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Apr 6, 2010

Net Arrivals - Cheap Populism and Export Destruction

Let’s talk honestly about Australian migration statistics – because, well, it would be a bit of a novelty today since everyone else is talking out the wrong orifice. The Coalitio

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Let’s talk honestly about Australian migration statistics – because, well, it would be a bit of a novelty today since everyone else is talking out the wrong orifice.

The Coalition has been banging on about “Net arrival” numbers – a sort of special metric that you can derive by adding a few things together, subtracting a few other things from it and getting a large, scary number that you can then try to bullshit people with. That special number is “300,000” – you can see the full, dubious exercise of Scott Morrison doing Boltemetrics over here in The Oz:

To understand exactly what Morrison and other Coalition members are spruiking today and its consequences – it’s worth walking through in some detail to grasp the full silliness of it all. To get their “Net arrival” figure, what we have to do is, firstly, add together three different types of people movement coming in to the country (to get total arrivals), and then, secondly, subtract the same three different types of people movement leaving the country.

On the total arrivals side, the three categories are:

Permanent Settler Arrivals – people from other countries that are actually coming to Australia to live permanently on a permanent residency visa, New Zealanders coming to Australia to live permanently and other minor classes that have eligibility like overseas born children of Australian citizens. These are the people coming to Australia to live.

Long Term Visitor Arrivals – overseas migrants that are visitors or temporary entrants who are intending to stay in Australia for at least 12 months, but who are not staying in Australia permanently.These are people coming to stay in Australia for a prolonged period.

Long Term Resident Arrivals – Australian residents returning from overseas after an absence of 12 months or more. These are Australians returning home to live.

You can see more about the descriptions over at the ABS site.

On the total departure side of the equation, we have the same three categories, but in the opposite direction:

Permanent Settler Departures – Australian residents (including former settlers) who on departure state that they are departing permanently.

Long Term Visitor Departures – overseas migrants leaving Australia who had spent 12 months or more in Australia.

Long Term Resident Departures – Australian residents who intend to stay abroad for 12 months or more (but not permanently).

So what the Coalition is doing is adding up total arrivals, subtracting total departures and getting a “Net Arrival” figure.

If we chart that annual “net arrival” figure since 1976 – as far back as the ABS goes with this data on their site – this is the scary looking chart we end up with (click to expand)

netarrivals

Look – the blue line is rising!!!!

It’s alright, I’ll wait while you go change your undies.

However, these figures are extremely deceptive and, as you shall see, completely ridiculous.

If we take a look at the composition of these Coalition “Net Arrival” figures over time by breaking them down into the three “net” metrics that make them up –  “Net Permanent Settler”, “Net Long Term Visitor” and “Net Long Term Resident” figures – this is how they panned out over the last 33 years:

netcomponents

The big upward swing in Net Arrivals since 1997 has been nearly entirely driven by an increase in long term visitor arrivals, not permanent migration, not family reunion and certainly not boat people.

What we need to remember here is that these long term visitor arrival numbers include everyone coming into Australia and planning to stay 12 months or longer – everyone including those on student visas.

How big an impact do student visas have on these net numbers?

Substantial.

If we take 2005 as an example – because it’s the last year for which we have public data – during that calendar year the ABS reported that there were 209,620 long term visitor arrivals of which, 113,000 of those were foreign students intending to stay in Australia longer than 12 months!

Over 50% of the long term arrivals – the very category driving the increase in the Coalition’s “Net Arrival” numbers – were foreign students.

Now, Access Economics estimated that in 2007/08 financial year, Australia’s international education industry was worth over $14 billion, providing 122,000 full time equivalent jobs.

If Tony Abbott and Scott Morrison find 300,000 net arrivals per year a “bad thing” that needs to be reduced, then we need to ask them exactly how much of Australia’s education export industry they are willing to wind back or destroy to achieve their goal. Afterall, it’s foreign student numbers that make up the bulk of the Long Term Visitor arrivals that are driving the very growth in their specious “Net Arrival” figures.

The other large component of the Long Term Visitor Arrivals are skilled working visas – if the Coalition become hesitant about cutting our export education industry, perhaps they can explain why they want to exacerbate skilled labour shortages and pump up wage inflation by culling those numbers.

They’d have to do one of those, because boat people, family reunion and permanent settlers have sweet FA to do with the growth in their nonsense Net Arrivals figures.

Possum Comitatus — Editor of Pollytics

Possum Comitatus

Editor of Pollytics

Political Commentator and Blogger

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37 thoughts on “Net Arrivals – Cheap Populism and Export Destruction

  1. Andrew Bartlett

    Bobswinkle @2 “the trend suggests it went down since Rudd was elected. No actual real reason for this whatsoever as far as I can see, but funny how much the opposition seems to be able to have its cake and eat it too at the moment.”

