Tim Colebatch schools Peter Martin on immigration

By Leith van Onselen

Former economics editor with The Age, Tim Colebatch, yesterday published a brilliant article supporting the federal government’s crackdown on temporary work visas, arguing that Australia’s current mass immigration program is destroying employment prospects for the incumbent population. From Inside Story:

Between 2008 and 2016, in net terms, the Australian labour market expanded by 474,000 full-time jobs. But only 74,000 of them went to people born in Australia. That’s fewer than one in six.

That’s not because the Australian-born are a small minority. Two-thirds of all working-age residents of this country were born here. Yet roughly three-quarters of the growth in full-time jobs since the global financial crisis has gone to recent migrants…

It is a stunning demonstration of why the Turnbull government had no choice yesterday but to flag the replacement of the 457 visa program, under which many of those migrants have arrived here…

Some of those workers arrived here originally as students, but found ways to stay on in Australia, whether they are working as doctors and engineers or as taxi drivers, on late-night shifts at service stations or as kitchen hands in Indian restaurants. But many came here on 457 visas, brought out by employers who have been allowed to run their own immigration programs, with relatively little oversight by government…

Many on the left and centre-left seem to be uncomfortable with the idea that there can be such a thing as too much immigration.

I am unambiguously pro-immigration, but if the level and nature of the immigration are not working for us, I suggest we turn down the tap…

Despite the clear downturn in the labour market since 2012, the federal government has maintained a target of 190,000 permanent migrants a year, two-thirds of them skilled migrants. We have more than half a million foreign students who are free to work, and at any time there are tens of thousands of visitors here on working holidays…

Case after case has been exposed in which workers were mistreated, were not paid the wages required by law, or were employed in different jobs from those stated. There was minimal supervision by government, and it was all too easy for workers to convert their visa into permanent residency.

Bureau figures show that in the decade to June 2015, 371,000 “temporary workers,” plus their families, arrived here on 457 visas, sponsored by business, ostensibly to fill jobs that could not be filled by Australians. Yet over that decade, only 145,000 of those on 457 visas left Australia to return home. Roughly 60 per cent of them, 226,000, stayed in Australia, mostly swapping their temporary visa for permanent residency…

The table below, contrasting the experiences of recent migrants and the Australian-born, highlights our predicament. By making it so easy for employers to hire their skilled workforce overseas rather than face the expense of training Australians, we have closed off opportunities for young Australians to move up the ladder and gain the skills and experience that will allow them a good future.

Our future depends on Australians developing the skills to maintain a high-income, technologically advanced country in an increasingly competitive world. We made a mistake in following the US model of importing skilled labour and leaving the young in the rustbelt to scrape by as best they can. There are many reasons why our migrant workers are not generating enough demand to replace the jobs they have taken: what is clear is that our current system is not working for those who were born and raised here.

Fewer than one-in-six new full-time jobs, in net terms, now go to Australian-born workers. It’s not anti-migrant, let alone racist, to say that that is an outrageous failure of policy. May yesterday’s announcement be the first step towards putting it right.

Brilliantly said. Make sure that you read the full article, which contains more excellent observations and arguments.

Now enter Tim Colebatch’s erstwhile Fairfax colleague, Peter Martin, who also penned an article yesterday entitled Migration does Australia good, 457 visas all the more so. Regular readers will know that Martin is a one-eyed supporter of mass immigration and a ‘Big Australia’ (see here and here), so you won’t be surprised that Martin argues the opposite case:

At the peak of the mining boom we were importing 34,500 temporary workers every three months. Without them we wouldn’t have been able to expand anything like as many mines simultaneously.

Only some of the new workers were employed in mines. But that doesn’t mean the mining boom didn’t create the need for them…

During boom times, temporary migrants make things work.

When times are bad, fewer come. Just like that. What’s not to like?

In recent times we haven’t been granting that many 457 visas, because we haven’t needed to. And skilled migrants have been less keen to come…

Australians worried about population growth would be wise to examine total growth rather than the relatively tiny number of temporary workers on 457 visas.

At the peak of the first mining boom, population growth reached 2.2 per cent as immigrants on all sorts of visas made a beeline for Australia, and as Australians who would have otherwise left stayed at home. It’s now a less-impressive 1.4 per cent as foreigners have become less keen to move and Australians more keen to leave.

