I have an op-ed in the AFR dealing with Tony Abbott’s comments about immigration and housing prices.
Populism is being mainstreamed in Australia. At a book launch former prime minister Tony Abbott set out an aggressive populist agenda for Australia – presumably a second Abbott government. Abolish the renewable energy target, abolish the Human Rights Commission, cut spending, reform the Senate, and cut immigration.
This from a man who couldn’t amend a single section of the Racial Discrimination Act while PM. A man who increased taxes. A man whose government set the current renewable energy target. Good luck with that.
More concerning, however, is the increased antagonism towards immigration. To be sure, there is much to dislike about immigrants. I have loathed migrants ever since I became a citizen myself. They take our jobs, live in our houses, marry our women, deprive our children of jobs, and speak with strange accents. Most immigrants have the temerity to integrate into Australian society and come to think of themselves as being Australian!
Now Tony Abbott wasn’t as crude as that in his call for restricted immigration but many would nod in approval while thinking those, or similar, thoughts. The official line for restricting immigration is to reduce house prices (at least until housing starts pick up). As if most new migrants to Australia could afford to buy a house upon arrival.
Abbott accuses the federal Treasury of having a “big is best” mode of thinking. Quite right. Most economists support free trade and have done so since Adam Smith. Economists understand that more trade leads to improvements in our standard of living and greater prosperity. This is the basis for promoting international trade.
What many people don’t seem to realise is that domestic trade is good for prosperity too. We can trade with foreigners across international borders, or we can trade with immigrants right here at home. The case for free trade – an argument Abbott knows well – is also the case for immigration. We are better off when goods and services cross borders and when people cross borders, too.
International trade and immigration are not substitutes, they are compliments.
Arguments in favour of immigration usually emphasise diversity, food choice, and the like. These arguments are true, but trivial. The benefit of immigration comes from the fact that immigrants increase the size of the market.
Immigrants don’t just increase demand for Australian goods and services, they also increase the supply of Australian goods and services. This is especially so given the fact that Australia’s immigrant intake is skewed towards skilled migrants. People who are likely to quickly gain employment, start paying taxes, and making other contributions to Australian life.
A restriction on immigration is a restriction on economic prosperity – much like increased taxation.
If Abbott truly believes that housing starts are lagging population growth he should focus his attention on supply side barriers to entry and not on restricting the demand side of the economy. That means lowering taxation, cutting red tape, cutting green tape, and forcing the states to do so, too.
Sinclair Davidson is a professor of economics at RMIT University, a senior fellow at the Institute of Public Affairs, and an academic fellow at the Australian Taxpayers’ Alliance. He is an immigrant to Australia.
The usual pathetic excuses are being rolled out on social media.
@FinancialReview I don’t think most Aussies have an issue with people who come to Australia legally + accept Australian law and way of life
— Morks Brick (@Bricklesss) February 25, 2017
Silly & misleading article
Paragraph nine is the crux
I haven’t heard anyone say “Stop importing skilled migrants”
— Mauler (@HooGraham) February 25, 2017
I often hear this sort of argument – “We’re not talking about migrants like you”. Oh no, it’s the other sort of migrants, apparently, that are driving up house prices.
Let’s roll the tape on what Abbott actually said:
If we end the “big is best” thinking of the federal Treasury, and scaled back immigration (at least until housing starts and infrastructure have caught up), we can take the pressure off home prices.
As far as I can work out he is calling for a reduction in all immigration to Australia. Now I find arguments that we should restrict immigration from certain parts of the world due to national security concerns unconvincing, but they are, at least, prima facie plausible. The notion that we should restrict immigration because of housing prices is complete rubbish.