There was more fear-mongering, self-serving, and flawed guestimates over population this week – this time from the quintessential accountant and consultant to big business and government, KPMG.
Shock, horror, Australia’s population would be 1.1 million less by 2029-30 because of the reduction in immigration caused by Covid. That would be a “$117 billion” hit to the economy over the decade by dragging down economic growth, KPMG calculates. That would leave every Australian $2850 worse off each year, KPMG says.
So, KPMG and its big-business clients hope that the masses will be lulled into supporting a return to higher immigration. Well, let’s hope a bit of counter-propaganda will prevent that.
Even on KPMG’s figures, this hit to the Australian economy and therefore living standards of Australians is suspect.
KPMG’s says GDP would be $117 billion lower each year by 2029-30 if we do not have these 1.1 million extra people, and that would leave every one of the 28 million Australians by then $2850 worse off each year – that is a total of $79.8 billion, let’s say $80 billion.
Bear with me with the figures.
But if instead we have the extra immigrants, that $80 billion will not be “lost” because of the extra $117 billion in GDP the immigrants would provide. Take that $80 billion for the existing population away from KPMG’s $117 billion, it leaves $37 billion a year for the 1.1 million immigrants themselves, which comes to just $33,636 each immigrant per year, well below the Australian average income. So they are dragging their heels. They are a cost to the Australian community not an asset.
There is clearly something wrong with these “plucked-from-the-air” figures.
KPMG’s study looks at what would happen if there was no vaccine – and therefore no immigration – after one year and after two years.
It quite reasonably says if there is no vaccine “real GDP would be 5.5 per cent lower in every year from 2029-30 and beyond” compared to no “COVID-19 triggering a slowdown in immigration”. It says “a 5.5 per cent reduction in real GDP in 2029-30 alone is equivalent to $117 billion”.
But there is the huge logical problem here. KPMG says that in a no-immigration environment caused by no vaccine, GDP would be 5.5% cent less. Yes, of course. But the 5.5% drop is not down to no immigration. Rather, it is down to all the other economically horrible things caused by a no-vaccine environment: closed businesses, closed borders, lack of confidence etc etc. But KPMG, to suit its own purposes, puts all of the lower GDP ($117 billion) down to no immigration and says the absence of immigration will cost every Australian $2850.
It ignores the following possibility: that a no-vaccine environment causes a 5.5% fall in GDP which is a lower fall than you would expect if Australia had also had to deal with costly high immigration and that if we had continued destructive high immigration in addition to Covid, we would have a 6% or 7% fall in GDP.
KPMG suggests that if we suddenly get a vaccine all we would have to do is allow 1.1 million immigrants in and the 5.5% GDP drop would disappear. This is delusional. In the post-Covid environment most of them would join the end of the dole queue in a profoundly shattered economy, just making things worse.
Covid aside, there are good grounds for concluding that the John Howard-inspired high-immigration policies since the late 1990s have cost Australians dearly, not just in economic terms but also in environmental and lifestyle costs.
It is all very well bringing in immigrants with their immediate incomes which add to overall GDP in the short-term. But GDP per head in the long term is cruelled by that. Schools, hospitals and transport infrastructure have to be built to accommodate them. That might be good for KPMG’s big-business clients just as their immediate consumption needs might similarly benefit them.
But it is not so good for existing residents. Increased congestion and agricultural and wilderness land being consumed by housing are just some of the costs.
High immigration has become a self-perpetuating myth. It was a great thing for Australia from 1945 to about 1970, but thereafter it should have been questioned, but was not.
The KPMG report is just another example of the myth. The KPMG report like so many other business-driven reports conclude that Australia should have higher immigration. If they were honest, they should say that higher immigration was the conclusion upon which they had based their assumptions, facts and arguments.
The KPMG report is just one more bit of a continuous stream of pro-population propaganda. Couched in statistics and the “science” of economics, it goes unchallenged especially by media that should do better: the ABC, SBS, The Sydney Morning Herald and The Age. They rarely if ever challenge high immigration because of a misguided fear of being branded racist or anti-multicultural.
