The Abbott Prescription

abbott long IIAustralian politics is at a low ebb for many reasons but one is our tendency to tell other people how to do their jobs rather than to get on with our own.

A classic instance was the Queensland premier’s recent demand for a national approach to anti-bullying in schools. But unlike Queensland, the federal government does not run a single school. And only in a debauched political culture would it be up to government – rather than school principals, teachers, parents and, in very severe cases, the police – to tackle bullying in the playground. This was an obvious and particularly crass case of virtue signalling: the Queensland premier wanted credit for being against bullying without actually doing anything at all to deal with it.

Another instance is the federal government’s National Energy Guarantee. It sounds wonderful. Both prices and emissions will fall and the lights will stay on. We just have to rely on the experts at the Australian Energy Market Operator and at the Energy Security Board to tell us how it’s done.

Now, none of you came here tonight to hear slogans like “stop the boats” or “scrap the tax” or “build the roads” – let alone “build the wall” or “drain the swamp” – but I’m sure you’d prefer to hear how your everyday issues might actually be addressed, rather than get much-ado-about-process, or buck-passing and blame shifting to another level of government.

Listen to just about anyone in authority these days and this is what you’ll hear — a lot of glib talk that boils down to saying: ‘We’d like to fix this problem but it’s very complicated and if nothing changes it’s someone else’s fault.’

All too often, it seems, the people charged with sorting out our difficulties don’t have to suffer them; or, at least, not to the same extent as the general public. It’s easy to be relaxed about green-scheme-driven price hikes when you’re on a big salary. It’s easy to dismiss street crime when you live in an up-market suburb and don’t have to use public transport or drive long distances for work.

Hence the insiders-versus-outsiders chasm now bedevilling the politics of the West: a talking class that’s never had it so good; a working class that’s trying harder and harder just to keep up; and a welfare class with a strong sense of entitlement.

There is something fundamentally wrong when a country with the world’s largest, readily available reserves of coal, gas and uranium has some of the world’s highest energy prices; when a country with so much space has big city property prices rivalling London and Hong Kong; and when some of the world’s best-funded schools have test results on a par with Kazakhstan.

To be Australian is still to have won the lottery of life. We have so much going for us. But again and again we have allowed green religion, a largely misplaced sense of guilt, and a chronic aversion to giving offence to cripple our public discourse; to the point where we go round and round in circles rather than make changes that really will tend to get wages up, power prices down and traffic flowing again in our big cities.

How can the world’s largest exporter of coal, for instance, have let political risk make the construction of new coal-fired power stations all-but-impossible? Our emissions obsession has made coal taboo, so policy makers pretend that a combination of wind and gas generation can keep the lights on and prices down even though most states are making further gas production almost impossible.

But my main concern tonight is another topic, no less taboo, lest anyone be upset or comfort be given to the racists supposedly in our midst, namely the rate of immigration. I first raised this early last year, have been looking for a chance to say more ever since, and am pleased that I’ve finally been able to take up the Sydney Institute’s invitation to speak.

As someone born overseas, I could hardly be against immigration. From our beginning in 1788, modern Australia has been an immigrant society. Immigration is at the heart of who we are. The fact that so many millions have come here to build a better life, originally from the British Isles but then from the four corners of the earth, lends a heroic dimension to our national story.

Late last year, I went to an aged-care Christmas party in my electorate. In the traditional costumes of their homelands, for their patients the staff had put on a concert. Their pride in Australia and their gratitude was as palpable as the service that these new Australians were rendering to the old.

While a former PM was talking policy and hard choices, the man who knifed him
wore a supercilious grin as his wife prosecuted their vendetta on
60 Minutes.
Skip to the 10.40 mark for some of the bitchiest observations since the last
squadron of Mardi Gras drag queens sailed down Oxford Street.
— rf

So making immigrants feel unwelcome in their own country is the last thing we need. Immigration has been overwhelmingly and unquestionably good for Australia; as well as good for the immigrants who have voted with their feet to live here.

immigration chartMy issue is not immigration; it’s the rate of immigration at a time of stagnant wages, clogged infrastructure, soaring house prices and, in Melbourne at least, ethnic gangs that are testing the resolve of police.

