|RETHINK IMMIGRATION FOR A FAIR GO
Reserve Bank governor Philip Lowe told us last month: "We need to remember that once the virus is satisfactorily contained, all those factors that have made Australia such a successful and prosperous country will still be there."
Maybe. What about migration? More than half the nation's population growth since 2005 has come from overseas migration. High levels of immigration, especially skilled migration, helped sustain Australia’s 28 years of uninterrupted economic growth.
But COVID-19 has closed our international borders. Temporary migrants are going home. No new migrants are coming for the foreseeable future. Borders are likely to stay closed well after all other restrictions ease. When we re-open the borders — in six, 12, or 24 months – migrants will not return immediately.
While Australia's high level of migration played a key role in our economic prosperity, in recent years the shape and size of our intake has hurt many Australian workers, contributing to unemployment, underemployment and low wage growth.
The post-COVID-19 question we must ask now is this: when we restart our migration program, do we want migrants to return to Australia in the same numbers and in the same composition as before the crisis?
Our answer should be no. Our economic recovery must help all Australians get back on their feet, and to do that we need a migration program that puts Australian workers first.
Governments of all stripes have relied on high levels of migration to boost population to fuel economic growth. Arguably, at times this has been a lazy approach. Letting lots of migrants come to Australia is an easier way to drive economic growth than increasing productivity or investing in skills and training.
Australians can be proud of the role migration has played in our past. We are a nation built by permanent migrants – think of the Snowy Hydro scheme. But under John Howard, Australia started to favour temporary migration over permanent settlement, resembling more and more a guest worker nation.
Scott Morrison took this policy shift to its political conclusion. In a cynical move, Morrison capped permanent migration at 160,000 a year and claimed it as a “congestion busting” measure, but at the same time allowed temporary migration to soar to historically high levels.
Unlike permanent visas, temporary visas are uncapped. As at June 2019 there were 2.1 million temporary visa holders here. Australia hosts the second largest migrant workforce in the OECD, second in total number only to the US.
Temporary migrants make up a larger part of the labour market than most Australians might realise. Migrant workers don't just pick fruit: one in five chefs, one in four cooks, one in six hospitality workers, and one in 10 nursing support and personal care workers in Australia hold a temporary visa.
As economist Stephen Koukoulas pointed out before the crisis, there are 725,000 unemployed and 1,150,000 underemployed Australians who, with the right training, would love to have these roles. "It explains why wages growth is dead - too many temporary work visas for this stage of the economic cycle," Koukoulas said.
It’s not just the number of temporary migrants that affects wages. The Coalition's migration policies actually encourage employers in certain geographic areas and some industries to pay temporary migrants a much lower wage than what Australians would earn doing the same job.
Who we bring in matters too. The shift to temporary migration means that our migrant intake is younger and lower skilled than it used to be, and this does not help our kids as they join a labour market with 11 per cent youth unemployment.
Temporary migration does offer Australia some benefits. In some industries, such as cyber security, where we can’t quickly skill up enough Australians to meet demand, temporary migration can fill gaps in the short term. In regional areas, horticulture relies on temporary migration to supply a seasonal workforce.
As a result of COVID-19, Australia will soon have an opportunity to do something we have never done before: restart a migration program. When we do, we must understand that migration is a key economic policy lever that can help or harm Australian workers during the economic recovery and beyond.
We must make sure that Australians get a fair go and a first go at jobs. Our post-COVID-19 economic recovery must ensure that Australia shifts away from its increasing reliance on a cheap supply of overseas, temporary labour that undercuts wages for Australian workers and takes jobs Australians could do.
We must also ensure that regional areas don't only get transient people, but community members who will settle down, buy houses, start businesses and send their kids to the local school.
Last year Boris Johnson restricted low-skilled, temporary migration. The Conservative British Prime Minster told businesses to invest instead in productivity and skills to provide better jobs for British citizens. Coming out of the COVID-19 crisis, Australia can seize the opportunity to do something similar for our citizens.
We don't need to wait for the borders to reopen to begin this work. Labour market gaps will emerge when the domestic economy reopens but migration stays shut. The next few months present a great chance for business, unions and the government to come together to identify coming skill shortages, and deliver training and reskilling opportunities to Australian workers so they can fill those jobs.
Finally, there is a hefty Productivity Commission report on migration that was given to then-treasurer Scott Morrison in 2016. It lays untouched. The Coalition government has never responded to the report’s recommendations, including that Australia would be better served by a migration program that sourced more higher-skilled, permanent workers. It found that such a shift would add greater value and growth to the economy while also improving the budget bottom line.
While this report was written well before the COVID-19 crisis, many of its recommendations may be even more relevant now.
Australia is the most successful multicultural nation on earth. It can stay that way in a post-COVID-19 world, but only if our migration program changes and responds to the current economic crisis to support Australians to get back to work in secure, well-paid jobs.
This opinion piece was first published in the Sun Herald on Sunday, 3 May 2020.
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