immig research

Old Mar 2nd 2002, 2:24 am
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Default immig research

Rush to populate or perish the thought
Author: Jennifer Hewett
Date: 02 Mar 2002
Words: 1841
Publication: Sydney Morning Herald
Section: Business
Page: 46

Experts are divided on the cure for an ageing nation, reports Jennifer Hewett. Visyboard's Richard Pratt sounded particularly passionate as he addressed a lunchtime crowd at the Population Summit held in Melbourne this week, arguing that Australia had to lift its immigration levels for its own economic survival.
Having arrived in Australia in 1939 as a four-year-old fleeing the disaster in Europe, Pratt had obvious personal reasons for the intensity of his views. ``Our family too was probably seen by many as a bunch of reffos," he said. But he insisted that his argument was also based firmly on national interest grounds because higher immigration is crucial for the Australian economy and for the continuing vitality of Australian business. ``In a world where free capital flows are considered essential to the creation of the developing knowledge economies, much freer people flows are becoming inevitable," he thundered. ``We can be pro-active and move to ensure our share of those knowledge worker flows. Or we can be passive and wait for something to turn up ...
``For Australia to pretend that we can continue our present low level of immigration intake as if we are indeed `home alone' on the planet is, at best, naive. At worst it's self-defeating."
Pratt's beliefs are widely shared in Australian business circles. From individuals like James Packer to organisations like the Business Council of Australia, the demand for higher immigration is consistent and increasingly vocal. But until recently, it has met with a deafening political silence. Neither Labor nor Liberal has wanted to make an issue out of higher immigration in the past few years, fearing community antagonism would again be stirred. They certainly didn't think it was worth the political hassle to mount any arguments in favour of the benefits of a big jump in immigration targets. Then along came the ship Tampa and the entire issue was subsumed in the ferociously bitter argument about refugees. Any sensible debate on immigration was another of the casualties. Now that the frenzy of the election is over, however, a few more people are popping up their heads again to look more than a few months ahead. The Population Summit attracted an unlikely crowd of senior business leaders, politicians, demographers, environmentalists, union leaders and academics.
At least for the Labor party, the political mood seems to have changed a little, no matter how much NSW Premier Bob Carr worries about the environmental impact and Sydney's continued sprawl. Both ALP leader Simon Crean and Victorian Premier Steve Bracks talked enthusiast- ically about their support for higher immigration. ``Doing nothing gives us precisely the population policy we don't want an ageing and declining society concentrated in a limited number of sprawling cities,"Crean said. But the ALP leader still said it was obvious to everyone that support for the immigration program was under strain and made it clear he thought of any increase as a long term goal. The bulk of the environmental arguments also seems to have shifted from advocating actual population decline to reducing drastically the environmental impact of Australia's current or even an expanded population. In the end, though, the main focus was back to business and economics, and for good reason. Underneath all the rhetoric, there remains a basic disagreement about the economic benefits of sharply increased immigration as well as its effect on the ageing of the population. Resolving this seems crucial for developing a policy that relies on facts rather than prejudice. But don't expect any real consensus among the experts on that either.
What we do know is this. Australia is growing at about 1.2 per cent a year. It had a population in June 2000 of 19.2 million people, of whom 23.6 per cent were born overseas. That incidentally is about the same percentage of the population born overseas as it was in 1901. Everyone agrees that large scale immigration was of huge benefit to Australia over the past century, particularly in the post-World War II period. What to do about the next century is far less certain. But some demographic figures seem alarming. The present working age population grows by about 180,000 a year. From 2020, it will grow by less than 140,000 over the whole decade. The present six working aged persons per one aged will become three by 2031. Few people are arguing for a big increase in the unskilled immigrants category. Although the US economy has benefited from a huge and continuing influx of lower skilled immigrants, largely illegal and from Mexico, the society is also willing to pay them very low wages at least initially. The situation is very different in Australia.
That means general support for the Howard Government's decision to increase the percentage of immigrants in the skilled category and to make it easier for business to hire in skilled workers on special long-term visas. Immigration Minister Phillip Ruddock shies away from giving population targets but says that on present trends, the population should stabilise around 24 to 25 million by mid century and that this is perfectly sustainable on social, environmental and economic counts. But business leaders are not the only ones to take a far less sanguine view.
Consider, for example, the position of Professor Ross Garnaut, an economist and academic from the Australian National University and someone hardly prone to dramatic exaggeration in his pronouncements. He talked at the conference about the problems facing rich countries now experiencing low increases and soon rapid decline in their labour forces caused by the combination of low fertility and low mortality rates. `Some of the countries with declining and ageing populations will do better than others, but for the most part the economic stresses of demographic implosion will be associated with relatively low levels of productivity growth,"he said, ``as it is the relatively young who absorb most quickly and thoroughly new knowledge and who contribute most to innovation and structural change ... ``The exceptions will be a small number of rich countries which have come to define their nationality in terms of the quality of their institutions and values rather than ethnicity and race, and more generally, which have the capacity to absorb high levels of immigrants from many parts of the world." He put the US and Canada in this group but raised doubts about Australia's chances of remaining in it, given the ``ambivalence about large-scale immigration and ethnic diversity that has been politically prominent since the mid 1990s".

