Thanks for another great thought provoking podcast!
Leith frustrates me because he raises some really great concerns, like the issues with temporary visas and what amounts to blatant scamming of student visas. But then appears to lean on nothing of economic note at all to argue his ‘small Australia’ case outside of ‘it’s been bad since 2000’.
That response to your devils advocate question was laughable and nothing more than a deflection. I wish you drilled him more on that.
It would appear to me that it is simply a question of needing the requisite city planning, housing and infrastructure to keep pace. This should be entirely manageable with the right coordination and governmental fortitude that has so far been clearly lacking. Maybe the structure isn’t right between states and the feds though, which is a great point and something we as a nation really need to address!
It’s a shame there is no discussion about the value a big population would bring in global politics, for military security, the importance of big cities for innovation and also no discussion on the population cliff we are slowly marching towards.
As for the environment, I don’t see Leith advocating for a stop to agricultural land clearing and fossil fuel mining development, nor for a rapid reduction in carbon emissions. No, even for environmental issues, he just zeros straight in, on only his pet project.
The lack of objectivity really does reduce the strength of the very important issues he does raise.
That's the myth. The reality is the opposite. It's part of the reason why Australia's and Canada's productivity and per capita GDP growth have been so poor.
Mass immigration has overloaded everything and caused capital shallowing across both nations.
The countries that are adopting this high immigration approach are the same countries whose economies became highly financialised during the Neolib era. As Thatcher & Reagan were the cheerleaders for this, this largely means the Anglosphere, though other advanced economies are not immune and also have large-scale immigration.
The 'miracle' of this era was the bankrolling of apparent economic advancement by exponential enlargement of private (mainly mortgage) debt, and the projection of this debt onto future generations by increases in the price of assets (primarily real estate) that were collateral to these loans. This is a one-way street of higher prices facilitated by falling interest rates, with no planned end-game, as the 2007/8 crisis demonstrates. This all falls over when people become resistant to taking on more debt.
As, from a macro point of view, the economy doesn't see individuals, but turns everything into aggregates, it matters not whether it is served by a stable population taking on more debt, or by an immigrant population taking on debt in addition to that held by the resident population.
This comes with at least two advantages; Firstly, the upwards pressure that enlarging population puts on existing real-estate prices. Secondly, as a result of conditions in their native countries, the immigrant population tend to accept higher density of occupation in housing and lower levels of consumption of 'lifestyle' purchases, meaning a larger proportion of their earnings are available for mortgage repayments.
All other considerations- social, environmental etc. are as nothing compared to the requirement to stabilise an essentially unsustainable economic model.
The only thing I’d say is that the globe is highly financialised. This is an outcome of capitalism, where leverage provides liquidity to grease the wheels. The thing is that it’s past the point of no return now. You either roll with the paradigm or you consign your country to economic pain and irrelevance
Australia has a gigantic part of the federal budget, $300 billion, 50% of the $600 billion dedicated to welfare & healthcare spending. I’m told a large proportion of both are dedicated to retirees on the age pension, and as the biggest users of healthcare as people get older. IMO Australia is a black hole of spending that always needs new & regular sources of revenue to fund it - if we aren’t to impose painful new taxes on existing working Aussie families.
The government discovered an expedient fix that allowed them to maintain spending, while keeping taxes lower on citizens:
Take in millions of working age people who want to come here and work or study, and slap them with the raft of taxes. The research is pretty clear today: even unskilled working age immigrants are a net benefit. They will pay more in to the system than they take out.
They also have no say in elections because they aren’t even here yet!
The government can maintain its spending & voter bribes, without raising taxes on the working to pay for them in full. Which would otherwise be punitive.
Japan, a well-known low-immigration example, is an example of what kind of spending you can’t afford.
Their pensioners receive the equivalent of AUD $320 a fortnight from the government.
Aussie pensioners receive $1,100!
Simply for reaching retirement age, you’ve “earned” the right to live on the taxes of working aged people.
