Skip navigation

Migration is our ‘special sauce’, so let’s be rational about it

Migration is our ‘special sauce’, so let’s be rational about it

This piece was originally featured in the AFR - view here. 

We should be honest about failed housing policy, thoughtful about changing the international student mix, and not shunt blame onto migrants.

Allegra Spender Member for Wentworth

The stage has been set for migration to be a major battleground.

This is a hard debate, as people are hurting, housing is a problem, and migration is high. But migration has been a secret sauce to Australia’s long-term economic success. We need to chart a careful path in balancing three priorities – housing, our higher education system and the broader economy – while retaining social cohesion. Sadly, the politics has turned toxic already.

Peter Dutton’s migration policy is extremely unclear and on the face of it, could be economically very damaging.  Alex Ellinghausen

The challenge is that net migration has surged to over 500,000 last year, and we didn’t expect that. While the numbers are projected to almost halve this year, there is understandable concern about the real impact on rental costs, when supply isn’t keeping up.

But let’s be honest. Migrants are not the driver of rental stress – it’s the failed housing supply policies of successive local, state and federal governments, as well as our shift to fewer people per dwelling. Our current population estimates are similar to those projected pre-COVID. But decades of poor housing policies mean we just aren’t ready for our rising population numbers or our changes in behaviour.

While migration can be a limited short-term lever, pulling it hard has significant costs and can distract from the laser focus we need on increasing housing supply and intergenerational equity.

Our priorities need to be stronger federal incentives to the states and local governments to drive zoning changes, tax reform – including stamp duty, as well as considering CGT – provision of social housing and state action to improve renters’ rights, like stopping no-fault evictions and creating incentives for longer-term rental contracts.

When looking at the migration levers to pull, many look at higher education. People are rightly questioning why so-called “ghost colleges” have been able to operate unchecked, why universities don’t provide more student accommodation, and whether the balance of international and local students is right.

However, dramatic swings in policy here are dangerous and short-termist. Education is our fourth-largest export earner and is particularly valuable as fossil fuel exports decline over time. NAB estimates that the return of international students was responsible for around half of our economic growth last year and the soft diplomacy impact of Australian-educated people in our region is significant.

Let’s make thoughtful reductions by shifting the mix of students to those who create the greatest economic value – such as by increasing student visa fees, lifting English standards, excluding dodgy providers and shortening the post-study visas for students who cannot get well-paid jobs.

Outside of education, high-quality migrants bring enormous value to our economy and society. The average permanent skilled migrant contribution to government budgets has been estimated at nearly $200,000. The VC, PE and tech worlds are clear that the right migrants can bring skills and experiences here that supercharge some of our most innovative businesses.

Leading economies are competing for such talent, and it is critical that we retain our ability to attract it. Any cuts to migration for temporary and permanent workers must ensure we retain those migrants who add the greatest value to our economy, and instead consider reductions for groups such as working holidaymakers.

The government’s credibility on migration has been dented by the bungled handling of November’s High Court’s decision. They cannot resist tying migration to union power – such as in the construction and aged-care sectors. This undermines some sensible changes they have proposed to skilled migration. While they need to intervene on international students, they still need to retain the entrepreneurialism of the sector that is our largest non-resource export earner.

The opposition’s policy is extremely unclear and on the face of it, could be economically very damaging. The Liberal Party used to be the party of rational market-based economic policy, but Peter Dutton has dismissed concerns by respected economists as “voodoo economics”.

But it isn’t just the impact on the economy that is a concern. Dutton’s budget reply speech linked migrants to our housing crisis, congestion and access to GPs. The irony that close to half our GPs are foreign-trained is not lost on me. Question time is dominated by the Coalition’s talk of “hardened criminal” would-be migrants. In times of pain, we all want someone to blame.

Fanning the flames of fear and anger, particularly now, is exactly the opposite strategy we need when developing thoughtful policies on something as sensitive as migration.

Allegra Spender is the member for Wentworth.

Continue Reading