Big Migration Not Quite the Silver Bullet for Australia’s Labour Shortage: Economist

Pedestrians move along George Street in the CBD in Sydney, Australia, on Nov. 8, 2021. (Lisa Maree Williams/Getty Images)

The Australian government’s pledge to substantially up migration may not yield the economic benefits it expects, says economist Judith Sloan.

Following the Jobs and Skills Summit in early September, the Labor government announced the country would receive 195,000 new migrants per year, an increase from the previous amount of 160,000.

The call for more migrants has been echoed by all corners of the business and union sector as a means of dealing with a lack of manpower across several industries including cooking, nursing, and regional jobs.

The situation was exacerbated by two years of lockdown and tight international border controls, which have kept students, working holiday visa applicants, and new migrants from entering the country.

However, Sloan, a regular columnist and former commissioner of the Productivity Commission, said while there was “sensible re-thinking” around the country’s migration program—including potentially scrapping the “golden ticket” visa—the economic benefit may not be as substantial as slated.

“Most people who secure permanent visas are actually already in the country on temporary visas. So when you think about the economic impact—if those people are already here and working, and they have one visa and then they have another, it actually won’t have a huge economic impact,” she told The Epoch Times.

“It may encourage more people to come on a temporary basis because they think the probability of securing permanent residency is higher. But I wouldn’t be overestimating the economic impacts of that,” she said.

Mass Migration Programs a Mixed Blessing

Sloan also said migration was a mixed blessing for communities. On the one hand, there is a positive impact on a country’s gross economic output, but on the other, whether it improved the “per capita”—or individual—wealth of Australians was questionable.

“There are very strong influences for a big migration program—I’m not talking about the migrants themselves—I think there are lobby groups like the property industry, retail sector, universities and those [industries] that actually gain,” she said.

“But the kicker is the costs,” she added. “We don’t take into account the external costs that are imposed on locals so that’s congestion, crowded schools and hospitals, and inadequate infrastructure in general.

“State governments are generally in charge of those things, and they’re very slow dealing with them. So I think it can build up a sort of resentment.”

Meanwhile, in response to the Jobs and Skills Summit, fellow economist John Humphreys said there was a lack of a true, long-term productivity solution.

“The first, second, and third priority of the Summit was productivity, productivity, and productivity—and there wasn’t a lot of that being discussed,” said the chief economist of the Australian Taxpayers Alliance.

Humphreys called on the federal opposition to back the Labor government to continue the rollout of the Stage Three tax cuts that will simplify two tax brackets into one and will result in many families paying less income tax.

“The Stage Three tax cuts are one of the only examples we’ve had in the last 20 years of actual productivity reform,” he previously told The Epoch Times.

Sloan said Australia suffered from the “resource curse” and had been the lucky beneficiary of world events.

“We are a big exporter of gas, coal, iron ore and other minerals the world needs. So the terms of trade—the ratio of export prices to import prices—is actually at a historic high now,” she said.

“We’re lucky in the sense that world events have pushed demand for those products, and we’re reaping the rewards,” she added. “There is a saying in economics called the ’resources curse,' and basically it says countries lucky enough to have resources often have very bad policies. We’re probably an example of that.”