So I would like Leith to explain how exactly the a large chunk in the black hole of Aussie spending would be funded, if migration were pared back to levels he’d prefer to see?
The problem to me starts with spending promises.
If we cut back revenue sources - which political voter group has to go on the chopping block for spending cuts?
This is faulty thinking. The "research" you point to on the fiscal benefits of high immigration centres on the federal government, which collects 80% of the nation's tax revenue. They categorically benefit from high migration.
Meanwhile, state governments, who are responsible for most of the expenditure, lose out. That's why they are drowning in debt and have privatised nearly everything. Ordinary residents are also required to pay more in user pays charges to the new private owners, which are effectively private taxes. So they have lost out too.
Australia also pays its way in the world via its resource exports. A bigger population means less resource wealth per capita, since it is diluted among more people. High immigration is literally the dumbest growth model that a resource rich nation could follow.
Australia should emulate Norway, not pursue dumb mass immigration, which has proven to be a categorical failure, according to empirical evidence and the lived experience of this century.
You reckon Aus can afford $300 billion in welfare & healthcare promises without all these people coming here to slap with our raft of taxes their working lives?
The problem starts with spending promises.
Even with our resource rents, they won’t cover $300 BILLION.
So who’s getting their government goodies cut first Leith?
And which political party has the stones to do that?
Norway's sovereign wealth fund is worth US$1.7 trillion and returned US$143 billion in the first half of the year. It's shared among only 5.4 million people. So yes, it could be done. We have far more mineral wealth than Norway. But it won't be because we are ruled by corrupt idiots.
Imagine if Norway had followed Australia's mass immigration model. They'd spread their mineral wealth over more people and would be poorer. But they aren't a dumb ponzi growth nation like Australia.
So you are advocating for an additional 50%+ tax on all our mining and mineral companies? Have you considered the effect that might have on the industry? How would you get something like that over the line in government when the exceedingly weak MRR tax got blasted away by the Abbott government
Yes, I am advocating that we copy Norway. However, we all know that Australia's corrupt politicians would never do the right thing, just as they won't do the right thing on immigration.
So what's your point? My whole argument is that Australia's mass immigration policy is detrimental to welfare and should be drastically reduced, whereas you and others seem to think it is the solution.
This is a policy discussion. Just because governments won't implement what should be done, doesn't mean we shouldn't discuss it.
Okay buddy. Whatever you say. Meanwhile, the empirical evidence shows that 'Big Australia' immigration has been an unmitigated disaster for living standards. Our per capita growth has been poor since immigration ramped. Our broader living standards have declined. Blind Freddy can see it.
If you want actual macro data, check out Gerard Minack's detailed report, which backs my views:
And... We didn't build enough infrastructure in the first 20 years of 'Big Australia' immigration, and most certainly won't over the next 40 years of projected 'Big Australia' immigration.
Therefore, immigration must be cut. Otherwise, living standards will fall. Simple stuff really. And that's before getting into diluting Australia's mineral wealth or the negative environmental implications.
So two we agree that supply and demand need to be balanced. You believe that our population doesn’t need to grow, I believe a larger Australia provides much better ability for us to move away from being a resources only economy and maintain our regional political power.
But the main issue I have with your argument about dividing our resources wealth, is that if we solely rely on being a resources economy then we will be screwed in the future as it starts to run dry. Ever been to a mining ghost town?
What we should be doing is using that natural wealth to create an economy that is less reliant on it. Big cities are where the economic heavy lifting and innovation gets done.
More please.
Thanks for another great thought provoking podcast!
Leith frustrates me because he raises some really great concerns, like the issues with temporary visas and what amounts to blatant scamming of student visas. But then appears to lean on nothing of economic note at all to argue his ‘small Australia’ case outside of ‘it’s been bad since 2000’.
That response to your devils advocate question was laughable and nothing more than a deflection. I wish you drilled him more on that.