So reliable is net migration as a barometer of economic health that the chief economist in the Department of Industry uses it as shorthand for how well things are going…

Right now they’re not going that well. The populations of Western Australia, South Australia and Tasmania are barely growing. NSW and Queensland are doing little better. But Victoria is racing ahead at a rate not seen for decades. In just the past year Victoria has gained an extra 127,500 residents. It has housed four out of every 10 new Australians.

Despite the fears of some, it hasn’t cost Victoria jobs. Employment in Victoria is growing faster than in any other state. And not only employment – job vacancies are growing more quickly as well. The boom in jobs is both encouraging migrants and other Australians to move to Victoria (especially Melbourne) and creating (on the face of it) as many jobs as it fills.

It won’t last, just as Western Australia’s boom didn’t last. But when it falters migration to Victoria will slow. That’s how migration works.

Peter Martin continues to argue the myth that Australia’s migrant intake is controlled by economic conditions, rather policy (he made exactly the same argument earlier in the month). This is dead wrong: the key driver is the permanent migrant intake, which is set by federal government policy:

As shown above, this permanent migrant intake is set at around 200,000 currently (including the humanitarian intake), having more than doubled since the turn of the century.

Sure, while overall net overseas migration (NOM) bounces around year to year (as temporary migrants come and go), the fact remains that Australia’s immigration intake is set at a very high level because permanent migration is set so high – something Peter Martin completely ignores.

Moreover, the federal government’s current plan is to keep the permanent migrant intake high indefinitely, thus driving continued strong projected growth of the Australian population to 40 million mid-century:

The fact remains that Australia’s immigration intake – and indeed how big Australia becomes – is a policy choice, not set by economic conditions. If you don’t believe me, read the PC’s recent Migration Intake into Australia report:

“FINDING 3.1: With low and stable rates of natural population growth, decisions about the size of the permanent and temporary immigration intake amount to a de facto population policy”.

The PC notes in its report that it if Australia chooses to persist with current immigration settings, its population will hit around 40 million mid-century, whereas if it were to cut NOM to zero, it would grow to only 27 million – a difference of at least 13 million:

Peter Martin’s claim about migrants flooding to Victoria “hasn’t cost Victoria jobs” is also misleading. Since the onset of the Global Financial Crisis (GFC) in 2008, Victoria has added an incredible 814,000 people (a 15% increase) – mostly via immigration:

And yet Victoria’s unemployment rate has remained locked above the national average throughout almost the entire period, with no improvement recorded:

Victoria’s underemployment has also remained locked above the national average:

Worse, since the GFC, Victorian per capita Gross State Product has barely increased, rising by a pathetic 0.8%:

And Victoria has experienced the lowest increase in per capita GSP in the nation since the GFC:

Victoria also has the lowest per capita gross disposable income on the mainland, only beating out lowly Tasmania:

So what has been happening in Victoria is that the economic pie has grown due to rampant population growth, but everyone’s slice of that pie has remained stagnant! Seriously, what’s the point of maintaining a mass immigration program if nearly all the jobs being created are taken by migrants, and incumbent residents are made no better off?

This is particularly important given the huge negative externalities associated with mass immigration, which are not captured in the headline statistics, including:

• Creating infrastructure bottlenecks, meaning incumbent residents spend more time stuck in traffic, waiting for a hospital spot, packed like sardines on a train, or jammed into an overcrowded classroom;
• Raising the cost (and reducing the quality) of housing, as young Australians are forced to pay more for lower quality housing (e.g. a highrise shoe box or a postage stamp-sized lot on the fringe);
• Diluting Australia’s fixed endowment of mineral resources across more people, meaning Australia must sell-off its resources faster to maintain a constant standard of living (other things equal);
• Blowing-out Australia’s trade and current account deficits as the immigrants flooding Melbourne and Sydney do not materially raise Australia’s exports (since most of these come from commodities and agriculture) while significantly increasing imports (as they purchase imported TVs, cars and the like).
• Environmental degradation, as Australia’s rapidly growing population puts increasing strains on Australia’s natural environment.

Once again, Peter Martin has completely ignored the facts and the significant costs associated with maintaining Australia’s mass immigration program in order to spruik his left-wing open borders view.

In its current form, Australia’s immigration program is guaranteed to lower incumbent residents’ living standards. So why not dial it back to the sensible and sustainable levels that existed prior to the turn of the century when immigration actually worked well for Australia?

[email protected]