Demography and Sustainability - Australian Fabians
19 March, 2022

Demography and Sustainability

- by Jane O'Sullivan

There’s nothing like a crisis for shaking new understandings and opportunities to the surface. COVid-19 has taken a terrible toll and the scars will take time to heal, but let’s hang on to the positive changes it has offered us.

One of the most profound impacts of the pandemic has been on migration to Australia. For the first time since the diggers left en-masse for World War II, Australia had more emigrants than immigrants in the year to March 2021. Many temporary residents had to leave when their jobs dried up. It was a despicable act of callousness not to include them in income support payments, but they were not the only ones arbitrarily excluded. On the other side of the ledger, hundreds of thousands of Australians living overseas returned to stay – at least for now.

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This has given the labour market a huge shake-up. Simultaneously, the profile of jobseekers and the profile of jobs on offer have both shifted abruptly. It’s no wonder that the two don’t match up precisely. Business lobbies are clamouring for access to migrants to fill skills shortages, even while unemployment remains high. But given time, this gap would close. TAFE enrolments have ballooned by 35% in the past year, showing Australians are willing to retrain. Employers should do their part too, not demand migrants as a first resort.

One of the most fascinating job markets to watch has been horticultural workers. In spring 2020, the industry was warning of crops being left to rot in the fields. But at the same time, Australians were being turned away from those jobs and reports of abysmally low pay abounded. By December, growers were bypassing labour hire firms, offering better terms and getting their crops in with a mix of Australian and immigrant workers. Consumers detected no change in the price or availability of fruit and veggies.

The hot button issue is, what should Australia’s immigration program look like after border restrictions are lifted? The pandemic has provided a unique opportunity to reset the program. A number of economists, including Reserve Bank Governor Philip Lowe, put the view that Australia’s extraordinarily high levels of immigration over the decade preceding the pandemic contributed to wage stagnation. According to him, border closures helped to reduce unemployment more rapidly, but employers won’t raise wages if they think the floodgates will imminently reopen. Ross Garnaut, in his book Reset: Restoring Australia After the Pandemic Recession, proposed halving net immigration for similar reasons.

Business lobbies are working hard to head off any such retreat. The new premier of New South Wales, Dominic Perrottet, has weighed in in favour of doubling pre-pandemic inflows for at least a few years, to make up for lost ground. Such are the chameleons of politics: in 2018, then Treasurer Perrottet said recent immigration was “extraordinarily high” and “excessively rapid,” arguing that, “we can’t pretend that high immigration comes without a cost, and we believe growth should not impose an unfair burden on those already here.” He sided with many of the voices of moderation, explaining that “excessively rapid growth puts downward pressure on wages and upward pressure on housing prices, both of which have sorely stung workers and aspiring homeowners.” Has he had a Damascene conversion, or did he incur some debts to the growth lobby in his bid for premiership?

If comments on newspaper articles are anything to go by, Australians aren’t buying it. The Daily Telegraph’s James Morrow captured the public sentiment when he said that, “trying to kickstart the economy with another immigration binge when there’s not enough work or places to live is the sort of folly that can only be dreamt up by people who see Australia not as a nation but a hotel.” The Canberra Times’ columnist Crispin Hull echoed many others saying that “we do not have a skills shortage in Australia. We have a training shortage.” Left wing commentators, from Van Badham to Peter Lewis, have joined the clamour for better pay rather than cheap imported labour.

Migration advocates often present the debate as a binary choice: you’re either for migration, implying an open-hearted outlook embracing Australia’s engagement with the world, or you’re against it, implying xenophobic nationalist conservatism yearning for a whiter past. But numbers matter: it’s not about the ethnicity of Australia’s population but its growth rate.

When asked, Australians overwhelmingly prefer Australia’s population not to grow bigger. Consistently, around 65-70% of people report this preference, including a majority of voters for each of the major parties and the Greens. Depending on the survey and how it primes the issue, responses to questions on immigration are much more varied. Australians generally support the idea of multiculturalism, want a generous refugee program and are often accepting of arguments that immigration (unquantified) benefits our economy. Many aren’t aware that the recent scale of immigration conflicts with their preference for a stable population, believing it only makes up for our low birth rate.

Labor has long held the line that high immigration serves Australia well, and that any contrary view is merely manifesting racism. So it was with some boldness that Home Affairs Shadow Minister, Kristina Keneally broached the subject in May 2020, suggesting that Australia might be wise to limit temporary migration after the COVid-19 lockdown, to avoid restoring exploitative work practices and to “make sure that Australians get a fair go and a first go at jobs.” The business lobby didn’t need to cut her down – they left that to the Left wing anti-racism vigilantes, who came out all guns blazing claiming it is “oxymoronic” to praise multiculturalism while expressing a view to reduce immigration numbers, and that it is inappropriate “for an immigrant like Kristina Keneally to lecture Australians about the need to restrict immigration.” The irony of the latter accusation was lost on the media: should an immigrant never be considered Australian, and should they not voice political views? Never mind that we elected her to do just that.

