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Victoria: Parasite State

Victoria: Parasite State
Bob Birrell

Australia’s affluent lifestyle depends on huge imports of manufactured goods, particularly hi-tech electronic goods – for the simple reason that few of these products are made in Australia. In the official statistics these goods are labelled as Elaborately Transformed Manufactures (ETMs). In 2015-16 Australia exported $20.8 billion worth of ETMs and imported $190.3 billion. The resulting deficit was $169.5 billion.

This deficit was largely covered by the export of primary goods, mainly minerals and fuels. There was an Australia-wide surplus of $129 billion in 2015-16 in exports over imports of these primary goods. Victoria contributed a tiny $1.3 billion to this surplus in 2015-16.

At first sight, this is not a pretty picture. Victorians’ life style appears to be dependent on commodity exports, most of which originate from Western Australia and Queensland.

But surely Victoria makes a contribution to the export of ETMs? After all, Victoria has been in the lead in promoting advanced manufacturing and other innovative industries since the early 2000s, when Bracks and Brumby led successive Labor governments.

At that time, there were concerns about the consequences of the Hawke/Keating governments’ reforms of the 1980s and 1990s, which included drastic reduction in tariff levels. These opened Australian manufacturing industry to global competition. The fear was that Victoria’s legacy of protected manufacturing industries was at risk.

Bracks and Brumby embraced Keating’s reforms. Victorians were told not to worry about this risk. This was because Labor was putting in place initiatives that would promote hi-tech advanced manufacturing in Victoria. These initiatives, voters were told in 2002, would ‘make Victoria one of the world’s most innovative and international focused economies’.

Bracks and Brumby set out an Agenda for New Manufacturing. The Labor government promised to provide some financial support for innovation. But the trump card was its determination to turn Melbourne into an exciting destination city that would attract the best and the brightest from around the globe. Docklands and various iconic buildings like Southern Cross station were part of this. Labor claimed that these bright newcomers would enhance Melbourne’s already strong base in science and technology research.

The strategy included plans to boost Victoria’s population – labelled Beyond Five Million. The goal was to grow the states’ population from around 5 million in 2004 to 6 million in 2025. It actually reached 6 million in 2015, with Melbourne increasing its domination of the state’s population, despite the plan’s stated aim to decentralise Victoria’s population.

However the Labor leaders took no chances. Their new planning scheme, Melbourne 2030, provided for massive growth in Melbourne’s population by rezoning much of inner Melbourne and all of the city’s major transport and shopping hubs for high rise apartments. In addition, a huge swathe of Melbourne’s fringe was rezoned for new housing.

Labor’s initiatives were rewarded with the accolade of the world’s most liveable city in 2002. With so many ‘creative’ people expected to be attracted, the Labor leaders promised that Victoria would become ‘a world leader in the 21st century drivers of prosperity’.

Now let’s turn to the real world. How has Victoria performed since these promises were made? Victoria’s contribution to Australia’s meagre exports of ETMs has actually declined since the early 2000s. In 2004-05 Victorian enterprises exported $7.2 billion worth of ETMs. In 2015-16 they exported $7.3 billion. This is less in real terms than in 2004-05, because the Australian dollar was worth far more a decade ago than today.

There have been a few hi-tech success stories in Victoria, notably CSL, but these gains have been more than offset by the losses stemming from the demise of protected manufacturing industries, including the motor vehicle industry, which was the leading exporter of ETMs from Victoria in the early 2000s.

Meanwhile as Victoria’s population swelled and its residents’ affluence has grown, the state’s appetite for ETM imports has surged. As noted, some $7.3 billion of ETMs were exported from in 2015-16. In the same year, Victoria imported $52.5 billion worth of ETMS. The result was a deficit on international trade of ETMs of $45.2 billion.

And it’s getting worse. Victoria’s deficit on international trade in ETMs is deepening along with its growing population. Just a few years ago, in 2012-13, Victoria’s deficit on ETM trade was $34 billion.

Victoria is a parasite state. In 2015-16 Victorians, who made up 25 per cent of Australia’s population, were responsible for 28 per cent of the national deficit in ETM trade of $159.6 billion. Furthermore, as indicated, Victorian made only a tiny contribution to Australia’s surplus in the trade of primary products that largely finances the national ETM deficit.

Victoria is relying on the rest of Australia to provide for its import intensive life style. Melbourne, of course is driving this dependence because of its increasingly dominant role in the state’s economy.

