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Let’s start with a question for keen political observers. Who said this?
“Net migration has trebled since the last election to a record high… net migration must come down.”
You could be forgiven for answering Peter Dutton.
In fact, it was a British Labour politician. Yvette Cooper, the UK’s shadow home secretary, has been dialling up pressure on the Tory government five weeks out from what’s being labelled the “migration election”.
The complaints from the Labour opposition over migration, however, are nothing compared to the pressure being piled on Rishi Sunak’s struggling government by Nigel Farage from the right.
The pro-Brexiteer changed his mind on not running this week, seized the leadership of his Reform Party, and announced he’s standing at next month’s election. His platform is to achieve “zero net migration” (without details of how it would be achieved). The conservative vote is set to splinter over the issue.
Meanwhile, the US presidential campaign is also focused on migration — whenever policy gets a look-in amidst Donald Trump’s courtroom travails.
Under intense pressure from his rival, Joe Biden tried to toughen migration rules via legislation in Congress only to be frustrated by Republicans who much prefer to keep the divisive issue alive, rather than find a solution.
The US president yesterday announced an executive order to “gain control of the border” without the help of Congress. It will effectively pause all asylum claims from those crossing the border from Mexico.
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A red-hot issue
Immigration is a red-hot issue in both the British and US election campaigns, fuelled by surging numbers of arrivals post-COVID, and anxious voters under cost-of-living pressure.
If the last six months are any guide, the Coalition is determined to make immigration a red-hot issue in the Australian election too.
Immigration minister Andrew Giles enjoyed a rare day of Question Time respite yesterday, but it won’t last. He remains in the opposition’s sights.
The minister didn’t help his own prospects of survival with his fanciful and ultimately untrue suggestion drones were being used to monitor former immigration detainees.
While much of the debate over the past week has centred on non-citizens with disturbing criminal records being allowed to stay in the country, the more substantial debate is over the size and make-up of Australia’s immigration intake.
To re-cap where things were left in budget week, Labor says it will halve net overseas migration from 528,000 last financial year to 260,000 next financial year.
Opposition leader Peter Dutton says he will drive that number down much further to just 160,000 in 2024-25.
After some confusion over exactly what the Coalition was proposing, Dutton this week bought himself some wiggle room over how such a sharp reduction would be achieved: “In terms of the composition of the program, well again, it depends on the economic advice at the time.”
Will lowering immigration have an economic impact?
So, what is the best advice right now on the economic impact of deep cuts to migration? Unfortunately, none of the senators at yesterday’s estimates hearing bothered to ask Reserve Bank governor Michelle Bullock.
During two hours of evidence, the governor adroitly navigated the usual politically loaded questions from senators about whether the budget was fantastic or the worst thing in the world.
None of the questions went to immigration. Perhaps no-one really wanted to know whether Michelle Bullock thinks slashing immigration will cause economic harm.
The governor has previously played down the inflationary impact of the post-COVID surge in immigration. Immigrants had certainly “added to pressure on the housing market”, Bullock said last month, “but on the other hand, they’ve added to labour supply.”
Overall, the governor concluded the recent record level of immigration “really hasn’t added dramatically to inflation, with the exception that it has put big pressure on the housing market and that’s obviously working its way out in rents”.
It was a nuanced comment. The record immigration surge has put “big pressure” on housing but hasn’t added much to inflation overall, due to the benefits of bringing in badly needed workers.
Yesterday’s National Accounts confirmed immigration has once again helped keep the economy in positive territory. Just. Growth of 0.1 per cent was recorded for the March quarter. Per capita growth came in at -0.4 per cent.
That’s now “five consecutive quarters of negative GDP per person growth”, as shadow treasurer Angus Taylor pointed out. He wouldn’t say whether a dramatic cut to immigration would therefore drive Australia into an actual recession.
That’s exactly what business groups fear will happen if the Coalition cuts as deeply as it’s suggesting.
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Treasurer Jim Chalmers, by contrast, says Labor’s more modest immigration cuts are “responsible” and “thoughtful”. The economy might be only crawling forward right now, but Chalmers remains confident immigration can be driven down without smashing growth entirely.
It’s a risk, if not as great as the one being taken by the Coalition with its plan to go significantly further in cutting the number of students and skilled workers allowed into the country.
The impact on the economy appears to be a secondary consideration. The politics of a tough line on immigration are simply irresistible in Australia, just as they are in the US and UK.
David Speers is national political lead and host of Insiders, which airs on ABC TV at 9am on Sunday or on iview.