It would appear to me that it is simply a question of needing the requisite city planning, housing and infrastructure to keep pace. This should be entirely manageable with the right coordination and governmental fortitude that has so far been clearly lacking. Maybe the structure isn’t right between states and the feds though, which is a great point and something we as a nation really need to address!
It’s a shame there is no discussion about the value a big population would bring in global politics, for military security, the importance of big cities for innovation and also no discussion on the population cliff we are slowly marching towards.
As for the environment, I don’t see Leith advocating for a stop to agricultural land clearing and fossil fuel mining development, nor for a rapid reduction in carbon emissions. No, even for environmental issues, he just zeros straight in, on only his pet project.
The lack of objectivity really does reduce the strength of the very important issues he does raise.
I thought Australia (like Canada) already had a just about perfect system designed to recruit world talent.
That's the myth. The reality is the opposite. It's part of the reason why Australia's and Canada's productivity and per capita GDP growth have been so poor.
Mass immigration has overloaded everything and caused capital shallowing across both nations.
It's all about the Macro...
The countries that are adopting this high immigration approach are the same countries whose economies became highly financialised during the Neolib era. As Thatcher & Reagan were the cheerleaders for this, this largely means the Anglosphere, though other advanced economies are not immune and also have large-scale immigration.
The 'miracle' of this era was the bankrolling of apparent economic advancement by exponential enlargement of private (mainly mortgage) debt, and the projection of this debt onto future generations by increases in the price of assets (primarily real estate) that were collateral to these loans. This is a one-way street of higher prices facilitated by falling interest rates, with no planned end-game, as the 2007/8 crisis demonstrates. This all falls over when people become resistant to taking on more debt.
As, from a macro point of view, the economy doesn't see individuals, but turns everything into aggregates, it matters not whether it is served by a stable population taking on more debt, or by an immigrant population taking on debt in addition to that held by the resident population.
This comes with at least two advantages; Firstly, the upwards pressure that enlarging population puts on existing real-estate prices. Secondly, as a result of conditions in their native countries, the immigrant population tend to accept higher density of occupation in housing and lower levels of consumption of 'lifestyle' purchases, meaning a larger proportion of their earnings are available for mortgage repayments.
All other considerations- social, environmental etc. are as nothing compared to the requirement to stabilise an essentially unsustainable economic model.
The only thing I’d say is that the globe is highly financialised. This is an outcome of capitalism, where leverage provides liquidity to grease the wheels. The thing is that it’s past the point of no return now. You either roll with the paradigm or you consign your country to economic pain and irrelevance
Australia has a gigantic part of the federal budget, $300 billion, 50% of the $600 billion dedicated to welfare & healthcare spending. I’m told a large proportion of both are dedicated to retirees on the age pension, and as the biggest users of healthcare as people get older. IMO Australia is a black hole of spending that always needs new & regular sources of revenue to fund it - if we aren’t to impose painful new taxes on existing working Aussie families.
The government discovered an expedient fix that allowed them to maintain spending, while keeping taxes lower on citizens:
Take in millions of working age people who want to come here and work or study, and slap them with the raft of taxes. The research is pretty clear today: even unskilled working age immigrants are a net benefit. They will pay more in to the system than they take out.
They also have no say in elections because they aren’t even here yet!
The government can maintain its spending & voter bribes, without raising taxes on the working to pay for them in full. Which would otherwise be punitive.
Japan, a well-known low-immigration example, is an example of what kind of spending you can’t afford.
Their pensioners receive the equivalent of AUD $320 a fortnight from the government.
Aussie pensioners receive $1,100!
Simply for reaching retirement age, you’ve “earned” the right to live on the taxes of working aged people.
So I would like Leith to explain how exactly the a large chunk in the black hole of Aussie spending would be funded, if migration were pared back to levels he’d prefer to see?
The problem to me starts with spending promises.
If we cut back revenue sources - which political voter group has to go on the chopping block for spending cuts?
This is faulty thinking. The "research" you point to on the fiscal benefits of high immigration centres on the federal government, which collects 80% of the nation's tax revenue. They categorically benefit from high migration.
