Populate and Perish?: the immigration debate
David Clark, Student Economics Briefs, 1997
In June 1996, a Sydney Morning Herald-AGB McNair poll on immigration found that Australians are not happy with our immigration programme.
Sixty-five per cent of respondents felt the current immigration intake level of about 100,000 a year was too high, 88 per cent of the 50 per cent who said the mix was incorrect nominated Asian migration as the main imbalance, and more than 60 per cent of total respondents felt the proportion of migrants admitted for family reunion reasons was excessive.
Australia’s unemployment rate was the main reason given for their dissatisfaction. Other factors cited were social or religious conflict, 15 per cent; too many Asians, 7
per cent; environmental strain, 6 per cent; and drugs and crime, 3 per cent. However, 60 per cent supported our general emphasis on multiculturalism. Further evidence of dissatisfaction came with a by-election for Mr Keating’s former seat, in which the two anti-immigration candidates drew a combined 22.5 per cent of first-preference votes.
Such results followed calls from the NSW Premier, Mr Bob Carr and assorted environmental, anti-immigration and racist groups for a sharp cut in our immigration rate.
This brief provides the key facts on this controversial topic, the pros and cons of immigration and concludes with a discussion of what levels of immigration and mix may be optimal over the years ahead.
In July 1996, despite a promise during the Federal Election campaign "not to reduce the refugee component (of the immigration intake) and to emphasise the role of assisting refugees", the Howard government announced important changes to our immigration target and selection procedures.
The 1996-96 total intake was cut from 96,000 to 86,000. This is considerably lower than mid 1980s levels but is still considerably higher than early 1990s ones. Twelve thousand places will be reserved for refugees and others arriving under the humanitarian part of the immigration program. Of the remainder, more emphasis will be placed on business and other skilled immigration at the expense of family reunion.
More controversially, it announced:
* A tougher balance-of-family test, which means that parents will be allowed to settle in Australia only if a majority of their children already live here.
* The use of two-year probationary visas for all spouses and fiances, enabling immigration officials to check on the validity of relationships before permanent residency is granted.
* A two-year "cohabitation requirement" for de factos before they can gain entry.
* A requirement that immigrants take out citizenship before sponsoring a family member.
* More rigorous overseas testing of the legitimacy of spouse and fiancee relationships.
* Restrictions on serial sponsorship, with only two spouses allowed in a five-year period.
The measures primarily are aimed at the unexpected 30 per cent surge in demand for spouse-related immigration over 1995-96 which was driven mainly by about 40,000 Chinese nationals granted permanent residency by the previous Government, many of whom are now sponsoring spouses from China, who in turn are expected to apply for entry for their relatives.
.
While at the time of going to press - late July 1996 - these reforms had not passed through the Senate, they constitute the biggest shake-up in our selection procedures for many years.
The anti- immigration debate led by environmentalists and “White Australia” advocates
Debate about immigration in Australia has always transgressed party political positions.
Traditionally, the pro-immigration campaigns have been led by nationalists, who wanted to maximise Australia’s development, employer groups seeking a ready supply of labour and Australians of all classes and backgrounds who have feared that if we did not increase our population we would perish. This latter view was particularly popular around the turn of the century and after World War II, when Japanese expansionism reached as far south as Darwin.
Immigration: the hard facts
* Among Western developed economies, Australia has a high population growth rate, averaging around 1.5 per cent a year over the past decade. This is more than twice the rate of the United States or Canada. China, Japan, South Korea, Singapore, Taiwan, Thailand are all growing at about the same rate or slower
* Since 1945, 5.5 million migrants have come to Australia.
* Since 1947, there have been nearly 3 million children born in Australia with one or both parents born overseas. As a result of immigration and these births, our population is now 65 per cent larger than it otherwise would have been. Net migration gain has provided over 45 per cent of the increase in our population since 1947.
* Over 1994-95, migration added 83,600 people to Australia’s population, an increase of 25 per cent on the previous year and the 1995-96 figures are expected to be higher. 1988-89 saw the highest intake since 1974-75 - 145,300 - and the Howard Government has intimated that it will set targets of around 100,000 immigrants a year over the next few years.
* In 1966-67, more than half (54.4 per cent) of our migrants came from the UK and Ireland. Then, only two non-European nations, India and Lebanon, featured on the list of the top 10 source countries. By 1976-77, the proportion from the UK and Ireland had fallen to 27 per cent. It had halved again, to just 13.1 per cent, by 1991-92, and eight of the top 10 source nations were Asian. In that year, more than half the total came from Asia, with significant numbers also from the Middle East, North Africa and South America.
* Over the year ended June 1995, the most important sources of immigrants were the UK (12 per cent), New Zealand (12 per cent), the former Yugoslav republics (8 per cent), Vietnam (6 per cent), Hong Kong (5 per cent) and the Philippines (5 per cent ).
