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Environmental, economic and social impacts

There are a wide range of views in the Australian community on the composition and level of immigration, and on the possible effects of varying the level of immigration and population growth, some of which are based on empirical data, others more speculative in nature. In 2002, a CSIRO population study entitled "Future Dilemmas", commissioned by the then DIMA, outlined six potential dilemmas associated with immigration-driven population growth. These dilemmas included the absolute numbers of aged continuing to rise despite high immigration off-setting ageing and declining birth-rates in a proportional sense, a worsening of Australia's trade balance due to more imports and higher consumption of domestic production, increased green house gas emissions, overuse of agricultural soils, marine fisheries and domestic supplies of oil and gas, and a decline in urban air quality, river quality and biodiversity.[19]

Environment

Some members of the Australian environmental movement, notably the organisation Sustainable Population Australia, believe that as the driest inhabited continent, Australia cannot continue to sustain its current rate of population growth without becoming overpopulated. SPA also argues that climate change will lead to a deterioration of natural ecosystems through increased temperatures, extreme weather events and less rainfall in the southern part of the continent, thus reducing its capacity to sustain a large population even further.[20] The UK-based Optimum Population Trust supports the view that Australia is overpopulated, and believes that to maintain the current standard of living in Australia, the optimum population is 10 million (rather than the present 20.86 million), or 21 million with a reduced standard of living.[21]

It is argued that immigration exacerbates climate change, because immigrants generally come from countries with low greenhouse gas emissions per capita to countries with high per capita emissions (like Australia). A number of climate-change observers see population control as essential to arresting global warming.[22] Australia could experience more severe droughts and they could become more frequent in the future, a government-commissioned report said on July 6, 2008.[23] The Australian of the year 2007, environmentalist Tim Flannery, predicted that unless it made drastic changes, Perth in Western Australia could become the world’s first ghost metropolis, an abandoned city with no more water to sustain its population.[24] Analysis by The Australia Institute shows that Australia’s population growth has been one of the main factors driving growth in domestic greenhouse gas emissions. It further finds that the average emissions per capita in the countries that immigrants come from is only 42% of average emissions in Australia, meaning that as immigrants alter their lifestyle to that of Australians, they increase global greenhouse gas emissions.[25] It is calculated that each additional 70,000 immigrants will lead to additional emissions of 20 million tonnes of greenhouse gases by the end of the Kyoto target period (2012) and 30 million tonnes by 2020.[26] In contradiction to this, a study in science journal Nature claims that immigration does not result in global warming because although immigration increases population in one country, on a global level immigration does not affect population.[27]

Housing

Some claim that Australia's recent level of immigration has (along with natural population growth and a range of other economic factors) contributed to a widespread shortage of affordable housing, particularly in the major cities.[28] A number of economists, such as Macquarie Bank analyst Rory Robertson, assert that high immigration and the propensity of new arrivals to cluster in the capital cities is exacerbating the nation's housing affordability problem.[29] According to Robertson, Federal Government policies that fuel demand for housing, such as the currently high levels of immigration, as well as capital gains tax discounts and subsidies to boost fertility, have had a greater impact on housing affordability than land release on urban fringes.[30] However, the Productivity Commission does not accept "population pressures" as a major driver of strong increases in house prices, stating that "increased demand for better quality and better located dwellings, rather than for more dwellings, has been the primary driver".[31]

The Productivity Commission Inquiry Report No. 28 ‘First Home Ownership’ (2004) also stated, in relation to housing, that “Growth in immigration since the mid-1990s has been an important contributor to underlying demand, particularly in Sydney and Melbourne.” [32] The RBA in its submission to the same PC Report also stated “rapid growth in overseas visitors such as students may have boosted demand for rental housing”.[33] However, in question in the report was the statistical coverage of resident population. The “ABS population growth figures omit certain household formation groups — namely, overseas students and business migrants who do not continuously stay for 12 months in Australia.” [34] This statistical omission lead to the admission: “The Commission recognises that the ABS resident population estimates have limitations when used for assessing housing demand. Given the significant influx of foreigners coming to work or study in Australia in recent years, it seems highly likely that short-stay visitor movements may have added to the demand for housing. However, the Commission is unaware of any research that quantifies these effects.” [35]

Employment

According to one researcher, there are thousands of low-cost IT workers entering Australia who are undermining the job prospects of new computer science graduates and reducing salaries in the IT industry.[36] However, other research sponsored by DIAC has found that Australia’s structured labour market along with the larger number of immigrants with higher education levels has tended to raise employment levels for Australians who are relatively unskilled.[37]

In May 2008, Immigration Minister Chris Evans said that he wanted “a major overhaul of the migrant program to boost numbers, promote unskilled as well as skilled applicants” and that “cabinet is expected to approve a pilot program for a guest worker scheme from the South Pacific. Senator Evans called this a "stalking horse" for the larger debate on unskilled migration.[38]

In October 2008, in response to a question concerning possible cuts to immigration levels resulting from possible rising unemployment due to the Global financial crisis of 2008–2009, Prime Minister Rudd replied that : “As with all previous Governments . . whenever we set immigration targets, we will adjust them according to economic circumstances of the day. . . . What we’ll do in the future is adjust according to economic circumstances.”[39]

