06 March 2009

Rudd warned to resist pressure to cut back Australian migration

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Australian demographer Peter McDonald has warned Prime Minister Kevin Rudd that succumbing to pressure to reduce the levels of immigration would counteract his measures to boost the economy in the long-term.

According to The Australian, the Professor claims knee-jerk reactions to the rising unemployment levels would not benefit the economy in the long-term, as it would eventually come to rely upon younger skilled workers emigrating to Australia to support an ageing population. 

"Labour shortages emerge, and attempts are made to plug them through training or immigration.  This approach often leads to short cycles of under- and over-supply, as has been evident in the IT industry in recent years," Professor McDonald said in his report.

"In the short to medium term (the next 20 years), immigration is the only means available to meet large aggregate labour demand in Australia."

Professor McDonald, who is director of the Australian Demographic and Social Research Institute, said that typically immigration tends to reflect the economic cycle, such that when the economy is in recession numbers are drastically cut to fight against rising unemployment.  However, when the economy begins to turn again – as it inevitably does – the numbers of skilled workers are not there to support growth. 

"Migrants do provide their own economic stimulus," Professor McDonald said.  "They come into the country with money, they spend it to buy houses and set themselves up."

His projections, however, are not blinkered from the negative effects of migration, and he feels immigration levels need to be coordinated with infrastructural plans, including housing, transport, water and appropriate energy supply.

The Australian migration quota is at record heights this year, with the number of skilled positions reaching 133,000.  Minister for Immigration and Citizenship Senator Chris Evans has said he would keep the 133,00 skilled visas as a ceiling until his department has fully assessed the needs of the Australian economy in time for the mid-year Budget release.

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