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The Forum > Article Comments > No wages growth, but we keep pushing population growth > Comments

No wages growth, but we keep pushing population growth : Comments

By Eric Claus, published 1/8/2019

The HILDA report, released this week, showed that median disposable income in Australia dropped by $542 from 2009 to 2017, despite the fact that Australia has had the highest population growth rate in the developed world.

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Our political class has embraced mass immigration as a crude way to inflate aggregate economic growth numbers. To quote Alan Kohler: "Australia’s actual national economic strategy, as opposed to the pretend one, is to simply add numbers – not to encourage jobs and growth through tax cuts – and it has been since 2005, when John Howard doubled average immigration from 100,000 per year to 200,000.”

Of course, as the author of this piece rightly notes, the Population Ponzi model is failing to lift the living standards of incumbent residents. Per capita incomes are going backwards. Our labour market has been flooded, leading to increased job competition and stagnant wages. Our cities have been crushloaded and are now struggling in terms of infrastructure, services and housing. Australia’s infrastructure deficit has fallen badly behind over the past decade and will continue to do so under the current mass immigration program, thus further eroding residents’ living standards.

Economist Leith van Onselen debunks some of the stupid pro-high immigration/Big Australia arguments here: http://www.macrobusiness.com.au/2018/02/mb-submission-governments-migration-program-review/

The majority of Australians are opposed to high immigration and a bigger population but Liberal, Labor and Greens politicians continue to ignore public opinion. Bob Birrell and Katharine Betts from the Australian Population Research Institute offer some insights into this glaring public-elite divide over immigration and population growth in this interesting report: http://tapri.org.au/wp-content/uploads/2019/04/Tapri-survey-2018-final-report-April.pdf

It makes you wonder what kind of 'democracy' Australia really is when the major parties are able to pursue such thoroughly anti-democratic policies.
Posted by FrankU, Saturday, 3 August 2019 12:40:06 PM
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Thanks very much FrankU. I highly recommend the Leith van Onselen / MacroBusiness article for anybody reading my article. It says most of the things I wanted to say in more depth than I said them and hits a few I didn't say really well. The section on GDP/capita v. Ageing workforce and labor productivity v ageing workforce is brilliant. I love how he nails the quotes from Malcolm Turnbull and Bernard Salt. They never thought they had to present data, except GDP is going up.

And how good is this quote: The Australia Institute’s chief economist, Richard Denniss, the very purpose of foreign worker visas is to “suppress wage growth by allowing employers to recruit from a global pool of labour to compete with Australian workers”. Kabamm

The TAPRI (Birrell and Betts) report is also great. It's long but I recommend just the Executive Summary for busy readers.

On your last point though, the political parties know our version of 'democracy' better than all of us. They know that we won't vote for the minor parties in the house of representatives. Their job isn't to "represent the majority," their job is to win elections. If Labor, Liberal and Greens all support high immigration there is no danger of the high immigration policy changing. We can't just cry that it is anti-democratic (although it seems it is) until we get out and vote them out of office. Lab Lib and Greens know that big business will not support them and the Murdoch press will smash them, so they proceed with their marching orders. I wish I knew how to change that. Hopefully more people like you will vote them out.
Posted by ericc, Saturday, 3 August 2019 4:02:59 PM
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We can't just cry that it is anti-democratic (although it seems it is) until we get out and vote them out of office.
ericc,
That's why they ensure that the public Service is so insanely huge, it's their safety net !
Posted by individual, Saturday, 3 August 2019 8:10:12 PM
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Hi Eric. I would also recommend the following recent report by Leith van Onselen and Cameron Murray dismantling the claim that high immigration is needed to offset an ageing population.

Three Economic Myths about Ageing: Participation, Immigration and Infrastructure - http://www.macrobusiness.com.au/2019/04/mb-report-three-economic-myths-ageing-participation-immigration-infrastructure/

Overview:

"Population ageing due to longevity is one of the greatest successes of the modern era. However, it is widely thought to dramatically reduce workforce participation and overall output resulting in significant economic costs.

This widely held view is wrong. Ageing countries have higher economic growth and the improved health and longevity of older people increases their economic contributions.

High immigration is also thought to combat population ageing and be a remedy for these non-existent costs of ageing.

This is wrong. Low immigration can affect the age structure by helping to stabilise the population, but high immigration has almost no long-run effect besides increasing the total population level. This creates bigger problems in the future.

It is also widely thought that simply investing in infrastructure will accommodate high immigration and population growth at little cost.

This too is wrong.

Diseconomies of scale are a feature of rapid infrastructure expansion due to (1) the need to retrofit built-up cities, (2) the dilution of irreplaceable natural resources, and (3) the scale of investment relative to the stock of infrastructure."

In any case, keep up the good work. I hope you'll keep writing on this important topic.
Posted by FrankU, Sunday, 4 August 2019 1:21:07 PM
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Eric and individual, I totally agree that the voting patterns of Australians are part of the problem. Australian voters tend to grizzle about the state of the country and the behaviour of the major parties but overwhelmingly still vote for them. The major parties know they can essentially do what they want and still get voted back in.

I am heartened that more people appear to be voting for minor parties but we have a long way to go.
Posted by FrankU, Sunday, 4 August 2019 1:28:09 PM
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FrankU,
The changing of a mentality can only be achieved by changing education. We, as citizens must demand that Teachers attain a much better standard than is the case recently/presently. If they fail to perfom their pay gets reduced, simple ! Teachers should be permanently on probation as should all public servants. This is the only chance for us to get value for Dollars AND a better society ! Being in the public service is a privilege not just a no-effort required career path !
Posted by individual, Sunday, 4 August 2019 3:02:27 PM
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