How I got it wrong on migration

The simplistic argument that a steady flow of young immigrants will help counter an ageing population no longer holds water. But our moral responsibilities remain.

Can Australia continue to prosper, and keep improving our cultural, democratic and judicial institutions, if we keep letting in so many migrants?

I raised this question again last week (Big Australia? Big deal, November 27) and elicited some strong opinions on the issue.

There are three commonly argued reasons to keep migration high. First, because we have an ageing population, and therefore need more young families to slow or rebalance this demographic trend; Second, our pretensions of being a ‘middle power’ in the foreign affairs sense demand we become at least ‘middle sized’; And finally because in the case of refugees, we have at least the same moral obligation as our near neighbours to help people displaced by war and poverty.

Against these arguments, there are three common objections. First, that we have no moral obligation at all – it’s dog eat dog, and as long as we can protect the borders, ‘We’re alright Jack’; Second, there is the Hanson-esque argument that certain ethnicities tear at Australia’s social cohesion and, therefore, threaten those cultural, democratic and judicial institutions; And finally there is the argument that we simply cannot continue to afford to house and provide for around 250,000 new arrivals a year.  

It’s only a small minority who make the first objection. Australians have shown strong support for humanitarian interventions such as the Australian-led peacekeeping and rebuilding of East Timor from 1999 onwards (a country now ruffling feathers by following Indonesia’s example and accusing Australia of spying on it for economic gain).

While I was reporting on the progress of refugee families in the early 2000s, one school principal pointed to a class of Horn of Africa students and said: “Some of these kids have seen their parents beheaded.” There are good reasons not to tell them “We’re alright Jack.”

The second issue, namely the problem of migrants failing to live harmoniously within ‘muliticultural’ Australia is less easily dismissed. The fears that Pauline Hanson's One Nation party fanned are still there.

However, though violence and inter-racial conflicts flare up from time to time – the 2005 Cronulla riots being the most extreme recent example – there is no suggestion of a breakdown in the rule of law, the formation of underclass ghettos or similar problems.

I should disclose that I spend around half my time in Melbourne’s ethnically diverse western suburbs. We have ethnic drug gangs, language problems, poverty-driven petty crime ... and, nonetheless, a strong rule of law, thriving democracy and an enriched cultural life. Nobody's perfect, but we're all Australian.

The Australian experiment with multiculturalism, backed by the Australian Migrant English Program and a raft of other support services, has made Australia a global exemplar of how to handle these difficult issues.

But what of the last objection listed above? Can we ‘afford’ continued high migration?

Economist Leith van Onselen sent me an intriguing article last week in which he argues that migration won’t help with the ageing population problem.

By studying dependency ratios, van Onselen finds that the ageing of the migrants themselves (assuming fairly constant fertility rates) means continuing high migration wouldn't help things much.

He quotes the Productivity Commission which stated recently: “... an increase in annual net migration from 150 000 to 300 000 would lower the proportion of those aged 65 or over by less than 3 percentage points by 2044-45. As an illustration of the challenge, the Commission showed that delaying an increase in the dependency ratio by 40 years would require a net migration-to-population ratio of 3 per cent per year, leading to a population of around 85 million by 2044-45.”

Dr Bob Birrell, a Monash University demographer well known for his work with the Commonwealth government’s National Population Council from 1987–1993 and as a member of the independent Review of the General Skilled Migration Program which reported in May 2006, broadly backs this view.

Birrell argues we’re in a “sweet spot” in terms of the numbers of working age Australians available to work, and things will go downhill from here.

And while new migrants ease the pressure of a proportionally declining workforce in the short term, they won’t change things much 20 years hence when the “retiring baby-boomer reach their frail years”.

Migrant fertility rates are not, says Birrell, significantly different to the established Aussies’ propensity to breed. And so we can’t expect them to produce an army of workers to provide for those frail boomers in 20 years’ time.

Moreover, with 90 per cent of migrants settling in our major metro areas, Birrell’s main concern is the housing and infrastructure demands they place upon public and private investment resources.

In essence Birrell sees the high migration rates of the past decade as being due to both Coalition and Labor governments worrying that there would not be enough labour to feed the mining boom. Beyond that, he doesn’t see it as having much effect on the ageing population.

Peter McDonald, ANU professor of demography and deputy director of an ARC Centre of Excellence for Population Ageing Research, still sees a role for migration. He said in a recent talk: “The big impact on population age structure is births. And Australia's birth rate is relatively high at the moment compared to, say, Japan's.

“But immigration does have some impact on age structure and immigrants to Australia at the present time are very young, early 20s is the average age – this includes the people who come in as international students and stay on, and backpackers. So the impact on the age structure is small but meaningful in economic terms.”

Birrell points out that the “can we afford it?” question relates to the social and economic costs of pouring more people into the metro areas.

There are a lot of voters crammed into Western Sydney, and Melbourne’s west and south east, which can work against either party arguing for a ‘Big Australia’.

But things are changing. As the mining construction boom comes off the boil, both major parties are talking about the ‘dining boom’ – agriculture plus more value-added food processing to help capture the exploding demand for good food across Asia.

And that is where the ‘can we afford it’ question is answered. We have already seen a number of northern Queensland cities grow to cater to the mining boom. Government policy now needs to work to grow regional cities well-situated to capitalise on the dining boom. 

Many journalists – this one included – have assumed migration will sort out the ageing population problem.

On that, we have been wrong.

However, in order to become a true middle-power; in order to not appear virtually deserted by our populous neighbours to the north; and in order to play a moral role in settling the displaced people of our region, the migration that built Australia should continue.

That position is occasionally attacked as a cynical ploy by vested interests to boost house prices and deliver strong profits to the giant finance industry that milks that sector of the economy. Well, yes, high migration does have that effect.

But there are other forces at work; other reasons to keep migration levels high. And if we fail to ‘afford’ it, it’s a failure of public policy, not because Australia’s full.