You don’t have to agree with high immigration to prove you are not a racist or anti-mulitculturalism. You can do that by merely supporting Australia’s laudable non-race-based refugee intake.
But all KPMG and others have to do is throw in a few figures and statistics and the average semi-numerate journo swallows them like a python eating a rabbit – whole and undissected.
The fact is, existing multicultural communities have the most to lose from high immigration because it puts extra pressure on the very services they need most: public transport, translation services, schools, health services and so on.
Covid, of course, poses a real threat to the present pro-population Ponzi scheme. If Australia experiences a couple of years’ relief from the high-immigration, high-population mantra, ordinary people might like the result. There would be less pressure on schools, hospitals, public transport, housing costs and so on.
Suddenly, people might revolt against high immigration and high population growth which enriches the few at the expense of the many and at the expense of the natural environment and its non-human inhabitants.
Small wonder KPMG and others like them are serving up the scare-mongering manipulated figures they did this week – continuing to serve their big-business clients against the interests of the vast bulk of Australian residents.
Among the many things that Australians should question and change as a consequence of Covid, high immigration should be near the top of the list.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 29 August 2020.
I Agree
Re: The “mindless culture of endless growth and “business at all costs”, and “the economy above all else” – In a world of finite resources and increasing demand, how is continual growth sustainable?
Australia has passed the point where the current population has sufficient infrastructure, arable land, water and manufacturing to support its present and future needs, particularly in larger cities.
This has been exacerbated by the sale of arable land and resources to foreign investors and multinational companies to whom Australia’s future means nothing but profit.
On top of this, we’ve seen respective Australian governments publicly promote unrestrained immigration and a huge foreign labour force as a solution to future prosperity. I’d be grateful if anyone can explain how a million-plus foreign workers (busily sending money earned in Australia back to their own countries) is a better solution than training and employing a million-plus unemployed Australian citizens currently being supported by taxpayers?
As a long-term Resources Sector worker, I’m heartily sick of hearing the oft-repeated mesage from employers; “If you don’t like the terms (of employment), pay or conditions – _ _ _ _ off and we’ll get a 457 worker to replace you”
Also interesting to note the the current Government and Industry are already lobbying to bring in foreign labour as soon as possible – at a time of unprecedented nation-wide unemployment.
Please, please let our current crisis be an incentive to return to manufacturing within Australia and a focus on providing trainiing and employment for all Australians – not an incentive to sell more of the national estate and entrench welfare as a credible alternative to productive work.
A very pertinent and timely article. Can you suggest a suitable candidate(s) to lobby or assert that they and their adherents will not be supported by ordinary citizens from now on?This ignorant pigheaded approach is destroying this country.
Australia has a very high rate of population growth, caused mainly by immigration. This keeps big business and economists happy, as it makes the GDP grow. But it does not make the GDP/capita (or standard of living) grow. Pop growth makes the economic pie grow, sure, but each year it has to be cut into more and more slices.
Graham, Laura Tingle has always been a Big Australia groupie, dunno why. Meanwhile, at Friday’s chummy Press Club, the Population Minister announced that “job-making” migrants would soon have us back to the “normal” of “fast population growth”.
The October Budget will confirm. I bet the net migration target for the third out-year (2023) reverts to at least 160,000. That is, twice the historical average.
Wouldn’t it be lovely to have a political party to “put Australian workers first”. As Keneally phrased it so well, before Albanese sent her off for the factory-reset.
The simple fact is that you can not have economic growth without population growth. In the F***ed up economic and political systems we find ourselves in, greed rules and those who profit the most from growth will use all their power to keep it going. Continually adding people to the bottom of the pyramid (by immigration, birth rate, etc) so the people at the top can continue to exploit and profit from those below is the core element of most modern societies. We are addicted to never ending population growth on a finite world. This could end badly for us !