It’s a basic law of economics that increasing the supply of labour depresses wages; and that increasing demand for housing boosts price. Such is the unreality of our political discourse, though, that amidst great concern about unaffordable housing and stagnant wages, no one on the front bench of government or opposition had been prepared to raise the one big contributing factor that is wholly and solely within the federal government’s control – until Peter Dutton finally said last week that immigration could be cut “if it’s in our national interest”.

Instead, federal politicians have demanded that the states boost housing supply; we have urged employers to lift wages and even promised company tax cuts – Senate permitting – to make this more affordable. But the one policy lever that is least subject to interference by the states or by the senate remains strangely untouched.

It’s the federal government that sets the annual quota for how many permanent entrants will come in the “skilled”, “family reunion” and “refugee and humanitarian” categories. It’s the federal government that sets at budget time an annual migration target. It’s the federal government that sets the rules governing two and four year visas for the foreign workers that businesses say they need. And it’s the federal government that sets the rules governing the overseas students that universities want with the right to live here and then work towards professional qualifications in this country.

Migration, you see, isn’t just the number of permanent visas granted in any one year. It’s all the newcomers looking for jobs and housing and that includes many on business and student visas too.

Prior to 2003, the number of long-stay business visas never exceeded 40,000 a year. Since 2007, it’s mostly exceeded 100,000.

Prior to 2005, the number of overseas student visas never exceeded 200,000. Since 2007, they’ve always exceeded 250,000 and often 300,000.

What this means is that the figure for Net Overseas Migration (or the extra people looking for housing and jobs) that had averaged 110,000 a year in the decade to mid-2006 has doubled to 220,000 a year in the decade since – peaking at well over 300,000 under the Rudd prime ministership. These are by far the highest figures in our history.

Even at the old rate to the mid-2000s, on a per capita basis, our immigration was still about the highest in the developed world. At the subsequent and current rate, every five years, we’re letting immigration alone increase our population by about the size of the city of Adelaide.

Just 16 years ago, in the first Inter-generational Report, it was expected that our population would not reach 25.3 million till 2042. But due to current immigration levels, we’re going to achieve that figure next year – or 23 years early.

immigration poster 1947 IIISo far, our main strategy to cope has been urban infill: putting more and more people into suburbs whose schools are full, roads are choked and public transport over-crowded.

Now, over time, a bigger population has benefits, with a larger and more dynamic economy. Over time, highly skilled migrants should increase productivity in ways that lead, eventually, to more jobs and higher wages. In the short term, though, more competition in the labour market puts downwards pressure on wages and makes it harder for any individual to find work. In other words, what should be good overall in the long run can be quite hurtful in the short run.

Australia’s relatively subdued economic performance over the past decade is due to post-GFC headwinds, the fading of the China boom, more competition from third-world-countries-with-first-world-technology, disruption to established industries, and our own home-grown policy follies such as the carbon tax.

It can’t be pinned on too many or the wrong type of migrant. Indeed, high immigration has been a factor in Australia’s record-breaking run of aggregate economic growth because each new worker adds to our economy – but behind the reassuring overall figures, growth-per-person tells a different story. At just 0.9% over the past decade, annual economic growth per person has been anaemic, compared to 2.4% during the Howard years, when immigration was much lower.

Over the decade to mid-2007, 2.1 million new jobs were created while net overseas migration totalled 1.2 million. In the next decade, by contrast, just 1.8 million new jobs were created while net overseas migration almost doubled to 2.2 million. So it’s not surprising that, for much of this time, jobs have seemed harder to find and that more and more foreigners seemed to be filling them.

If a high-end restaurant needs an executive chef, or if a university needs a world-class quantum physicist, or if a bank needs a new CFO, it might make sense to recruit someone from overseas on a high salary; and it’s good when people making a big contribution opt to stay here. But are we really so short of willing and capable workers that backpackers must pick our crops, overseas students serve our tables, and recent migrants run our IT?