* Over the same period, permanent departures of residents totalled 26,900 - a fall on the previous year’s figure of 27,280. Of those who depart, 40 per cent have usually been in Australia less than 5 years. Those born in New Zealand and the UK have the highest departure rates. Between 1984-85 and 1994-95, permanent departures of Australian-born increased both in numbers (from 6,100 to 10,100) and as a proportion of all permanent departures (from 30 to 37 per cent).
* On average, immigrants are better qualified and have a higher level of schooling than Australian-born citizens – although immigrants of southern European origin have fewer qualifications, Asians have similar qualification levels, and northern European and Anglo-American immigrants have higher qualification levels.
* NSW is the main destination for migrants. Over the past twenty years, it has received , on average, about 40 per cent of the total, Victoria 25 per cent and Queensland and Western Australia 10 per cent each. However, over time it is estimated that around 60 per cent of migrants finally settle in Sydney.
* Western Australia has the highest percentage of its population born overseas at 29 per cent and Victoria and the ACT are also above the national average of 22 per cent.
Over 1994-95, the fastest growing groups were Singaporeans (up 12 per cent to 36,400) Indonesians (up 9 per cent to 42,400) and persons from Hong Kong and Macau (a 7 per cent increase to 91,300).
* Family migration has been the most important category of migration over the past decade, comprising over 40 per cent of total arrivals - and 64 per cent of arrivals from South East Asia and 55 per cent of arrivals from North East Asia. Over 1994-95, 16 per cent of migrants were admitted under the humanitarian programme.
* Unemployment rates are highest among immigrants born in non-English speaking countries, with Lebanese and Vietnamese having the highest rates. Over time, most migrants obtain jobs commensurate with their qualifications and skills and the children of immigrants appear to do at least as well as those with Australian-born parents, in terms of the occupation and income of their parents.
* The children of immigrants appear to do at least as well as those with Australian-born parents, in terms of the occupation and income of their parents. However, there are marked differences in educational participation, with children of Greek
parents at the high end and female children with Turkish and Lebanese parents at the bottom end. As with Australian-born children, the higher the level of education they achieve, the better they do in the labour market.
* The average immigrant on arrival is about 5 years younger than the average Australian. This means that immigration slows down the "greying" of our population.
* Asian women have the highest life expectancy of all ethnic groups, with most expected to live to at least 83, two years longer than Australian-born women.
At the age of 15, male Asian migrants have life expectancies of four years more than those born in Australia, and European migrants of both sexes outlive Australians, on average, by 1 to two years. ( Research by Dr Colin Mathers, Monash University)
* Illegal immigration has been a problem in recent years – estimates of illegal residents range from 60,000 to over 500,000.
Sources: ABS 3412.0; 3101.0; 3219.0; 3301.0; 3302.0; 3401.0; 3404.0 and Bureau of Immigration, Multicultural and Population Research, Immigration Updates
Anti-immigration campaigns are equally disparate. They are led by racists, who believe in the superiority of persons of Anglo-Irish or “European” origin, environmentalists - who believe we already have too many persons in Australia (see, for example, Tim Flannery’s The Future Eaters, (1994) - some sections of the labour movement who believe that too high a level of immigration reduces the job opportunities and incomes of Australian-born and previous migrants, and opponents of multiculturalism who would like to see either much lower immigration rates and/or a different composition of the intake. Some migrant groups also bring traditional animosities towards other nationalities and races to Australia.
Anti-immigrationists are thus found right around the political circle - from the green left through to the racist right.
The most comprehensive investigation of our immigration program was made in the Fitzgerald Report of 1988. It made a series of recommendations which set off a new round of debate about the topic, although many of its key recommendations were subsequently either ignored or watered down by the Hawke and Keating Governments.
The main ones were:
* Business immigrants should be required to prove after a period of
re-settlement that they have invested in productive, not merely
speculative, enterprises
Some tightening up has occurred here. For example, over 1993-94, migrants under the business skills program doubled to 1,283, with the average family transferring to Australia $640,000 in the first year of their residence. The average level of business investment was $208,000 and more than 60 per cent of the businesses were exporting within 12 months.
Over that year, Hong Kong supplied 25 per cent of the new entrepreneurs, but other key sources were Indonesia, Malaysia, South Africa and Taiwan. From April 1995, a new investment-linked visa system began, with recipients required to make a fixed three-year investment of at least $750,000 in government securities.
* "Where there are two applicants who score equally on other
factors, English language must be decisive...”
* Refugee and humanitarian immigrants should be more closely screened.
* Family re-union should be tightened and made more made more difficult for distant relatives.