Labor quickly back-peddled from any allusion to the scale of immigration or population growth, merely blaming too much temporary migration for low-wage work undercutting local jobseekers. Labor seems to be playing both sides of the fence here, attempting to push back against the Coalition’s aggressively pro-growth stance without retracting its own support for mass immigration. Are we to believe that merely giving migrant workers more direct access to permanent residency will solve all the issues resulting from Australia’s rapid expansion?

It is worth taking a step back from the vitriolic maelstrom of Australia’s immigration debate, and ask what it is we want. How does immigration fit into our big picture goals?

I think most of us would agree that we want sustainable prosperity. That means achieving a good standard of living for everyone: ending poverty, not making billionaires richer. And we don’t want to sacrifice our grandchildren’s prospects in the pursuit of short term wealth. Many of us also believe that non-human life forms have value and validity of their own, and want a future in which biodiversity can thrive, regardless of whether particular species are seen as useful to us. But even if that is a step too far for you, a healthy self-interest combined with a sufficiently long time horizon demands that we look after natural systems. This perspective mirrors that of the 1991 parliamentary Population Issues Committee, which concluded that the proper purpose of population policy must be the enhancement of wellbeing for Australia, achieved through four goals: economic progress, ecological integrity, social justice and responsible international involvement.

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We’re kidding ourselves if we think that we can achieve sustainable prosperity while expanding both our population and our use of natural resources. Globally, human impacts far exceed the levels that planetary systems can cope with. The Global Footprint Network says that we’re using 1.7 planets’ worth of resources per year, relying on millions of years of stored biomass in the form of fossil fuels. But that calculation is only part of the story. We could potentially swap out fossil fuels for renewable energy, but we can’t so easily replace the aquifers we’re draining and the glaciers we’re melting and the soils we’re mining of nutrients, in order to keep us all fed and watered. The blind pursuit of neoliberal growth economics has led us into a trap, and we urgently need to retreat before its ecological jaws close on us. Economic degrowth is emerging as a serious area of study, which should be brought into the mainstream. Within it, ending and reversing population growth is an essential element.

Somehow we think that ending population growth globally doesn’t need to apply to us here in Australia. After all, migration just shifts where people are, without increasing the total number of snouts at the trough. But our population policies affect those of other countries. Many of them still have high birth rates – particularly in Africa but also our near neighbours like Papua New Guinea, and their population growth is a debilitating barrier to development. If Australia insists, no matter how misguidedly, that rapid population growth is the bedrock of our economic success, it’s hard to generate political will for providing the family planning services women in those countries lack, let alone advocating for smaller families. Some countries, like Iran and Turkey, have already moved to restrict women’s access to birth control, through unfounded fears of population ageing. By slowing their population stabilisation, we deepen poverty and heighten risks of famine and conflict for many more people than our immigration program can rescue from harm. It also doesn’t help if we entice away most of the skilled people they train, leaving the local population underserved.

Ending global population growth requires that individual countries embrace their own population peak and decline. There are many good reasons for doing this, apart from the long term feasibility of modern civilisation. Even in the short term, the benefits are enormous. Countries with near constant or declining populations have lower unemployment, affordable housing and generally improving environmental conditions. It’s much easier for them to achieve rapid reductions in greenhouse gases, when their energy needs aren’t growing and they don’t need masses of heavy construction. The ageing of their population didn’t mean that jobs went unfilled, it meant more working age people participated in the workforce. Large injections of young people can keep the proportion of retirees a little lower in an ever-growing Ponzi scheme, but providing enough infrastructure for the additional people is so costly (more than $100,000 per person) that it cancels out any saving on pensions and aged care. That’s before factoring in the suppression of wages and proliferation of part time, insecure work, meaning lower tax returns per household. As Macrobusiness economist Leith van Onselen quipped, “if the federal government was required to internalise the cost of immigration by paying the states $100,000 per permanent migrant that settles in their jurisdiction, so that the states can adequately fund the extra infrastructure and services required, then Treasury would no longer tout the ‘fiscal benefits’ of immigration.”

What would a sustainable population policy look like?

For Australia’s population to stabilise, we need no more net immigration than is needed to top up each generation. How much that is depends on Australia’s fertility rate. If each couple averaged two children, there would be no need to top up and immigration should equal emigration. If fertility stays around 1.7 children per couple, a net migration rate of 50–60,000 per year would keep the numbers roughly stable, once our growth momentum has played out. If we let fertility fall to Europe’s average of 1.5, sustainable net migration would be around 80,000 per year.

In contrast, we have averaged around 240,000 per year over a dozen years prior to the pandemic, driving population growth at around 1.6% per year. At that rate, we were on track for nearly 40 million in 2050 and 90 million by 2100: far more people than Australian agriculture can feed, even before factoring in climate change. But before 2005, 50–80,000 per year was considered normal. The 1995 Australian Academy of Science report Population 2040: Australia's Choice concluded that Australia was on track to stabilise with 23-25 million, and pushing the population higher was not in the interests of Australians.