Very possibly Australians are too fussy about the jobs they’ll do, or even whether they’ll work at all given the availability of don’t-ask-questions welfare. But if it’s hard to find café or cleaning staff, maybe higher wages would help and maybe the welfare rules should be better policed. If it’s hard to find programmers, maybe companies need to do more training. And if no decent managers are available, maybe their pay might have to be increased – because that, after all, is how markets should normally work.

immigration 2018 IISkilled occupations eligible for two- and four-year visas currently include accommodation managers, accountants, advertising managers, agricultural technicians, air-conditioning mechanics, aircraft engineers, animal attendants, arborists, and art teachers – and that’s before proceeding beyond the first letter of the alphabet! With more than 400 occupations on the list, there are few jobs that can’t be filled by foreigners when locals don’t find the wage attractive.

Of course, people who come to this country to work and pay taxes from day one undoubtedly make great Australians, should they stay. But should it really be so easy to fill jobs from overseas rather than offer the better training or higher wages that locals want?

It’s hard to avoid the conclusion that temporary skilled visas have been a factor in allowing Australian business to neglect training and to keep wages down. You can hardly blame them given the compliance burdens and sky-rocketing costs they face, but it’s not a smart long-term way to keep a high-skill, high-wage first world economy.

Since the late 1980s, Australian house prices have been rising at well above the rate of inflation. Much of this is due to lower interest rates enabling buyers to pay more without increasing their repayments. But especially in the past decade, higher immigration has boosted demand and factored into price. Almost half a million new dwellings have been required over the decade just to meet the increase in net overseas migration.

Then there’s the integration question. As the head of the Menzies Research Centre observed last week, “something has gone badly wrong with our resettlement system when 58% of refugees who have settled here in the past ten years are living on welfare”. With no insistence that refugees learn English, it’s hardly surprising that only 30% of the last decade’s intake are proficient; but without the national language how can newcomers ever really find a job and fully integrate into our way of life?

Again, let me stress, I want a stronger Australia; and, over time, that should be a bigger Australia. But no Australian government should put the well-being of potential incoming migrants over that of the existing population. The programme has to be managed primarily in the interests of today’s Australians, not primarily in the interests of those who want to come here despite the contribution that many could undoubtedly make.

My government oversaw a decline of about 30,000 in annual net overseas migration. As well, we toughened up the rules against foreign purchases of existing residential properties – and actually enforced them for the first time – to give locals a fairer go in the housing market.

We began the biggest boost to roads in our history (with public transport included via an asset recycling programme with the states) in order to tackle a 30 year infrastructure deficit as quickly as possible. Taxes and regulations were cut to boost the economy and facilitate higher wages for Australian workers. And stopping the boats meant that the Australian government, not people smugglers, was once more running the humanitarian intake and we could prioritise persecuted minorities like the Christians of the Middle East.

But since then, net overseas migration has again edged up. And wage growth is still low, housing is still out of reach for young Australians, congestion is getting worse, and gang violence in Melbourne shows no sign of abating – so we need a rather bigger reduction now than we were able to deliver then.

citizenship papersThere’s no reason why we must maintain the additional humanitarian immigration for the Syrian war that’s now winding down, or maintain that negotiated as part of a Senate deal. There’s no reason why we shouldn’t insist on fluency in English as a requirement for citizenship, as the government is doing, or further revise “temporary” skilled immigration to require higher pay, higher skills and more effort to find local workers first.

At least until infrastructure, housing stock, and integration has better caught up, we simply have to move the overall numbers substantially down. A strong migration programme in the long term doesn’t preclude a smaller one in the short term especially when there’s acute pressure on living standards and quality of life.

The Howard government cut migration numbers by 30% in its first two years. Of course, it would be unfair to would-be immigrants and would-be employers of skilled staff to change the rules for people already here or currently in the visa pipeline. Managing the overall numbers down to the old long-term average of 110,000 a year would inconvenience some businesses but that’s hardly unreasonable if it helps wages to grow more strongly and makes homes more affordable.