KPMG have a worldwide reputation of overworking and slave driving their employees. They want Australians as over worked underpaid serfs globalizing the workforce to the worlds lower standards will accomplish this, that’s why USA is in turmoil now.
Very glad you put some harder scrutiny on KPMG’s forecasts and figures – you’ve done a good job here pointing out their shaky assumptions and hypocrisy.
Also, I can’t help but wonder why this ‘Big 4’ accounting firm is decrying the lost opportunity for GDP ‘growth’ by stalling immigration. What about all those BILLIONS in corporate revenue which do not reach Australia’s treasury thanks to ‘loan repayments’ to related offshore subsidiaries which minimise their on-shore taxable income. These arrangements are sketched out, blueprinted, designed and built by KPMG, PriceWaterhouseCoopers, Ernst & Young and Deloitte. All ‘perfectly legal’ & their own ‘arms-length’ audit of the advisory and tax arrangements bear this out and never fail to wave it all through.
It would make a big difference to Australian prosperity if the multinational firms active in Australia made a fair contribution for their true annual revenues towards corporate income tax.
Another misconception it that we must import skills that are required immediately. The skills shortages are a result of a long standing culture of little or no training in business big and small. Business and accounting has become focussed on reporting in a per contract basis. Future skills do not feature as an asset or even a required expense. Training that is offered is viewed as being generous or done as a minimum requirement. This hes been the case since before the government institutions were sold in the 1980’s so there has been a vacuum since. Our youth deserve better and government needs to coordinate real training regimes to build a fit population rather than the bloating growth they claim as a financial success.
I came to live in my municipality of Glen Eira (then called Caulfield) in the mid 70’s when the suburb was dominated by single dwellings with good front and back yards. Then the developers moved in building mostly crummy two and three floor ‘flats’. Most of these adversely affected the amenity and value of neighboring houses. In Victoria, the State Government set up a tribunal (today called VCAT), to implement State Government planning policies. Local councils’ opposition to granting permits were largely overruled by VCAT. Now, VCAT decides 70% of appeals in favour of developers.
Today, the apartments with between three to nine level are the mode . Government planning policy – with local councils’ compliance – is based the need to increase the population through migration irrespective of the loss of the amenity of existing residents.
The late Sir Henry Bolte, Premier of Victoria established a Division of State Development in the 1960’s headed by a Minister to channel overseas’ industries and migration into regional areas like Ballarat. Today, migrants are channeled into high rise apartments in suburbia resulting in the destruction of the amenity and liveability of many single house occupants. Traffic is out of control.
Of course, politicians and councillors avoid getting involved in this scenario until a multi level apartment block is proposed near them.
Josh Frydenberg is the biggest name of those pushing for high population. Many times he has shouted out the need for more people in the country this year as a long term solution
We need a population policy determined through open debate taking into account the environment, water and food availability, affects on our cities and congestion/liveability and the ideal population. To date all levels of government seemed to have failed us on this issue.
Every farmer knows their stocking rate per hectare. That way the farm can support stock with water, feed and maintain the environment. Over stocking could result in the RSPCA being involved. Who do we have to protect us from overstocking Australia? And do we need to wait until we concrete over the eastern seaboard. It will be too late by then to fix the problem.
Governments seem to be fixated on the short term cash cow of housing based taxes and have failed us on infrastructure and planning. The mantra of “immigration equals wealth through increase in the GDP” is false when recalculated to the individual level.
If the hypothesis of KPMG were true, then India and China would be able to claim the highest living standards.
Yet those countries are net exporters of people!
Continuous growth in population is demonstrably unsustainable without resulting in a substantial loss of quality of life, degradation of the environment, threats to bio-diversity, depletion of finite resources and exacerbating adverse climate effects.
We need to take the opportunity the present pandemic circumstances presents to reassess and develop an economic model that does not depend on “growth” from an ever increasing population. Business need to be more efficient and to learn to operate and live with a flattened income curve.
