Big OZ Advocate sees the light!

Another Big Australia hypocrite emerges

By Leith van Onselen in Australian EconomyImmigration

January 9 2020

For years, City of Melbourne’s planning chairman and principal fellow at Melbourne University, Nick Reece, has vigorously defended the mass immigration ‘Big Australia’ policy.

For example, he stated the following propaganda in 2017 on his Politics HQ program:

Countries that don’t have strong immigration programs often get themselves into trouble. And probably the best example of this is Japan, where because of such strong public opinion against immigration, and there’s been a drop in their birth rate, they now have this sort of demographic timebomb which is ticking, which has seen them lose 20-years of good economic growth. So, a properly managed big immigration program surely is a good thing for our economy”.

Reece has also lobbied strongly against policies to lower immigration, such as tighter English language proficiency, the introduction of a four-year waiting period for citizenship, and restrictions on 457 and student visas, arguing they “risk hobbling the economy”.

Then he had the audacity to complain about the ugly high-rises blighting Melbourne, while conveniently ignoring the mass immigration fuelling said over-development.

Is Melbourne's CBD packed with eyesores?

Melbourne City Council wants the planning minister to help prevent development eyesores in the CBD.

With this background in mind, it is interesting to read that Nick Reece now wants the Australian economy to wean itself off its unhealthy reliance on immigration-fuelled growth:

Kylie Minogue fronts the Matesong campaign in the biggest Tourism Australia investment in the UK for more than a decade.

Kylie Minogue fronts the Matesong campaign in the biggest Tourism Australia investment in the UK for more than a decade.

Now, as we enter a new decade, there is a growing number of Australians who view the future with pessimism…

Perhaps this public pessimism is not surprising. Our nation is in the grip of devastating bushfires and drought caused by climate change, our economy and wages are stagnating, our cities are struggling to manage population growth and congestion, millions of Australians live below the poverty line, and national security is being tested by a new cold war in our region between China and the United States

We measure the life of a country in decades, so let’s make the 2020s the decade that Australia gets its mojo back…

The Australian economy needs to get off its dependency on “holes” (mining) and “houses” (population growth fuelled by immigration) and focus on enhancing productivity and building a high wage value-added knowledge economy…

A new economic consensus needs to be built around a more dynamic view of the drivers of growth based on innovation and an expansion of Australia’s technological and industrial capabilities.

Other opportunities for a new national consensus in the 2020s include a national population, infrastructure, land use plan…

Talk about shutting the gate long after the horse has bolted.

The fact of the matter is that the mass immigration program long championed by Nick Reece has helped wreck Australia’s productivity.

First, Australia’s mass immigration model is crush-loading our major cities, stifling productivity through rising congestion costs, as well as encouraging growth in low productivity people-servicing industries and debt creation, rather than higher productivity tradables.

The infrastructure investment required to keep pace with population growth is also much higher cost than in the past, due to diseconomies of scale (e.g. tunnelling and land buy-backs), alongside government corruption in infrastructure selection.

Allowing employers to pluck cheap migrants in lieu of granting wage rises to local workers also discourages companies from innovating and adopting labour saving technologies, while preventing creative destruction by enabling low productivity companies to remain in business.

Indeed, Australia’s productivity slump has occurred alongside the massive lift in immigration from the early-2003, which speaks volumes:

Currently, there is no economic plan other than to flood Australia with hundreds-of-thousands of extra people each year to stoke overall economic growth (but not growth per person), to support big business (e.g. the property industry), and to prevent Australia from going into recession (despite growth and income per person stagnating).

Meanwhile, productivity and individual living standards are being eroded through rising congestion costs, declining housing affordability, paying more for infrastructure (e.g. toll roads and water desalination), environmental degradation, and overall reduced amenity.

Commentators like Nick Reece are part of the problem. But at least he has belatedly seen the light.

Leith Van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.