There is little argument that migration usually benefits migrants, but it is better for migrants when its scale is modest. Then people can be absorbed into the workforce without displacing locals or suppressing wages, and the pressure for new housing doesn’t force people into high-rise apartments or remote, underserviced suburbs. In any case, we can’t satisfy the demand from potential migrants. According to Gallup polls, there are over 750 million people who would like to migrate. More than 25 million of them cited Australia as their first preference, but many of the others would opt for Australia if our door was the one widest open. Whether you advocate Australia’s immigration quota to be 50,000 or 500,000 per year, it is barely a drop in the bucket. Better to focus on the quality of experience we can give to migrants than pretend that a bigger number is pro-migrant and a smaller number anti-migrant.

Refugees are one group that suffers badly from a crowded labour market. They often lack the language proficiency and skill training to compete for jobs. Australia currently offers 13,750 humanitarian visas per year, making us the second most generous intake in the world, on a per capita basis, behind Canada. But it is a tiny fraction of our immigration program, and we could do more. Instead of favouring the people who most need a new place to live, we import hundreds of thousands of non-refugees per year, ostensibly for the benefit of our economy.

The problem is that those economic promises have not been realised. After 15 years of super-charged migration supposedly filling critical skills shortages, we’re claiming no fewer skills shortages. Meanwhile, entry level wages have gone backward, youth under employment has gone through the roof, Australian university graduates are not finding jobs that use their skills and young couples are taking on million dollar mortgages. Is this all so that we can afford the pensions? If so, it is a gross act of intergenerational theft.

Let’s be clear that Australia does not have structural skills shortages. That list of skills needed is drawn up just so that immigration can match the number that Treasury wants, to make gdP growth look good. That, and to placate the vice chancellors who know overseas students won’t come if they don’t believe they have a good chance of staying. Indian engineers are flooding into the country on the promise that their skills are needed, only to end up delivering pizzas.

A permanent migration quota of 50,000 might comprise, for example, 20,000 refugees, 20,000 skilled (including their families) and 10,000 family reunion. This would be ample to meet real needs for specialist skills, and would ensure Australia remains among the most multicultural countries in the world. All skilled migrants should be initially employer-sponsored and on temporary visas. Self-sponsored skilled migrants have a poor record of finding work in their skill area, and regionally-sponsored migrants typically don’t settle in the region that sponsored them. Employer-sponsored migrants have a job to go to, but we need stronger labour market testing requirements to ensure that job can’t be filled locally. The Temporary Skilled Migration Income Threshold (TSMiT) is currently below Australia’s average wage, which includes the unskilled. It should be raised to at least 75 per cent of weekly full time earnings to ensure temporary migrants are not used to undercut Australian skilled workers.

Students and backpackers should be able to fill any jobs as temporary workers, but would need to earn employer sponsorship to apply for permanent residence. The Pacific guest worker program is also compatible with a sustainable population policy, but the far larger scope offered under the new agricultural visa for Asian workers is a recipe for entrenched exploitation and massive low skilled permanent migration. Already applying to meatworks, fisheries and forestry, it will inevitably spread to other sectors like construction and hospitality, creating a new underclass.

While labour markets can change quickly, house prices ratchet upward in a way that is very difficult to reverse. We can’t blame housing inflation entirely on population growth: it was capital gains tax concessions that kicked it off, and as we’ve seen over the past year, the government can force house prices up with low interest rates and first home buyer grants if that’s what it wants to do. And clearly that is what it wants to do, more interested in appeasing the property developers who donate to election funds than relieving the stress on young homemakers. But high immigration has been essential to sustain the property boom to reach such painful heights. To cool it off, we need to remove the tax advantages enjoyed by investors over home buyers, as well as slowing the influx of people.

Labor’s focus on whether migration is temporary or permanent, rather than the conditions that allow exploitation, is misguided. Giving low skilled migrants permanency will not make farms pay them properly, it will mean they won’t work on farms. The only ethical solution for horticultural work is to ensure that workers don’t get less than the minimum wage, using piece rates only as an added bonus for fast workers. Before we’ve tried this, we can’t say Australians won’t do the work. The labour hire model has become part of a vicious cycle of exploitation and dependence on migrants and should be wound back. It only exists to lower wages and to circumvent public service staffing caps, another absurd concession to ideology.

It will take a long and detailed policy consultation to reset Australia’s complex visa system, to ensure maximum fairness and equitable transitions from current settings. But the overarching imperative, that Australia’s immigration must allow long-term ecological sustainability, should not be compromised. Not for the business lobby’s self-serving pleadings, nor to appease false accusations of racism. The pandemic’s migration hiatus provides an ideal moment to abandon big Australia and embrace sustainable Australia. Let’s not throw this opportunity away.

Professor Davies on Global Rivers in Crisis on the Australian Fabians YouTube Channel. It's free to subscribe to our YouTube Channel here, where there are over 130 videos on important progressive political topics.

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