In Melbourne, this dependence is ignored. Why worry when the economy appears to be booming. However the boom is being driven by employment growth in the health, social assistance and education industries that are largely financed by the commonwealth and state governments and a boom in the finance and property industries fuelled by a massive increase in mortgage investment debt.

The current Labor government is basking in Victoria’s national leadership in job creation, the continued award to Melbourne as the world’s most liveable city and the evidence of cranes on every horizon.

This is a mirage – where not a word of the truth, as summarized above, is allowed to intrude.

Bob Birrell is the head of the Australian Population Research Institute

An edited version of this text was published in The Herald Sun, on Monday the 28th of August 2017, page 20.
It was accompanied by an article by John Masanauskas, Bailed Out: Victoria dubbed a parasite state as imports trump exports by $51 billion a year and followed by an editorial, 29 August 2017, Livability clouds gather.

Migration policy: All about numbers

Bob Birrell and Bob Kinnaird

[This post was first published in the March 2017 newsletter of Sustainable Population Australia. It has been republished on John Menadue’s blog – Pearls and Irritations]

The permanent skilled migration program should be cut by nearly half, from 128,000 (primary and secondary applicants) to around 70,000. This includes migrants granted visas under the points test and those sponsored by employers.  

Our political leaders have prioritised growth in the migrant intake over other pressing concerns. These include the migrant contribution to city congestion and housing costs. You might think that our leaders would also be worried about the job competition for locals. Almost all proclaim their concern about jobs for Australians. Yet they are mute about the obvious clash between current immigration policy settings and Australian jobs.

This article summarises our research on the seriousness of this clash and how migration advocates manage to avoid critical scrutiny. Our focus here is on the permanent entry program rather than on the 457 program – detailed in the published report.[i]

The ABS estimates that Australia’s total population growth (some 340,000 a year) is adding around 280,000 a year to the civilian population aged 15 plus. If past work force participation rates continue, 65 per cent (or some 180,000) of this additional population will enter the labour market.

Yet in the year to November 2016, the growth in the number employed in Australia fell to just 87,000. Other signs confirming a weakening labour market are that almost all of the growth of employment in the last few years has been in part-time work and that there has been no growth in the total number of hours worked by those employed.

This is hardly a time to be running a record high permanent entry migration program of around 205,000, or to be encouraging the intake and prolonged stay of those holding temporary visas with generous work rights. These include students, Working Holiday Makers and temporary workers on 457 visas. An egregious example is the rule allowing overseas students to apply for tourist visas when their student visa expires. 35,877 were granted such visas in 2015-16. Does the government really think that many of these former students, with expenses to cover, will not work illegally?

The total stock of these temporaries has risen to around 1.3 million, excluding New Zealanders. They are providing ferocious competition for young job seekers. That is why the unemployment rate for persons aged 15-24 has reached 13 per cent and why increasing numbers are forced into internships and other forms of unpaid work.

Yet there is little sign from leading politicians and commentators of any rethink on the migration policies contributing these outcomes.

Why is this? The answer may be obvious to SPA members. Population growth is seen by the government and business interests as boosting the economy at a time when expenditure on resource industry investment has fallen from around 8 per cent of GDP in 2012 to around 4 per cent in 2016. The views of the current Governor of the Reserve Bank, Philip Lowe are typical. He has declared that population growth is the key to offsetting Australia’s current difficult economic setting. He argues that if Australia continues with the fastest rate of population growth amongst OECD countries this will drive Australia’s economic growth since migrants ‘will require somewhere to live, to work and to play’.[ii]

How do our political leaders get away with it? It is partly because they have created a smokescreen of (false) claims that the ‘skilled’ permanent and temporary entry programs only recruit highly skilled persons in short supply in Australia. On this basis, they assert that these recruits do not worsen local job opportunity. Our recent research, summarised below, refutes these claims.

The skilled migration smokescreen

The permanent resident skilled program

This is currently set at 128,000 (primary applicants and dependents). About two thirds are selected via the points-tested visa subclasses and the rest mainly via employer sponsorship. The Australian points-test and its alleged success in recruiting highly skilled migrants is regularly touted as a model for European nations to emulate as they struggle to manage their migrant influx.

These claims are taken seriously because of one key feature. This is that eligibility for the points tested visa subclasses is limited to those in occupations listed on the Skilled Occupation List (SOL). This list was introduced in 2010 at a time when the previous selection system was in disarray because of the huge number of cooks and hairdressers being visaed. The 2010 SOL was limited to managerial, professional or trade level occupations judged to be in overall national shortage. Cooks and hairdressers were not included.

