likely occurs in the WHM program. It’s impossible to generate even an educated guess on the magnitude of this issue given the complete lack of information on the program. The lack of capacity to enforce regulation in marginal parts of the labour market is the main reason exploitation is likely to occur. Both the ALP and the Coalition fail on this score over the past decade. When you only have a handful of inspectors and compliance officers trying to enforce complicated regulation on a program of over 100,000 people and 30,000 businesses, of course you’ll see mistreatment and abuse.

China was always going to have a capped number given their population size. However it is interesting to compare the maximum possible number of Chinese working holiday makers with other countries whose citizens use the program. Here is the number of visa holders from various countries who were in Australia on 31 December 2013:

United Kingdom 30880
Taiwan 28572
South Korea 23059
Germany 19278
France 16680
Italy 11780
Ireland 10104
Hong Kong 9331

I wonder what Chinese policy-makers think of the 5000 hard cap given there are nearly double that number of Hong Kong migrants in the program at the moment? Given there were a total of 178,982 working holiday makers in Australia on 31 December 2013, another 5000 is not going to make much of a dent in terms of actual labour market outcomes.

On the one hand, it was good to see there wasn’t a massive stink about this. Migration should be included in trade agreements (although it would be better at a regional level). Placing some some solid policy infrastructure around migration policy can help countries muddle through expanding their openness. Australia has a role to play in the region here as the movement of people is only going to increase a policy priority in the coming decades. What happens when China starts opening up a skilled migration program because of their demographic transition? It will be better for Australia to be inside the tent when that day comes and these are the baby steps necessary towards that point in time.

This doesn’t mean everything is hunky dory in the 457 visa program. The most pressing issue to be concerned about – which I haven’t seen raised once in national media – is the freezing of the Temporary Skilled Migration Income Threshold at $53,900 for up to two years.

By refusing to index the salary floor for temporary migrants, the government is squeezing real incomes for migrant workers. Further, they are creating an incentive to hire overseas workers instead of Australians given ‘market wages’ for migrants are not rising in line with the labour market. This has horrible medium- and long-term consequences yet the mechanics of these processes are so poorly known we do not hear about it.


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