The Politics    Wednesday, February 21, 2018

Shrinking Australia

By Paddy Manning

Shrinking Australia


Tony Abbott lights the anti-immigration fuse

Good afternoon,

Only Tony Abbott could see Jim Molan’s anti-immigration sentiments and raise him one, without literally quitting the Liberal Party and joining One Nation.

Molan, the retired major general elected to the Senate after the Nationals’ Fiona Nash was deemed ineligible, had a political baptism of fire after he retweeted anti-Muslim videos posted by the far-right Britain First. In his first speech last week, he said he was “concerned that the level of legal migration now that we control our borders is in excess of the capacity of our cities to absorb, both culturally and in terms of infrastructure”.

When asked about those comments the next morning, home affairs minister Peter Dutton told 2GB’s Ray Hadley that concerns about groaning infrastructure and overcrowded hospitals and the like were “perfectly legitimate”, and that the Coalition had already cut permanent migration by a third from 300,000 a year under Labor Prime Minister Kevin Rudd (who wanted a “big Australia”), to just below 200,000 now.

Kevin Rudd envisaged a “big Australia” with 35 million people by 2050. Then treasury secretary Ken Henry worried that the country could not sustain a 60 per cent population increase. The Opposition leader at the time, Malcolm Turnbull, welcomed the larger population target, but warned it needed to be accompanied by planning for necessary infrastructure, especially in water. That was 2009.

Last week Dutton kicked off a debate when he told Hadley in passing he was open to deeper immigration cuts: “If we have to bring it back further, if that’s what’s required and that’s what’s in our country’s best interests. Ray. That is what we will do.”

Tony Abbott, speaking at the Sydney Institute last night, commended Dutton for his comment, picked it up and ran hard with it. In fact, he over-ran it, as usual, by linking high immigration to flat wages, a hot-button issue for the government.

Low wage growth is a vexed political problem. The government’s answer has been to talk about company tax cuts as a means to boost profits, spur investment and ultimately, therefore, increase demand for labour (and higher wages).

Until now, immigration is often blamed for congestion, or increasing unemployment, but not many people have argued that immigration is responsible for flat wages. That’s because there’s little evidence to support a connection (not that that would ever bother Abbott). ANU economics professor Robert Breunig, in research part-funded by the Productivity Commission, looked at annual earnings, weekly earnings, wage rates, hours worked, participation rate and unemployment across 40 different skill groups in which immigrants and existing or incumbent workers competed, and found “immigration had no impact on the wages of incumbent workers.”

Melbourne economist Leith van Onselen, from MacroBusiness and a member of the Sustainable Australia party, this morning told 2GB’s Michael McLaren that Abbott’s comments were “absolutely fantastic” and “a great start”. In furious agreement the pair blamed immigrants for overcrowding schools and hospitals, traffic congestion and housing affordability, and generally turning our “free-range” cities into “battery farms with these tiny dreadful apartments”. Van Onselen said Abbott was “absolutely right” to link immigration to wages growth. They blamed a growth lobby of developers and retailers, and a federal government chasing a higher GDP number, and also the Migrant Council.

As it happens, economist Tom Westland unpicked van Onselen’s figures in The Guardian last year:

The academic literature supports the idea that immigration is not likely to make non-immigrants any poorer. Studies suggest that, on average, immigration has little to no impact on wages … Our cities feel crowded and our natural resources are under pressure. But this is almost entirely Australia’s own fault. We keep on spending billions of public and private dollars on white elephants like the Adelaide-Darwin rail line because we’re too lazy to do the analysis required to allocate infrastructure money efficiently, or because politicians ignore analysis when it’s done.

Today, both Dutton and Treasurer Scott Morrison have dismissed Abbott’s call for an immigration cut. It won’t matter. Expertly, Abbott has lit the fire again and in talkback radio-land, they’re off. Nobody voted for higher population growth, McLaren warned, pointing the finger at the PM’s wife, Lucy Turnbull, who is head of the Greater Sydney Commission, which is planning to increase the city’s population by two-to-three million over the next 50 years. She would not suffer the lower quality of living that resulted, he said: “I don’t begrudge anybody their success but when you live at Point Piper you don’t have to worry about this too much.” Van Onselen wants a plebiscite on Australia’s population, and thinks the Coalition would be crazy not to do as Abbott says, to nullify One Nation and wedge Labor on housing affordability and wages, hitting it right in its heartland.

Listen to The Politics Podcast, with Rachel Withers

since this morning

Fairfax Media reports that the International Monetary Fund has “thrown its weight behind the Turnbull government’s company tax cuts, arguing they would ‘benefit productivity and reduce inequality’”.

The Australian reports [$] that SA premier Jay Weatherill has committed Labor to a 75 per cent renewable energy target by 2025 – a move labelled “complete madness” by the federal government.

An unnamed senior journalist has told Crikey’s media reporter Emily Watkins the national broadcaster has had “the worst couple of weeks in the ABC’s modern era” and described the situation as “diabolical”.

Wages grew by 0.6 per cent in the last quarter of 2017, and 2.1 per cent through the year, according to the ABS data released today. “While marginally higher than market expectations, wage growth remains mired near historic lows”, the ABC reports.

in case you missed it

The Australian’s Hedley Thomas reports [$] that 30 deaths at a Baptist-run aged-care home in Townsville are being investigated by police, the coroner and health regulators after staff raised concerns.

Ross Gittins writes that politicians looking after their irrigator mates are standing in the way of a fix for the Murray-Darling Basin.

The Australian’s Troy Bramston writes [$] that Labor’s Left faction is pushing to increase taxes on the wealthy, boost union power in workplaces and abandon support for offshore processing of refugees and boat turn-backs in the lead-up to the party’s national conference in July.

Janet Albrechtsen writes [$] that Malcolm Turnbull knew all the key facts about the Joyce affair long before he blew his top.

by Helen Elliott
‘Border Districts’ by Gerald Murnane
Writing that rewards patience

by Helen Garner
Mother courage
At home with Rosie Batty

Paddy Manning

Paddy Manning has worked for the ABC, Fairfax, Crikey and The Australian. He is the author of Body Count: How Climate Change Is Killing Us, Inside the Greens and Born To Rule: The Unauthorised Biography of Malcolm Turnbull.

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