David Allan
PRAHRAN VIC
Noel Wauchope asks: “How is that Australia has succumbed to the mindless culture of endless growth and “business at all costs”, and “the economy above all else”?
The answer is that because of our compulsory voting system, too many ignorant voters without the slightest knowledge of, or interest in politics keep voting for the troglodyte members of the LNP like Morrison, Angus Taylor, Peter Dutton, Matt Canavan, Stewart Robert, Michealia Cash etc.
These politicians are, one way or another, on the take from big business and the Murdoch scum which have a vested interest in endless growth, when every thinking and responsible person can see that Australia does not have the fertile land, or water to support a huge and ever growing population.
The Aboriginals live here for 60,000 years in harmony with the country; and foreign settlement has in many ways rooted the country in a little over 200 years.
Please have a look at the Sustainable Australia Party. A likely way out of this mess.
And you, Dick Smith, should be leading the Sustainable Australia Party in parliament.
,
Great analysis Crispin. KPMG are notorious for establishing what conclusion their clients want them to reach, and then slapping together any old hooey to support it. And taking big fat cheques for what they must know is rubbish. Or maybe they don’t know, most of their reports are prepared by recent graduates who know they must do what they’re told to get ahead. Your point that high immigration is for the benefit of the few at the cost of the many doesn’t give the full picture: in fact there’s a transfer of wealth to the nation’s richest from the very poorest. There used to be boarding houses where single people could afford to live, for example, while on the dole. But rents are so high due to the constant influx of people needing accommodation that study after study has shown that there is virtually nowhere in Australia where the dole even covers the cost of rent/share accommodation/boarding houses. So out on the street with you. While Malcolm Turnbull’s place in Pipers Point goes up reliably by a million or so a year without him having to lift a finger. Good for Malcolm, not so good for those at the bottom of the heap. All very well for Bill McInness to do heart-rending appeals for kids who can’t afford uniforms or school excursions but your average leftie would rather die than admit mass immigration is a direct cause, by far the most important cause, of poverty.
Excellent analysis and comments from readers also. The one thing no-one seems to mention is the number of COVID cases that can likely be correlated to the many unskilled immigrants who are forced to work multiple jobs in order to make a living, e.g. in care homes / security / uber driving or whatever. The denser population caused by unfettered population growth in the greater Melbourne area is also a major factor.
You did not go far enough. The mistake so many make is in thinking that Trump is an ignorant narcissist whose time in office is likely to be brief and that therefore his impact and influence will quickly pass.
The problem with this analysis is that Trump is a mere symptom of something much deeper that threatens that country. What Trump has been able to do is to recognise the divisions that already exist in the United States and exploit them to his political advantage. I really feel for that country but it must heal itself. It has the capacity to do that. It is a resilient society. I lived through the sixties watching the society as it dealt with the assassination of John Kennedy; the rise and collapse of its disastrous involvement in Vietnam (which included our own unquestioning and subservient involvement until masses of us filled the streets of Melbourne and other capitals in protest); the assassinations of Robert Kennedy and Dr Martin Luther King Jr; the rise and fall of Nixon, and yet, saw it survive.
I would have hoped we are resilient enough to look to our own inner resources now as America did during that decade of crisis. What this should have taught us by now is that it is now time for Australia to step back from any formal treaty with the United States, irrespective of its leadership.
What caused us to seek such a treaty is as much a relic of past fear-laden attitudes as was the reasoning that tied us to the British Empire at the commencement of settlement.
Surely there is now no need of fear which is not to say that we enter this new era of involvement in this region blindly. Of course not. We are sufficiently aware of difficulties that arise in our relationships with the nations of the region but deal with those difficulties as they arise.
The future as part of the region shows promise as much as risk if we have the courage, and the political leadership, to embrace it as an independent nation free of the encumbrances of the past.