    Most of the downward trend – in the red line on Possum’s graph – would be due the reduction in 457 visa holders (temporary skilled workers). This dropped in the last year or so, mostly because demand dropped due to the economic downturn, plus because the government tightened the criteria somewhat, partly to ensure it better met the purpose of the visa and partly to keep some of the more protectionist unions happy.

    I expect student visa number will reflect a significant drop in the next year or two as well – partly due to cleaning up some of the dodgy providers and perverse incentives that were encouraged in the Howard years, partly due to a drop from those coming from India as a result of the negative publicity, and partly due to increased competition from elsewhere (including as a result of the stronger Aust $).

    One statistic which didn’t get much attention over the last decade was the steady rise in long-term and permanent departures from Australia. As some commenters suggest, the GFC may have halted this for a little while, but I expect it will increase again in coming years.

    And further to Possum’s point about economic benefits of migration, it is also worth noting other findings of Access Economics which show the significant avenue net gain to federal revenue which almost all classes of permanent migrant provide within a very short space of time after arrival (although not as much as the 457 workers do, which isn’t surprising seeing they are not entitled to much by way of government support).

  2. Possum Comitatus

    PeeBee – using the unemployed has been tried and doesn’t work.

    Firstly because the unemployed aren’t where the jobs are, secondly the jobs are only temporary at any given location (meaning that relocating the unemployed isnt really a sustainable solution). The lower the unemployment rate gets, the bigger problem it becomes.

    Hence, the fruit doesnt get picked, prices get driven up until they’re high enough to lure people to pick the fruit. But as a result, prices of fruit and veg are permanently higher.

    We see it in action every year in some industry where a shortage of labour pops up – but we really notice it at the supermarket every couple of years or so.

    You can’t mechanise all agricultural labour in every industry either – and in those industries where it’s possible, it still is often only possible for one part of the process.

    But even if we could mechanise all factors – it then comes down to a cost/benefit balance for each farmer (does the cost of the mechanisation balance against the returns) – which often doesnt stand up unless the price of fruit and veg significantly increases.

    As for the “ideal” carrying capacity – that depends on how you define “ideal”. All sorts of personal preferences will come into play there.

    What we do know is that the environmentally feasible maximum population limit for the country will always continue to grow because of technology advances.

    Let’s say we took this view of “we’ve reached our population limit” in the 1970’s.

    In terms of who ultimately gets disadvantaged – it get’s spread around more than you might think. One of the consequences would be that when you get older and start consuming larger quantities of healthcare, with a smaller population the quality of that health care would be lower, yet the rest of us would have to pay for more tax each to provide that lower quality of care.

    The prices you pay for most goods and services would currently be higher than they are for a great many reasons, some complicated and some as simple as a smaller population reduces the ability of economies of scale to be utilised in any given domestic industry.

  3. col in paradise

    Hi folks…thanks very much poss for the breakdown and analysis…actually when coalition bloggers on other cites have been banging the drum on this I have posed several questions relating to break down and numbers and precentage…of course they generally just come back with personal abuse or just nver ever answer..like the below I sent out to a few sites – Not one answer except abuse..in fact one major newspaper with a right wing bias of course didnt put it up on a few articles hammering home the Abbott/Morisson soundbites and mantra on it…then of course run articles against Conroys filtering citing censorship as main a issue..they censor all the time anyone with a different view or some facts…but many thanks for that and for some folks a extract of my questions on this…

    “Back to politics Milne of course is on the population and immigration tact (Sha na na still staring in hope at polls – what a looser)…and re the 36 Million by 2050 – this is a population forecast based on current and projected growth rates etc – you know simple statistical forecasting ..now I pose these questions to the LNP Milne cheer squad..now what would Abbotts 2050 target be..now we have a current base population that exponentially grows and we okay have immigration pick up the last 12 months and working of immigration projections – more babies are born in Australia per year than immigrants that arrive (legally or the tiny thousands illegally)..now what is the numbers of that growth from exisiting Australian population – whats this as a percentage of the growth in comparison to that of new immigrants over the coming years and their population growth..I think it would be a major component and high percentage. Now what would the LNP base their projections off..even without any new immigrants if Tow Boat tows them all away and stops even those on planes – to get say zero immigration the number would be trending towards 36 Million. Now what do they propose to stop it..one child per family like the Chinese (how communist totalitarian of them) or would it be real neo nationalistic right wing policy like sterilisation – how would their Revolutionary leader Abbott keep the natural population growth down – you know ZPG…also how come a few years back we had LNP Howard Costello et al saying we needed more true blue Australian babies so we could meet the skilled worker (made me laugh then as thought of kids down coal mines) and tax requirements to support our ageing population (which also doesnt exist now and is just Rudd picking on pensioners according to Tone) …and introduced the baby bonus (or as I call it the Bogan bonus) as we needed to populate…lotsof snaps of Costello et al hugging babies…so a major reversal here in policy and facts…amazing..,. the issue is with our natural population growth how we can create the required housing and infrastructure and improve productivity – especially in agriculture and water so we can eat and drink.. thats the task at hand not playing politics re population growth and xenophobia re immigration…not just for Australia but the whole planet”

