Quarterly Essay Correspondence

Earlier this year some correspondence of mine was published in response to George Megalogenis’ Quarterly Essay. Today I discovered this was publicly available. The full text is below. I’d encourage you to have a read of George’s essay. I thought it was an excellent contribution.

“Underlying much of George Megalogenis’s excellent Quarterly Essay is the subject of immigration and population. Most people are acutely aware that Australia has a growing population. As Megalogenis explains, we are experiencing increasing congestion, and his section on housing reaffirms that something is askew: supply has failed to keep up with demand. Nation-building, with foundations of social cohesion and economic prosperity, remains a work in progress when the papers can thunder about how “foreigners” buy all the houses at Saturday auctions (note: Australians can have brown skin).

But fewer people understand that a massive shift in immigration policy since the mid-1990s has been the dominant factor behind population growth. As the rate of births and deaths is relatively stable, changes in Australia’s population trends are driven by migration. Megalogenis doesn’t explicitly say why our population growth kicked up a notch over the past two decades while the populations of many other rich countries stagnated. This is understandable – given the need for brevity – yet unfortunate, as he is one of a handful of people who could explain this neatly.

Nearly every informed commentator could write a volume on how the deregulation of trade and financial policy since the 1980s has fundamentally changed Australia. Yet the effect of immigration on our labour markets and urban centres remains poorly understood, despite having a deep impact on the day-to-day lives of millions of people.

The key shift is government control. From the post-war era of mass migration until about the early 1990s, the federal government controlled how many people came to Australia. Every year, a number was chosen, broadly based on the economic cycle. Low unemployment meant more migrants, while in times of recession it was made more difficult to migrate to Australia. Today, governments can only manage the flow of people to and from Australia. They cannot control the total number of migrants, because of two policy changes: the introduction of temporary migration, and the new priority given to economic over social and familial considerations.

Three of the largest groups of new migrants – international students, temporary skilled workers (457 visa holders) and backpackers (under the working holiday program) – are each “temporary,” at least in name. Importantly, the government of the day does not determine the size of each of these categories. Instead, a combination of factors – such as labour demand, the exchange rate and universities, among others – affects migration to and from Australia. These uncapped classes of visas rise and fall from year to year.

Governments have been somewhat disingenuous about this. Tight border protection is trumpeted, yet it affects only a tiny minority of those seeking to come to Australia. Consultation between government and the electorate is moot, as the government only sets the number of permanent resident visas granted each year. Decades of growth, coupled with non-government bodies driving immigration policy, have led to a “new normal.” Employers sponsor overseas workers, universities accept growing numbers of international students, and backpackers are pushed and pulled by the relative economic forces of different countries. Government has stepped back and today oversees this process at arm’s length.

While some people are aware of this new normal, far too few consider the effect of immigration on employment, housing, infrastructure, urban policy and innovation. Even the Treasury, with its oft-repeated focus on the “three Ps” (population, participation and productivity) in such documents as the Intergenerational Reports, has largely failed to acknowledge how important immigration has been over the past fifteen years.

Why does this lack of understanding matter?

Right now, countries we share an affinity with, the United States and the United Kingdom, show what can occur if we ignore deep-rooted economic concerns and allow immigrants to become scapegoats. Donald Trump’s proposed wall on the Mexican border and his rejection of Muslims are illustrations of this. It’s not that his supporters are stupid, it’s that they want a decent job and to feel safe. A wonky academic paper showing Mexican immigration has no negative effects on the average high-school drop-out cannot compete with the emotional battering experienced by those who have been left behind by the modern economy.

In a similar, but distinctly British, manner, the United Kingdom has contemplated leaving the European Union predominantly because migrant-baiting has become a quasi-national sport. Migration is the key issue driving the UK away from one of the most successful geopolitical projects in the history of the West. Forget Margaret Thatcher, it was the cheap Romanian brickie that did it, or so goes the argument.

We have yet to experience this ugly face of anti-migration, anti-globalisation politics fully in Australia. We should not be held hostage to these positions, given that migration has a largely benign impact on our economy if appropriate responses are taken with regard to infrastructure, public services and crowded cities. At the margins, migration to Australia also reduces inequality and builds real links with our region.

To date, our political system has removed the possibility of a pedestal or megaphone. The Reclaim Australia movement lacks strong foundations, and formal parties like Australia First fail to penetrate the mainstream. Yet they linger on the edges of our society. Those who have been left behind, shut out and not given a hand-up will be the first to flock to such groups when the economy stops growing, as people give up on aspiration and opportunity.

Informed discussion and considered responses from government about our population and immigration policies, combined with continued prosperity, are the only serious bulwarks against this discourse infecting Australian politics. Here, Megalogenis is right on the mark. Government intervention – harnessing the immigration system that has emerged and responding to the structural change it has caused – is the best tool Australia has to remain a cohesive society that takes pride in its diversity.”

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2 thoughts on “Quarterly Essay Correspondence

  1. I love the way you exit your lede graph. Good work, but I assume it was published pre-election, pre-One Nation?

    Dinner at the Polish Club next Wed?

    Sent from my iPhone

    >

  2. Yeah published pre election. I think most of it holds. One Nation isn’t comparable to UKIP or Trump, at least not yet (might change with WA and QLD state elections). Dinner would be great – see you there.

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