In February 2009, Australia indicated that it will cut its annual immigration intake for the first time in eight years due to the slowing economy and weakening demand for labour. Immigration Minister Chris Evans said "It is fair to say that we expect the demand in the economy for labour to reduce. As it is a program very much linked to the demand for labour, we expect to run a smaller program."[40]

In March 2009, it was announced that "the Government has reduced this year's immigration target by 14 per cent because of the financial slowdown.” The Permanent Migration program (skilled migrants) will be cut to 115,000 people this financial year. [41]

Australian trade unions have sometimes exposed attempts by employers to introduce foreign workers into the country in order to avoid paying local workers higher wages.[42]

Economy

In an introductory macroeconomics essay that won a national essay competition, Kimberley Barsby claims that statistical evidence suggests negligible increases in GDP per capita as a result of immigration.[43] However, the former Federal Treasurer, Peter Costello considers that Australia is underpopulated due to low birth rate, and claims that negative population growth will have adverse long-term effects on the economy as the population ages and the labour market becomes less competitive.[44] To avoid this outcome the government has increased immigration to fill gaps in labour markets and introduced a subsidy to encourage families to have more children. However, opponents of population growth such as Sustainable Population Australia do not accept that population growth will decline and reverse, based on current immigration and fertility projections.[45]

There is uncertainty over whether immigration can slow the ageing of Australia's population. In a research paper entitled Population Futures for Australia: the Policy Alternatives, Peter McDonald claims that "it is demographic nonsense to believe that immigration can help to keep our population young."[46] However, according to Creedy and Alvarado (p. 99),[47] by 2031 there will be a 1.1 per cent fall in the proportion of the population aged over 65 if net migration rate is 80,000 per year. If net migration rate is 170,000 per year, the proportion of the population aged over 65 would reduce by 3.1 per cent. As of 2007 during the leadership of John Howard, the net migration rate was 160,000 per year.[48]

According to the Commonwealth Treasury, immigration can reduce the average age of Australians: "The level of net overseas migration is important: net inflows of migrants to Australia reduce the rate of population ageing because migrants are younger on average than the resident population. Currently, around 85 per cent of migrants are aged under 40 when they migrate to Australia, compared to around 55 per cent for the resident population."[49]

Ross Gittins, an economics columnist at Fairfax Media, backs up the Treasury study, claiming that the Liberal Party's focus on skilled migration has reduced the average age of migrants. "More than half are aged 15 to 34, compared with 28 per cent of our population. Only 2 per cent of permanent immigrants are 65 or older, compared with 13 per cent of our population."[50] Because of these statistics, Gittens claims that immigration is slowing the ageing of the Australian population. He also claims that the emphasis on skilled migration also means that the "net benefit to the economy is a lot more clear-cut." Even though Gittins suggests that skilled workers add more to the economy, there are those who acknowledge the importance of unskilled migrants. Treasurer Eric Ripper claims that in Australia "several major capital works projects had to be put on hold because there were not enough skilled and unskilled workers."[51] In 2009, major labour shortage in the Australian farming sector pushed the government to bring into Australia unskilled Tongan guest workers.[52]

Using regression analysis, Addison and Worswick found that “there is no evidence that immigration has negatively impacted on the wages of young or low-skilled natives.” Furthermore, Addison's study found that immigration did not increase unemployment among native workers. Rather, immigration decreased unemployment.[53]

In July 2005 the Productivity Commission launched a commissioned study entitled Economic Impacts of Migration and Population Growth,[54] and released an initial position paper on 17 January 2006[55] which states that the increase of income per capita provided by higher migration (50% more than the base model) by the 2024-2025 financial year would be $335 (0.6%), an amount described as "very small." The paper also found that Australians would on average work 1.3% longer hours, about twice the proportional increase in income.[56]

In a study in the Australian Economic Review, Junankar finds that immigration during the 1980s Hawke Government lowered the unemployment rate[57]

Gittins claims there is considerable opposition to immigration in Australia by "battlers" because of the belief that immigrants will steal jobs. Gittins claims though that "it's true that immigrants add to the supply of labour. But it's equally true that, by consuming and bringing families who consume, they also add to the demand for labour - usually by more."[50]

Infrastructure

Individuals and interest groups such as Sustainable Population Australia filed submissions in response to the Productivity Commission's position paper, arguing amongst other things that immigration causes a decline in wealth per capita and leads to environmental degradation and overburdened infrastructure, the latter creating a costly demand for new infrastructure.[58][59] However, the Productivity Commission's final research report found that it was not possible to reliably assess the impact of environmental limitations upon productivity and economic growth, nor to reliably attribute the contribution of immigration to any such impact.[60]

Australia is a relatively high-immigration country like Canada (the country with the highest per capita immigration rate in the world, see Immigration to Canada) and the United States, and while other economically developed countries like Japan have historically had negligible immigration,[61] the issue of population decline is forcing a rethink of such policies.

Nobel laureate economist Gary Becker from the University of Chicago, in a piece published in the Wall Street Journal, wrote, “The only solution for countries that continue to be concerned about a future with declining and aging populations is to open their gates to immigration. Yet in most countries large-scale immigration creates political, economic and social problems. Immigration is an especially unwelcome alternative for Japan, given the history of Japanese reluctance to have many foreigners settling in their country. As a result, Japan, Russia and many other countries face a worrisome demographic and economic future.”[61]

Source: Immigration to Australia Wiki