  4. col in paradise

    Pee Bee…Now I used to back in the old days you seem to,love go and do some fuit picking – Oranges, Cherries , Grapes around the Riverina – and even then in the 70’s back packers, students and the unemployed used to roll up..and Potatoes up around Dorrigo…Now firstly it was hard work and good times but in regards to potatoes it was more not that wages made them go to cheaper machines – It was more that a machine was invented that didnt cut them up to much when extracting – so the farmers of course then got the machines in..as a picker (or plucker when it comes to spuds out of the mud) the wages were small..the farmers got most of it back renting and feeding you – the rest at the local.

    Now one problem apart from as someone said the unemployed are in different regions is that we have unemployment down near 5% – hence some skills shortages – now in a modern historical context this is about as low as you can go I think for the Australian economy – and some of it is due to ABS definitions and data collection..but economic text books talk about say 3% as the equivalent of zero when it comes to unemployment as you always will have a minimal level of people who for various reasons at a given time are unemployed…yes there are still probably some old style dole bludgers out there…but its very small these days (Centrelink paperwork etc is damn annoying and accurate – compared to when you could surf up and down the coast and lodge at Post offices and pick up cheques…5% is for Australia close to as low as you can get….we have abooming resource sector – a now about to boom energy sector (LNG CSG etc) and plenty of big projects coming up – plus the required infrastructure and housing etc and businesses that feed of thses kind of developments and growth..and we dont have enough workers….so whats the solution??? stop breeding – stop immigration – haveing more Unemployment and going back to picking spuds again..dont think so..

  5. Gary Bruce

    Poss, I hope you don’t mind but I sent this e-mail off to Dennis Aitkin –
    [Dennis,
    Are you serious about getting to the truth of things re the Coalition’s “Net arrival” numbers?
    Have a look here. It absolutely debunks their claims.
    http://blogs.crikey.com.au/pollytics/2010/04/06/net-arrivals-cheap-populism-and-export-destruction/
    Regards,
    Gary Bruce]
    And received this positive response from Dennis –
    [Thanks for that, Gary
    I’m a big fan of Possum’s work – he’s right, as usual. I’ve got to write about Malcolm Turnbull tomorrow but I’ll see if I can use that sometime this week.
    Best wishes and regards
    Dennis]

  6. Tad Tietze

    Hey Poss,

    Another fantastic post. In fact there have been several good Crikey pieces in the last two days. But those of us who don’t want to buckle under the anti-population/anti-immigration hysteria face two challenges that these stats are only the first word on.

    First, most of the defence of immigration has been run on the basis of economic benefits, which is the tack you take here. The problem is that we have gone through a prolonged period of economic growth where the perception has been that economic benefits to business have not been shared by ordinary punters. Rising income inequality, increased pressure at work and increased indebtedness to keep up with the Joneses form the basis for this belief, IMHO. My wife works in higher education, and I can tell you that she’s been on strike because her vice-chancellor is certainly not happy about letting those “export industry” dollars trickle down to the workers!

    I think this scepticism about the “economic benefits” line is the rational kernel behind the willingness to accept irrational xenophobia among those so predisposed. Imagine how much more of a hearing the lunar Right will get if times get tougher (*shudders at visions of big votes for Australia’s version of the BNP*). Sadly our country has a history of it.

    The second challenge is around the environment and climate. The “increased population equals environmental disaster” crew are having a field day because now “respectable” commentators and politicians are spouting similar rubbish to what they have been going on with for years. You can imagine that in my political neck of the woods I’ve had to put up with a lot of smug “I told you so’s” from the overpopulation hysterics. And it rapidly translates into a soft “green” version of migrant-bashing.

    Sadly it seems some Senators who should know better have decided to run with the population/migration issue also. Perhaps population is the way that some on the Right want to wedge not just Rudd but the Greens?

    I think a more workable response will have to involve (a) proving direct benefits of migration to ordinary people, not just to business, (b) challenging the superficial environment v population arguments, and (c) portraying migrants much more as “people like us” who are just looking for a decent life rather than mere economic statistics. Otherwise we’ll have a lovely discussion among us well-meaning wonks but one that won’t get a wider hearing.

    Thanks again for the great work.

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