Features Australia

Big Australia, meet Covid-19

Time to reassess our fondness for mass immigration

11 April 2020

9:00 AM

11 April 2020

9:00 AM

Despite the radical new pandemic world we’re all facing, it’s still hard for a lot of people to jump off their old hobby horses. Obviously, climate change activists, with their careers tied to the cause, are trying to find new angles to remain relevant. Another hobby horse still being flogged is mass immigration. Big Australia boosters are already spruiking a migrant-led rebuilding and recovery post-coronavirus. Demographer Bernard Salt says Australia will be in demand as a post-pandemic migration ‘safe haven’ as it was after the Spanish flu.

But the virus crisis has actually exposed how large-scale immigration left Australians in a weakened financial and health position and more vulnerable to this virus shock. With Fortress Australia shutting us off from the world, mass immigration has stopped for now. It should be a permanent casualty of the pandemic.

Our population has surged from 18 to 25 million since the 1990s, fuelled by immigration, and has been growing at five times the average rate of more developed countries. Through immigration, we’ve been adding the equivalent of a Canberra-sized city each year. The Productivity Commission estimates Australia’s population will increase to 40 million by 2060. As Salt himself says our immigration program is ‘globally unparalleled’. ‘No other equivalent nation comes close to Australia’s generosity in absorbing migrants.’

Douglas Murray laments the ‘strange death of Europe’, but here we’ve witnessed the strange death of Australia. Some 30 per cent of the Australian population – 7.5 million people – were born overseas (50 per cent are now first or second generation migrants); almost 40 per cent in Sydney, and 36 per cent in Melbourne. That’s more than twice the 15 per cent in the US and 14 per cent in the UK.

Both Coalition and Labor governments have run high immigration programs. Morrison assuaged concerns by announcing a slight 30,000 cut to the annual permanent migration intake, limiting it to 160,000. But Morrison only capped permanent residency and not temporary migration and this reduction would not have meaningfully altered the trajectory of Australia’s population growth.

It has been odd to see a ‘conservative’ Coalition, particularly, engage in one of the greatest social re-engineerings in our nation’s history. But the scale of our migration intake has largely been driven by greed and fear. Big business wanted mass immigration to boost demand and keep wages low. Politicians have used immigration to keep GDP growing and avoid a politically embarrassing recession; a recession that would have helped trigger the necessary reforms to make us more robust to withstand future shocks.

Immigration does create vibrancy in the community and adds younger and skilled workers. But before the coronavirus crisis, we were slowly beginning to realise that mass immigration has infected almost every part of the economy for the worse, saddling Australia with low wages growth, staggering house prices and heavy debt loads. Research findings on the impact of mass immigration on local workers are mixed, but the research has been largely focused on boom times. It seems inconceivable that mass immigration hasn’t contributed to Australia’s anaemic wages growth, particularly for unskilled and low-wage workers, and especially when economic growth is lower. Economists are also finally recognising big immigration has worsened our shocking housing affordability. Demand for dwellings has far outstripped supply, pushing up prices. A recent study found that from 2006 to 2016, a one per cent inflow of immigrants to a postcode raised prices by around 0.9 per cent, per year.

There are benefits of strong house prices, but many negatives. Young Australians are locked out of the market; and many home buyers are forced to load up with massive mortgages, which has contributed to Australia being the second-most indebted country in the world. That is coming home to roost now, with many losing their jobs but carrying mortgages they can’t service without an income. A Productivity Commission report into migration, released in 2016, found other significant downsides to mass migration, including discouragement of training, environmental damage and congestion.

The virus crisis has particularly highlighted our overreliance on temporary workers, including backpackers and international students. Some of the worst-affected by the economic shutdown are the 2.17 million temporary visa holders in Australia. They are finding out a temporary visa means temporary. Many worked in hospitality, service and retail jobs that were quickly shed. Most can’t find new jobs but are ineligible for government support. Despite being ‘welcomed’ here for their cheap labour and billions in education fees, if they can’t support themselves Scott Morrison now wants them to pack their bags and head home.

But most concerning is that our mass immigration program has put Australians at risk because our health system hasn’t been scaled up to adequately service our bigger population. Australia now has just 3.8 hospital beds for every 1,000 Australians. That’s around half that of the 1980s and well below the OECD average of 4.7; Japan and Korea have triple the number of hospital beds per capita. In the major cities – where most immigrants have settled – hospital beds per 1,000 are even lower, at just 2.4.

The frontline in the fight to save lives are intensive care beds. At the start of the crisis, we had just 2,200 intensive care beds in the entire country, or 8.9 per 100,000 people. Even Italy, whose health system is overwhelmed, had 12.5 beds per thousand. Only luck has saved us from a health catastrophe thus far, because having been forewarned by terrible scenes in the likes of Italy and Spain we’ve had time to create short-term ICU beds.

Eventually Fortress Australia will be dismantled as the coronavirus threat passes. It will be tempting for politicians to once again ramp up immigration in a redoubled effort to trigger top line economic growth. Immigration no doubt will play a role in the recovery; we will need ambitious entrepreneurial people to help restart and reinvigorate the economy.

But as Australians begin to rebuild their businesses, jobs, lives and health, they will be even more reluctant to have their tenuous incomes threatened by another tidal wave of arrivals, who will also be competing for scarce health services. Most polls already showed the majority of Australians believe immigration is too high. Politicians, big business and policy makers have taken advantage of the generosity of Australians to prop up their profits and growth numbers. But they have pushed us too far and need to give us a break and return immigration levels to more sustainable levels.

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