The strange parallels between the UK and Australia on immigration continue. Last week the embattled beleaguered trainwreck Sunak government announced a raft of immigration changes to curb the dramatic surge in immigration — mainly by targeting foreign students and temporary worker visa categories. Here, after foreshadowing by Anthony Albanese at the weekend, yesterday the government announced changes to curb the dramatic surge in immigration to Australia — mainly by targeting foreign students and temporary workers.
In the UK, the much higher-profile immigration issue is the Tory commitment to “stop the boats” of illegal immigrants gaming the European asylum system and crossing the channel in small vessels, and Prime Minister Rishi Sunak’s inability to create a workable “Rwanda solution” due to courts overruling his legislation — much to the fury of his right-wing MPs. Here the focus has been on criminal immigration detainees freed by the High Court. Both are distractions from the more important issue of the impact of large volumes of immigration on housing, inflation and infrastructure.
By coinciding with a period of high inflation and high interest rates, the immigration surge here and in the UK has spotlit the economic effects of immigration in a way previously unseen to such a degree — and far more than cheerleaders for high migration would like. It is no longer about 20th century issues such as the ethnic or racial make-up of our migrant intake, or the extent to which migrants integrate. In fact, such debates look so dated they should be conducted in black and white by Anglo men in hats.
Instead it’s about determining if the effects of high immigration — coupled with long-term failure on housing policy, poor competition policy and a system of federal government designed to enable cost-shifting and blame-dodging — are worth it.
The questions aren’t new. The Productivity Commission (PC) undertook inquiries into the economic impacts of immigration in 2006 and and 2016: in 2016 it concluded that higher immigration led to higher GDP growth but lower productivity growth and lower real wages, while it produced slightly higher revenue for governments. And in any event, “whether a particular rate of immigration will deliver an overall benefit to the existing Australian community will crucially depend on the distribution of the gains and the interrelated social and environmental impacts”.
What’s changed since 2016 is inflation — an issue that the PC showed little interest in back then — and the resulting sense that the community is incurring the costs of immigration and none of the benefits. It is business (including universities selling education services to foreign students) that benefits from immigration through higher demand and lower wages, governments through slightly higher revenue and growth, property developers through the increasingly blunt encouragement from government to build as high as possible, and property owners through higher demand for housing.
In contrast, the costs mainly fall on workers, renters and first-home buyers. Even property owners who face the degradation of their local environment as medium- and high-density housing is allowed around them, and who have to share infrastructure with ever more users, can suffer directly from high migration. This is the sentiment that Pauline Hanson — who for nearly 30 years has made a career from appealing to enough prejudice to hook her to the public teat — intuited when she began using Sky News to argue not her standard racist schtick but that big business and government got the benefits from immigration and ordinary Australians didn’t.
It’s been a recurring feature of neoliberal economic policies of recent decades that the benefits of reform policies sold as good for the economy — deregulation, company tax cuts, privatisation, government spending cuts — accrue more and more to large corporations while the costs fall on workers, consumers and small business.
In that context, immigration is the ultimate connecting issue between neoliberalism and political alienation, generating economic resentment about where the costs and benefits accrue while also carrying an innate tribalism and hostility to “others”. That the political response thus far has mostly focused on providing more housing through higher-density development has, if anything, only exacerbated this: where once Bob “Malthus of Maroubra” Carr railed against John Howard’s high level of immigration and declared Sydney was full, his Labor successor Chris Minns proudly declares himself a YIMBY and bravely identifies whole swaths of Sydney to go high-density.
Unlike other neoliberal shibboleths, there was always a weird ideological tension around immigration: the industrial left saw a threat to wages, the environmental left saw an unsustainable pressure on natural resources, and the reactionary right saw a threat to racial purity and monocultural blandness. The neoliberal right, however, is all in favour of open borders and the free movement of people, like capital, while pro-refugee “Let them all come” progressive purists essentially support open borders for anyone who can get here. In some cases, the latter two fuse into one: former head of the Business Council of Australia Tony Shepherd, doyen of corporate neoliberalism in Australia, is also an ardent supporter of refugees.
Labor’s belated commitment to getting immigration “under control”, on top of its integrity measures to fix the mess inherited from Peter Dutton’s loss of control of our borders, is thus as much about a political task of addressing a nebulous community resentment regarding a failure to distribute costs and benefits properly, as it is about fixing the mechanics of a complex demand-driven visa system. A failure to prioritise the former by focusing only on the latter will be politically costly for Labor.