Isn’t it a simple matter of big business needing an immigration program to provide a “reserve army” to keep a lid on wages in order to maintain profit growth, to avoid having to compete vigorously? In any case, isn’t GDP (like so many of our current hackneyed economic statistics (e.g unemployment rate, CPI) a measure that is past its use-by date as a measure of wellbeing? And aren’t most economic modellers who make predictions about the future merely our secular contemporary crystal ball gazers i.e. people with confidence and authority rationalising personal prejudices and intuitions? (Written by a retired economist who used to be a modeller).
Hi Crispin, I note your comment that the ABC, et al, do not challenge the kind of dross that KPMG puts out. I would go one step further and suggest they aid and abet. Here is the link to Laura Tingle’s analysis of the KPMG report. I am not sure it could have been more tendentious than it was!
https://www.abc.net.au/7.30/migration-and-population-growth-crucial-to-getting/12580736
A couple of couple comments on it:
Laura Tingle’s assessment was framed by the following context offered in her commentary:
“If you want to know what Australia would look like without the consistently high population growth [read high immigration] of the last couple of decades, go to News Zealand.”
Around 40 seconds in, a graph showing New Zealand and Australian net overseas migration from 2006 to 2019 (it conveniently ignores the first years of the century when NZ immigration rates were high and Australia’s comparatively low … it tends to compromise the ‘couple of decades’ thesis and the wonders of immigration-fed population growth). A black rectangle is placed around a period approximately 2011 to 2013 on the graph when more residents of NZ departed than arrived and their was a spike in Australia’s immigration rate. Many of these kiwis came to Australia. This egress was explained as a search for higher wages and better jobs in Australia and we are invited to assume this is all a product of Australia’s high levels of immigration. We are similarly invited to assume that New Zealand’s economy was struggling because immigration was not high enough!
A closer look, though, and it becomes apparent that Laura Tingle, ‘Chief’ Political Reporter is telling a few porkies.
First, if one checks the population graphs and statistics of the kiwis, they, too, have relied on immigration to grow their population; it has not stopped a high level of emigration. Nevertheless, the kiwi pop has been growing quite quickly. Indeed, in the first years of the 21st century NZ had especially high immigration vis a vis emigration. Yet, circa 2012, the kiwis are jumping ship. So, presumably, something other than the magic elixir of high immigration is needed to explain the NZ situation. (BTW, even in 2011-2013,, New Zealand’s population continued to grow because of immigration and natural increase.
So what was going on?
Well, for those with reasonably long memories — or an inclination to explore — they will know/will have learned that the reason why Australia did comparatively well circa 2012 was the resource boom courtesy of China. This helped Australia come out of the GFC better than many places. It had nothing at all to do with population-growth in Australia or the lack of in NZ.
Curiously, Tingle goes on to say, somewhat vaguely, that a few years later (post 2012) when things began to boom in NZ, the kiwis went home. Again, this is most strange! Things began to boom in NZ while a great many of their citizens were still in Australia! A boom had apparently begun in the New Zealand at a time when their population growth-rate had slowed (with all those kiwis in Oz). Go figure!
A reference to NZ economic data and, indeed, our own, shows no direct link between high immigration and what is perhaps the most important single measure of economic performance: household income; ie, the measure most important to people!
There might well be a correlation between GDP and population growth, there might even be some correlation between high population growth and GDP per capita (hardly worth the pain of massive growth, though) but there appears not to be any causal link, especially to the latter and to household income. For the last five years or so, during which Australia has added almost a couple of million people to its population, household incomes have been stable or in decline.
I am more than happy to be corrected, but, from what I can see, Ms Tingle’s thesis it seems is a crock! At best, it is very poor journalism!
Well said.
How is that Australia has succumbed to the mindless culture of endless growth and “business at all costs”, and “the economy above all else”?
The economy rests on the physical and social environment. With the global heating process already affecting Australia’s fragile environment, mindless growth will all too soon destroy the foundation of Australia’s economy.