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.


2 thoughts on “Government control and Australia’s population

  1. Pingback: A comment on Tim Colebatch’s Inside Story article | Value for Money

  2. Pingback: A nation beyond? Reframing migration, settlement and engagement | Value for Money

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