In order to win the next election, the government needs policy positions which are principled, practical and popular. And if they also outrage the Labor Party, so much the better!

Scaling back immigration acknowledges that government’s first duty is to its own citizens. It would be an act of the executive that doesn’t require tortuous negotiation with the states or the Senate crossbench. And since when is a democratic government required to ignore voters who would overwhelmingly prefer less immigration to more?

This could have been tackled sooner; so I do hope that Minister Dutton’s hints last week might quickly become a welcome change of scale.

This address was delivered at the Sydney Institute on the evening of February 21, 2018.

14 thoughts on “The Abbott Prescription

  • brian.doak@bigpond.com says:

    Better late than never Tony!
    One hopes non-preferential refugee numbers can be scaled back as the latest cohort seem to prefer welfare to mastering English and working.

    Family Reunion is an endless chain classification as Donald Trump has articulated but it is often defended by Labor in office.’Family Reunion’ is scarcely used to emigrate from first world countries but is adopted with alacrity by those from the third world who are most likely to vote for the welfare party in their new county if given citizenship promptly. Hence, Labor Party members get elected in most of the Muslim electorates.

  • mags of Queensland says:

    There are several points I would like to raise concerning these issues.

    Firstly, it is too easy to get Australian citizenship.No new arrival should be eligible for citizenship until they have been here at least five years and have attempted to learn the language, find a job or made some contribution- such as volunteering- to show their good faith.

    Secondly, we herd these people into our major cities instead of sending them to regional areas who could do with the extra population and where immigrants would have more chance of getting a job and becoming part of a community.

    Thirdly, a time limit should be set for new arrivals to receive benefits. If there was a time limit there would be more incentive to find work. As a nation we cannot afford to keep importing welfare recipients, we already have enough of our own.

    Fourthly, cities like Sydney and Brisbane are getting uglier by the day with the proliferation of high rise and endless motorways
    The drain on resources is mind boggling. Lord knows what they will be like in ten or twenty years time. Successive governments have failed to plan for the future regarding water and power supply, transport, health and education needs.

    Every year State governments want more and more money for education and health but seem to spend less and less on these items. So we get Gonski – you kn,ow we borrow billions of dollars to compensate State governments for not doing their jobs.

    Every year we allow billions of litres of water to flow out to sea instead of building dams for present and future water needs. We sell our coal, oil and uranium to other countries but invest nothing to ensure that we have reliable, affordable power for all consumers.

    Let’s face it, our governments aren’t worth feeding. They will never bite the bullet and make decisions that might be unpopular because the handouts might have to be curtailed.

    • whitelaughter says:

      good post – frankly more on message than the original article. Agree with the lot; I’d also say that the whole ‘family reunion’ shtick should be dependent on the resident immigrant being a lawabiding taxpayer.

    • Bwana Neusi says:

      Regarding your first point, mags, Citizenship should not be available until all welfare received has been repaid in full and competent command of English a prerequisite.

  • brian.doak@bigpond.com says:

    Disenchanted conservatives spin off to One Nation the party that has been opposed to the massive Rudd-Abbott-Turnbull immigration deluge and the Abbott Middle East refugee increase. If the Lib/Nat coalition could be expanded to include One Nation [now that George Brandis has been induced to walk] then they will have the numbers to displace a predictable Labor Greens deal.

    The Libs and Nats will have to be humble enough to swap preferences with One Nation and strong enough to rebut polemic from the 3 stooges –
    Labor and Greens and Xenophon; and rebut the mouthpieces of the 3 in the ABC and Fairfax.

  • Jody says:

    The modern face of Australian immigration is now a black shroud with slits where the eyes appear and no discernible gender. It is violence, rage, anger, lack of integration, failing infrastructure and loss of quality of life in urbanized culture. Needed to speak up much earlier about this; too late now. The horse has bolted. When I watched “The Godfather” again on Sky yesterday and its somewhat sentimentalized rendition of the Mafia, I realized that America’s NON-DISCRIMINATORY immigration policy of ‘bring me your huddled masses’ had a dark, violent and undesirable underbelly which still isn’t cleaned up. Since then we have learned ZERO. Instead of providing a critique of open borders and ‘huddled masses’ we have all been silenced by the Thought Police. Should have spoken earlier.