On the face of it, this policy remains intact. The Australian government conducts an annual review of the SOL, where the public is invited to submit their views about whether particular occupations should be on the SOL or not. But this is a façade.

The growing evidence of oversupply in major professions like accounting and engineering has had little impact on the SOL. For example, the Department of Employment has recently recommended that accountants be removed. The Department of Health did the same for general practitioners (and some other health professions, including dentists) in the course of the 2015-16 review of the SOL.[iii] This advice was rejected.

The government has justified this stance by changing the criteria for judging when an occupation is in oversupply. SOL listing is now determined not by the current state of the Australian labour market, but by the government’s expectations about the medium to long term demand for skilled workers in the relevant occupations.

The Coalition Government makes no bones about its position. Its advice to those putting submissions on the 2016-17 SOL is that the SOL is concerned only:

With ‘medium to long term’ skills needs rather than immediate skills shortages. As such, the Department of Education and Training is only seeking information on longer term trends rather than immediate shortages and costs. ‘Medium to long term’ means 2-10 years.[iv]

No matter what is said in the annual review of the SOL about oversupply problems in particular occupations right now, the government can (and usually does) claim that when ‘normal’ rates of economic growth and job demand return, additional skilled migrants will be needed. This policy stance hides the government’s main priority, which is achieving its skilled migration numerical target. This would be gutted if currently oversupplied occupations like accounting, engineering and ICT were removed from the SOL. This is because they comprise nearly half of all the migrants granted visas after passing the points test.

So much for the claim that the program complements the domestic workforce. What about the boast that the migrants recruited are highly skilled?

Nearly two-thirds of those visaed under the points-tested visa subclasses were offshore applicants. All they have to do to meet the skills criteria of the test is attest that they have experience in their nominated occupation (usually at least eight years) and that they possesses degree level qualifications (from any of a vast number of educational institutions across the globe with greatly differing standards). There is no assessment at all as to whether they are ‘highly skilled’ or that their work experience is even relevant to employer needs in Australia.

For applicants applying in Australia, success is guaranteed if they hold bachelor level qualifications from an Australian university in any of the occupations listed on the SOL (like ICT or accounting), are aged less than 33 and have reached ‘Proficient’ level English (level 7 on the IELTS test). No job experience in their occupation is required. When these former overseas students enter the Australian job market, they add to an already oversupplied graduate labour market that puts a premium on experience and face the same problem as local graduates.

The employer sponsored permanent skilled program

In contrast to the points-tested category, the government claims employer sponsored permanent visas do ‘fill (current) skills shortages in the Australian labour market’.

But this claim is also mostly a facade. There is no genuine and rigorous testing of the Australian labour market to establish that no Australian workers are available at going market rates. The main ‘test’ is simply that the sponsoring employer says there is a shortage of Australian workers. For some employer-sponsored visas in regional Australia, the State government department responsible for regional development assesses whether Australian workers are available ‘locally’ (not nationally). These agencies usually have regional population growth as part of their charter.

Employer-sponsored permanent migrants may be less skilled than the points-tested skilled migrant group as lower skill levels and lower English language requirements apply. In 2015-16, only 26 per cent of employer-sponsored permanent migrants had occupations listed on the SOL.

The permanent skilled program could easily be cut in half by removing occupations like ICT, accounting, engineering, GPs and specialist doctors currently oversupplied from the SOL and by restricting employer-sponsored migrants to occupations on the SOL combined with rigorous labour market testing.

Dr Bob Birrell is President and Bob Kinnaird is a Research Associate, of the Australian Population Research Institute.

[i] Bob Birrell, Ernest Healy and Bob Kinnaird, Immigration Overflow: Why is Matters, The Australian Population Research Institute, December 2016

[ii] Phillip Lowe, 2014, Building on Strong Foundations, Address to the Australian Business Economists Annual Dinner, Reserve Bank, 25 November, p. 5

[iii] On the issue of GPs, see Mike Moynihan and Bob Birrell, December 2016, Doctor Oversupply-Ignoring the evidence, The Australian Population Research Institute.