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Old Mar 2nd 2002, 2:25 am
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``If we do nothing and immigration levels remain about where they are now, I fear the country as a whole will begin to feel a little like Hobart feels," he said. ``Some people will like living in a declining, ageing community but our energetic young people will vote with their feet." It was arguments like this as well as environmentalists arguing for a big decline in immigration numbers that seemed to particularly annoy one of Australia's most prominent demographers, Professor Peter McDonald, whose work has had a a big influence on the Howard Government.
Professor McDonald insisted that at least half the figures the conference had heard from earlier speakers were nonsense and that the crucial factor would never be immigration but the declining fertility evident in most Western countries. In Australia, that fertility figure is now just over 1.7 children per woman, which is not as low as many countries in Europe and Japan but still falling. Professor McDonald's main plea was for a big increase in financial and other support for mothers so they were no longer so discouraged from having more children. The effectiveness of such programs is another matter of strong disagreement worldwide.
But in terms of immigration, his argument was that for all the dramatic talk, any feasible level of immigration would have only a marginal effect on this inevitable demographic trend, especially past the first 100,000 immigrants a year. That is largely because immigrants eventually tend to mimic the population as a whole, both in terms of getting older themselves and having fewer children. Given that Australia is averaging around 90,000 to 100,000 in net overseas migration, that view would undercut the calls by business for big increases as the answer to ageing.
McDonald and others also argued that the decline in the labor force that is about to hit us would be more effectively countered by an increase in the participation rate rather than dreams of large-scale migration. Bob Birrell, another ANU demographer, said that it meant that business would no longer have the ``whip hand" in dealing with employees and would make more effective use of older workers in particular. Another influential economist who specialises in population issues, Professor Glenn Withers, also of the ANU, is far from persuaded by such figuring. He certainly agrees with the proposition that falling fertility and mortality rates are the driving factors in this ageing of the population. But he maintains that higher levels of immigration would still have an important effect in retarding this. `Over the long term, even slowing down the ageing process a little bit can have a sizeable impact on the budget," he said, citing the fact that on present trends, the percentage of the population aged over 65 is expected to double from 12 to 24 per cent in 50 years.
Slowing that change to around 19 or 20 per cent would save about $25 to $30 billion a year in public outlays," he said.
``That buys a lot of money for the environment.
``And just because that effect on ageing becomes less efficient over 100,000 immigrants a year, it doesn't mean the impact stops being beneficial altogether. `Even upping the numbers of immigrants by about 40,000 a year would mean another three to four million people in 50 years. That's fairly significant."
This means he favours gradually increasing the level of immigration by basing it on a given percentage of the population 1.25 per cent rather than absolute numbers, to enable immigration seamlessly to take up more ground as the natural population increase falls away. ``It's not a complete answer and should be part of a broader package of measures that do include enhanced labor force flexibility for older workers and improved family support policies." he said. `But growing immigration is still an essential part of combating the costs of the ageing population as well as having direct benefits for generating a more dynamic economy." =The amount of those direct benefits on the economy is also a matter of debate. According to Pressor Withers, such benefits include the idea that immigrants are likely to bring in more foreign capital, that they will have links to other communities which help create beach-heads for Australian exports and that they will encourage more innovation and new ways of thinking. Richard Pratt and most of business would clearly agree. Convincing the public especially without unanimous political support may be harder.
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