    • exuberan says:

      The Merkerl experiment in Germany is perhaps a better example of immigration gone horribly wrong. Western Europe is now irrevocably on course to becoming ‘Eurabia’. Yes the Italian wave of immigration brought with it an undesirable underbelly. But as far as I know, they never flew jet airliners into buildings or drove trucks into innocent pedestrians.

      • Jim Kapetangiannis says:

        I didn’t know that Chopper was Italian…learn something new every day!

        • Jim Kapetangiannis says:

          Jokes aside, you are right about “Eurabia” and though it is early days, the seeds of Europe’s demise have been sown by European politicians without regard for the native populations. The same is happening here but as usual, at a slightly slower rate because of our distance from the sources of this new immigrant wave. Already, our courts and our traditions are blatantly disrespected and it won’t be long before we have our own Charlie Hebdo’s or Moscow or Paris theatres.

          Tony Abbott needs to hold strong. When democracy begins to fail, as it is in Australia, the only alternative is an increasing totalitarianism. Our politicians are either so perverted by their passionate hatreds of this one man, that their ability to reason and think is severely diminished. The best they can do is roll out the opinions of “experts” (what was that old saying; an unknown quantity and a drip under pressure) to reassure us that all their studies show that abnormally high immigration (compared with all our major competitors) have increased our GDP. Now if you travel 1.5 – 2 hours to work in Sydney and Melbourne, five (and for some more) days a week, pay tolls for the privilege and even then can barely afford to put a roof over your head, let alone clothe and feed yourself, I presume you are meant to be “thankful” that our GDP has grown.

          The whole attack on Abbott has been emotional which says more about the attackers than the attacked. Ministers of the government attack Abbott because they fear him. Why do they fear him? Because he’s right!! Has Billy Boy Shorten said anything about the immigration debate? Has Tanya Gonebeserk said anything? I haven’t seen anything in the press and I’m sure it’s because they know that Abbott is telling the truth. Their constituents are telling them exactly what I have said above. They travel miles and hours for work. Cheaper recently arrived workers take their jobs or force them to compete on price rather than the quality of their work and the cost of living continues to go up while their wages and fees stay stagnant. I’m no academic expert but I do deal with these people at the “coalface” (no pun intended – it still exists metaphorically)and no argument like Treasurer Morrison’s comments about “blows to the budget” or that drip from ANU talking about optimal immigration above 160,000 per annum is going to change what people experience day by day. In any case, linking economic growth with immigration is a very specious argument. China has one quarter the population growth rate of Australia yet it’s economy grows four times faster (that’s right – 400%)! The same for India; the same for our peer economies like Singapore, the UK (which has only one third of Australia’s population growth but has a GDP growth 12% higher, 2016/2017), the US, Sweden etc. etc. Japan which is actually experiencing severe population decline, has for all practical purpose no immigration at all had GDP growth 23.5% greater than Australia’s and it’s long term average was close to double Australia’s even while it was suffering population decline.

          My point is that sheer numbers will not make us better off. Alternative explanations for GDP growth can be found in such things as the quality of education of the workforce (e.g. Singapore, Hong Kong and China) or the take up and use of cutting edge technology (Japan & the US). A “big” nation is by no means a “smart” nation. We can be richer if we concentrated on being smarter rather than just bigger (which probably means sacking 95% of our current academics and starting a recruitment drive in Asia and Eastern Europe).

          Enough for now. All credit to Tony Abbott for having the courage to start the debate we had to have. He is living proof that people can “grow”. It’s not “hypocrisy” to move on from previous positions. It requires humility and a willingness to say “I was blind, but now I see”. Who among us in our little community of opinion writers have not had this experience? We can’t call him names for telling the truth!

          There is an old saying that some will appreciate and some will dismiss;

          “God resists the proud but gives grace to the humble”.