[iv] <https://submissions.education.gov.au/forms/archive/2015_16_sol/documents/CPA%20Australia.pdf>

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GP Oversupply and Medical Migration

By Bob Birrell, republished from John Menadue – Pearls and Irritations   13 January 2017

There are many indicators of GP over-supply in Australia.  … One consequence has been an escalation in the cost of GP rebates to the taxpayer. … Better distribution of GP services could be achieved by restricting new provider numbers to under-supplied districts.  

There are many indicators of GP oversupply in Australia. Over the decade to 2014-15 the number of GPs accessing primary care rebates on Medicare increased by 47.4 per cent. Over the same period Australia’s population increased by 18.7 per cent. The result was a sharp increase in the per capita number of GP services billed, from 4.7 in 2004-05 to 5.7 in 2014-15. The increase in per capita service provision was even stronger in Australia’s metropolitan areas, where GPs have been concentrating and the oversupply is most acute. Australia is close to the top in the ratio of working doctors to population within OECD nations.

GPs practicing in oversupplied locations have to chase patients. This has encouraged high throughput medicine, in which doctors prescribe multiple tests and recommend repeat patient visits. Patients, for the most part, accept this because they do not pay the costs. Currently 85 per cent of all GP services are bulk-billed. High throughput medicine depends on bulk-billing. Any GP that charges a co-payment in an oversupplied area will quickly lose patients.

One consequence has been an escalation of the cost of GP rebates to the taxpayer, from $3.3 billion in 2004-05 to $6.8 billion in 2014-15 and $7.2 billion in 2015-16. The costs for Pharmaceutical Benefits and screening tests have jumped as well.

These costs will continue to rise because of the increase in the number of domestic medical school graduates, from 1,320 in 2005 to 3,055 in 2015. The number of these graduates taking up GP training places has grown from 450 in 2004 to 1,529 in 2015. Once these Australian Trained Doctors (ATDs) obtain their GP Fellowship they can practice where they wish. Despite a raft of incentives to serve in undersupplied areas the great majority are choosing to practice in metropolitan areas.

Large numbers of Overseas Trained Doctors (OTDs) are adding to the metropolitan supply. This arises as follows. Since the early 2000s successive Australian governments have dealt with shortages of GPs in regional areas by facilitating the recruitment of OTDs on 457 visas. These 457 visas are only issued for specific jobs in GP practices and hospitals in locations defined as Districts of Workforce Shortage (DWS). Thousands of such visas are issued each year, including 2,320 in 2015-16. An indication of the scale of this recruitment is that it is more than the 1,529 GP training places allocated in 2015.

After serving a prescribed period in a DWS (from 5-10 years depending on remoteness of location) OTDs can bill on Medicare where they please (just like ATDs). Most move to metropolitan areas or to major regional centres. This movement is the main contributor to the rapid growth in the number of GPs billing on Medicare in metropolitan areas.

Given current medical migration policy this metropolitan flow will continue, because the government is allowing employers in DWS to sponsor replacements for the OTDs who leave. They are doing so in large numbers, as is indicated by the 2,320 457 visas issued in 2015-16. In time, many of these OTDs will move to metropolitan areas, where they will compete for patients with the impending surge of ATDs described above.

The Department of Health takes a stand

In 2016 the Department of Health (DoH) admitted the seriousness of the oversupply situation and announced some radical proposals affecting the recruitment and location of GPs. This arose in the context of the 2016-17 review of the Skilled Occupation List (SOL). The DoH recommended that GPs (and most specialists) be taken off the SOL. The significance of SOL listing is that migrants seeking permanent entry visas under the points-tested visa subclasses must have an occupation that is included on the SOL. The SOL does not affect eligibility for a 457 visa since almost all professional, managerial and trade occupations are open for sponsorship.

However DoH accompanied its SOL recommendations with a statement that it intended to reduce medical migration and to ensure that newly minted ATDs fill the resulting vacancies in underserviced areas. DoH can stop OTD recruitment on 457 visas by abolishing the DWS arrangements. At present OTDs can only be sponsored for a 457 visa if their employer specifies a GP position in a DWS.

The Coalition Government rejected this advice. It did so for two reasons. The first was that it does not want to remove major occupations from those eligible for its points-tested visa subclasses. To do so would gut the migration program, an outcome the government will not countenance. To this end the government has changed the criteria determining listing on the SOL. It has stipulated that the current state of the labour market in particular occupations is no longer relevant. All that now matters is the ‘medium to long term’ skill needs for the occupations under review.