Meanwhile, state governments, who are responsible for most of the expenditure, lose out. That's why they are drowning in debt and have privatised nearly everything. Ordinary residents are also required to pay more in user pays charges to the new private owners, which are effectively private taxes. So they have lost out too.
Australia also pays its way in the world via its resource exports. A bigger population means less resource wealth per capita, since it is diluted among more people. High immigration is literally the dumbest growth model that a resource rich nation could follow.
Australia should emulate Norway, not pursue dumb mass immigration, which has proven to be a categorical failure, according to empirical evidence and the lived experience of this century.
You reckon Aus can afford $300 billion in welfare & healthcare promises without all these people coming here to slap with our raft of taxes their working lives?
The problem starts with spending promises.
Even with our resource rents, they won’t cover $300 BILLION.
So who’s getting their government goodies cut first Leith?
And which political party has the stones to do that?
Norway's sovereign wealth fund is worth US$1.7 trillion and returned US$143 billion in the first half of the year. It's shared among only 5.4 million people. So yes, it could be done. We have far more mineral wealth than Norway. But it won't be because we are ruled by corrupt idiots.
Imagine if Norway had followed Australia's mass immigration model. They'd spread their mineral wealth over more people and would be poorer. But they aren't a dumb ponzi growth nation like Australia.
You seem to like ponzi growth. Why is that?
So you are advocating for an additional 50%+ tax on all our mining and mineral companies? Have you considered the effect that might have on the industry? How would you get something like that over the line in government when the exceedingly weak MRR tax got blasted away by the Abbott government
Yes, I am advocating that we copy Norway. However, we all know that Australia's corrupt politicians would never do the right thing, just as they won't do the right thing on immigration.
So what's your point? My whole argument is that Australia's mass immigration policy is detrimental to welfare and should be drastically reduced, whereas you and others seem to think it is the solution.
This is a policy discussion. Just because governments won't implement what should be done, doesn't mean we shouldn't discuss it.
The "not enough water" argument over and over again.
Have you heard of desalination?
Water desalination is highly costly, uses loads of energy, and will drive water bills through the roof.
How about not creating the problem in the first place?
How costly? (Energy is already reflected in cost btw).
Not very costly it seems:
https://www.sciencedirect.com/science/article/abs/pii/0011916488850410
The "problem" is not real. Migration boosts growth, that benefits natives, not just migrants. It's not a zero sum game.
Okay buddy. Whatever you say. Meanwhile, the empirical evidence shows that 'Big Australia' immigration has been an unmitigated disaster for living standards. Our per capita growth has been poor since immigration ramped. Our broader living standards have declined. Blind Freddy can see it.
If you want actual macro data, check out Gerard Minack's detailed report, which backs my views:
https://www.macrobusiness.com.au/2023/11/gerard-minack-demolishes-aussie-population-economy/
This will be my last response to you. There's no point arguing with open border zealots. You lot are like a cult.
Never understood normalizing GDP by population with respect to migration.
A migrant can produce less than the average native and at the same time increase their and the natives" living standards.
Those things don't contradict each other.
Empirical evidence merely shows that immigration without sufficient infrastructure investment is troublesome
And... We didn't build enough infrastructure in the first 20 years of 'Big Australia' immigration, and most certainly won't over the next 40 years of projected 'Big Australia' immigration.
Therefore, immigration must be cut. Otherwise, living standards will fall. Simple stuff really. And that's before getting into diluting Australia's mineral wealth or the negative environmental implications.
So, what's your point?
So two we agree that supply and demand need to be balanced. You believe that our population doesn’t need to grow, I believe a larger Australia provides much better ability for us to move away from being a resources only economy and maintain our regional political power.
But the main issue I have with your argument about dividing our resources wealth, is that if we solely rely on being a resources economy then we will be screwed in the future as it starts to run dry. Ever been to a mining ghost town?
What we should be doing is using that natural wealth to create an economy that is less reliant on it. Big cities are where the economic heavy lifting and innovation gets done.