* "Non-survival benefits" to those migrants who have failed to take out citizenship should be withdrawn
At that time about 1 million immigrants - or 43 per cent of the total - had not taken Australian citizenship but were eligible to receive the same social
security benefits as those with Australian citizenship. (This recommendation was rejected by Mr Hawke).
The Report also acknowledged that there is "confusion and mistrust" of
multiculturalism. Mr Howard, the then Leader of the Federal Opposition and now current Leader, reacted to this acknowledgement with the following:
"I think we can, and we must, have a debate on immigration in
this country because there is profound community unease about the
present structure of immigration policy... I think there are
profound weaknesses in the policy of multiculturalism. I think it
is a rather aimless, divisive policy and I think it ought to be
changed"( National Press Club, 23 June 1988).
Since then, however, Mr Howard has moderated this anti-multiculturalism stance.
While we have not had an inquiry on this scale since, the issues it raised remain highly current. For example, in early 1995 the newly-elected Premier of NSW, Mr Bob Carr, was widely criticised when he drew attention to the fact that migrants display a heavy preference towards eventually settling in Sydney and that this is adding to the pressures on his city.
However, what is most interesting about public debate since the Fitzgerald Inquiry was the relative lack of interest in cutting immigration levels, as the recession of the late 1980s - early 1990s hit. Traditionally, we have used immigration policy as a counter-cyclical tool by encouraging high levels of immigration in times of low unemployment and cutting it when unemployment rose sharply.
Note, for example, on the accompanying graph the sharper and deeper cut in immigration intake when the recession of the early 1990s hit and the subsequent sharp rise in the quota when the economy grew strongly again and the unemployment rate fell.
Nevertheless, net immigration did fall sharply in 1992/93 but despite the highest post World War II unemployment rate still remained above the low reached in 1974/75.
The pros and cons of immigration
The pros and cons of immigration cannot be fully quantified, let alone a simple social and economic balance constructed, complete with net benefit bottom line, despite the impression given by pro and anti immigration academic and other researchers on this topic.
Real world economies cannot be dissected like dead rats in a laboratory and the immigration nerve excised, deadened or excited to prove a prejudice about our immigration policy.
Furthermore, while our immigration debate has all sorts of non-economic
aspects which cannot be ignored, its economic aspects cannot be
ignored either.
Yet, most public discussion of immigration is dominated
by non-economists who appear to know little about how and why
economies change over time and our own peculiar economic
history.
Opponents of immigration argue that it has:
* Produced unemployment, particularly in times of recession and
among the unskilled section of the workforce.
* Reduced the willingness of employers to train local employees.
* Worsened our balance of payments problems by increasing imports
and as a result of remittances sent back to relatives in the home
country.
* Discouraged industrial restructuring and tariff reform because
of the high concentration of migrants in industries - such as
clothing, textiles and the motor vehicle industry - which are
declining and inefficient.
* Increased the need for public expenditure on essential services
and social infrastructure.
* Exacerbated environmental problems by encouraging greater
concentration of population in our cities and more rapid
depletion of natural resources.
* Increased crime rates, produced ghettos, and changed our
life-styles, culture and social values for the worse.
How the “White Australia” immigration policy ended
* 1966 - the Review of Immigration Policy encouraged non- European migration by reducing the residence requirement for citizenship for non-Europeans from fifteen to five years.
* 1973 - the Whitlam Labor government announced that in future there would be no discrimination against migrants on the basis of colour, race, or nationality and in late 1973 lowered the residence requirement for all intending citizens to three years.
* 1976 - the Fraser Liberal government began to accept refugees from the Vietnam War. Increased migration of other refugees then followed, including Lebanese Chinese, and Cambodians.
On the other hand, supporters of immigration argue that
immigration has:
* Increased economic growth by expanding labour supply and the
demand for locally-produced goods and services.
* Helped reduce labour shortages, especially of skilled
personnel, thus keeping labour costs lower than they otherwise
would have been.
* Introduced new skills and experience to the workforce which
have improved the quality and flexibility of our labour.
* Provided extra labour without the costs of education and training.
* Generated economies of scale which enabled the production of a
much wider range of goods and services and the use of much more
capital-intensive techniques.
* Brought persons to Australia with more entrepreneurial drive
than many Australian-born persons. (The dominance of migrants
among the ranks of our most successful post World War II
business persons supports this claim).
* Created a larger tax base for public expenditure on facilities
like schools, universities and roads.
* Enriched our social and cultural lives and widened our
perspective on the world, producing a more tolerant and
humanitarian Australian.
A simple example of this is the fact that Australians are now eating foods that 20 years ago they would not have been able to pronounce. Anyone who can remember the paucity of food outlets and the limited options available in our “deli’s” and PDF shops
in the 1950s has to agree that immigration has radically improved our dietary choices.
Unfortunately the immigration debate often led by persons ignorant of our history and economics
One's views on immigration can be very much influenced