          Ministers of the Crown beware. Your pride will be your undoing. The people are hardening in their detestation of you and you can’t seem to break through. It is one of the ironies of life that the pauper in exile can be made a prince!

          • dsh2@bigpond.com says:

            I was going to write along the same lines as Jimbob so won’t rehash his well expressed opinion other than to say that Abbott has been pretty consistent in his advice for many years. When you see and hear the ill-informed knee jerk reactions from his colleagues, you can understand the difficulties he had as Prime Minister. His is the voice needed by this country if we are to climb out of the fiscal and social calamity our present leaders are taking us into.

    • Keith Kennelly says:

      Jeez Jody

      You need to read more widely.

      American immigration after World War Two was strictly controlled.

      All immigrants from Europe were held in an island camp off New York. There they were processed.
      50% of those seeking entry to the US were sent back to Europe.

      American immigration policy does descriminate and, except for the Clinton, Bush and Obama years, has done since at least the 1940s. For over 70 years.

      I’m not sure how it was controlled before that, but I’m quite sure it was an orderly system.

      Trump is returning the policy to those times of control.

  • ken.harris@exemail.com.au says:

    I was in the audience about 3 metres away when he made this speech. I looked him in the eyes as he spoke.

    The Libs are nuts for sticking with low wattage Mal. Abbott’s personality and character shone like a searchlight.

    He’s a decent person, a good thinker, modest, and you can understand what he says. His answers to questions were intelligent, direct and moderate. He’d slice Shorten day by day until only the rind was left. Ministers shouldn’t be frightened of him: he’s got the strength to carry them over the finish line. Of course, their being lightweights helps. They’ve got some good people coming up but they need to get out of nappies first.

    Oh, and I liked the speech, too.

  • Julian says:

    I was extremely happy with Abbott’s views and pronouncements – they essentially mirror my own.

    ‘Tis also a damn shame that the government has no other economic (nor, as no doubt follows, social) policy than essentially tipping 1000s of people into mainly Melbourne, Sydney and SE Queensland every month in order to keep people employed in a ponzi economy of house and apartment (and subway 🙁 ) building (by moronic tradies) and useless short-term service jobs flipping burgers at, as Mark Steyn say, the Quicki-Crap.

    And, obviously the existing residents can be damned. (Goes to show how bloody short-term and horrible it is as well, when according to the economic indicators the transformation of the Northern end of Melbourne’s CBD into something resembling Shanghai is stated as an economic benefit, yet it has destroyed any kind of grandeur, beauty, livibility and cohesion it once had – here’s a radical idea: just don’t import people in the first place so you don’t have to build a new metro nor destroy the city.

    Dutton’s (and remember Howard’s view too) of having mass immigration for economic growth but trying to hold it all together socially via symbolic nationalistic gestures (e.g citizenship pledges and anthem singing) is also bound to fail – why? Natural right. Anyone who had read Bloom, Strauss etc will realise that one is loyal to one’s own and that this imagined integration and assimilation will never come. E.g. one tends not to see a Korean, a Finn, a Bolivian, a Nigerian and a Sri Lankan all sitting down together over lunch – ‘it all tends to be tribal.

    Australia circa 2100 will not be a nice place – it’ll be an outgrowth of Asia, (no doubt Paul Keating’s ghost will be happy) probably run by the Chinese, and we will then be the poor White trash of Asia as LKY famously predicted. Sure, there’ll be an Islamic issue, but the Chinese-descendants running the place will probably crush it (something we are too liberal and idiotic to do) as they do in places like Xin Jiang in Western China.

    And, it’s all a damn shame – and we’ll probably look back to about 1972-5 as the time when we started to throw it all away. “Tis a shame – W Europe will no doubt be Islamised (their demographic issue is worse than ours) yet, places like Japan, and, hopefully Eastern Europe will still be more or less the same, and as harmonious as human societies can get, all b/c they didn’t go down the idiotic multi-culti, road espoused by the moronic naive Leftists and the selfish, and narrow-minded right-wing immigration-led economic growthist economist types.

  • Alex sagin says:

    Mr Abbott, very good speach, but what’s the plan?

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