To illustrate, the Department of Employment and Training’s recent surveys show clear evidence of excess numbers of applicants to job vacancies for accountants, ICT professionals and engineers. Yet each of these occupations remain on the SOL. All the occupations listed, as well as doctors, remain on the SOL because according to the government’s judgement of the medium term outlook, there will be a need for additional professionals in each field.

Our investigation indicates that these judgements are being made on the basis of outdated employment projections prepared during the resources boom era. The DoH recommendations for doctors were particularly interesting in this context because they challenged these projections (even if to no avail).

The second reason for the government’s reluctance to accept the DoH advice was fear about the likely reaction of organised medicine. If medical immigration ceased and ATDs entering the workforce were required to fill the resulting vacancies, this would abrogate the longstanding right of ATDs to practice where they wish. The policy would be labelled as conscription.

This is not the case. GPs are public servants, as the 85 per cent bulk-billing rate indicates. Public servants, such as teachers, can choose to work wherever there are vacancies. Likewise for GPs. Under the reforms implied by the DoH, GPs who finish their training would be free to work in any of the many locations — mainly in regional Australia, but also in after-hours service in metropolitan areas — where their services are needed. This could easily be accomplished by restricting new provider numbers to undersupplied districts.

This article is drawn from Mike Moynihan and Bob Birrell, GP Oversupply – Ignoring the Evidence, The Australian Population Research Institute, December 2016.

Bob Birrell is head of The Australian Population Research Institute. 

Disability and age: from 1998 to 2015

By Katharine Betts

Republished from YourLifeChoices 30 June 2016

We’re so used to hearing that an ageing population is the biggest threat facing our economy, but as sociologist Katharine Betts reveals, the figures don’t quite support this claim.

Since the late 60s large families have become less common, and at the same time, life expectancy has continued its steady rise. For many of us this feels like an improvement –parents no longer have to face numerous unplanned pregnancies and most of us can look forward to our 80th birthday and beyond. But these two changes also mean that the average age of the population has risen and will continue to rise for a few more decades.

For some people, however, this does not look like a good thing. In March 2015 a journalist charted the life of newborn baby girl, writing that she would ‘experience life as a youthful minority in an Australia bursting with ailing boomers’. And, by the time the child was middle aged, ‘there’ll be a generation of geriatrics to support’.[1] Another writes of ‘bedridden hordes of the elderly, dwindling numbers of able-bodied workers, and deeply indebted governments scratching for tax revenues to pay for rising health costs, pensions and aged-care costs’.[2] Other comments like these are not hard to find.[3]

But is the situation really so bad?

The Australian Bureau of Statistics (ABS) has been conducting surveys of the numbers of people suffering from disability for over 30 years. They show the percentage of Australians with disabilities grouped by age and sex, and by how serious the problem might be.

The first two were in the 1980s: 1981 and 1988. They show a discouraging tendency for the rate of disability to rise over the seven intervening years. In 1981, 51 per cent of Australians aged 85 and over were found to be ‘severely handicapped’ and in 1988 the proportion had risen to 62 per cent.[4] People were described as severely handicapped if they needed help with one or more of three core activities: self care (showering, dressing, eating and so on), mobility (moving around inside or outside the home), and verbal communication.

By the late 1990s the terminology had changed from handicap to disability, and the definitions of serious disability now included two separate categories: profoundly disabled (always needing assistance with one of the three core activities) and severely disabled (sometimes needing assistance with a core activity).[5]

There have been five comparable surveys from 1998 to 2015. And the pattern they provide gives cause for optimism.

Figure 1 shows that rates of profound or severe disability for people aged 65 and over have been falling over this 17-year period. In the case of those aged 85 and over the rate fell from 65 per cent to 49 per cent.


Source: Disability, Ageing and Carers, ABS, 4430.0 (various issues)

The 1998 data doesn’t distinguish between people aged 85-89 and those aged 90 and over. But from 2003 on we can see the difference between the older old and the younger old more clearly.


Source: Disability, Ageing and Carers, ABS, 4430.0 2015, April 2016[6]

Figure 2 shows that between 2003 and 2015 profound and severe disability rates for people aged 90 and over fell from 74 per cent to 63 per cent, while rates for people aged 85 to 89 fell from 51 per cent to 42 per cent. Similar to Figure 1, it also shows that rates were lower for people under the age of 85. But in Figure 2 it’s also clear that, in all cases, these rates have also fallen since 2003.

Disability is not confined to older people. There are profoundly and severely disabled people in all age groups. In 2015 more than half of them (52 per cent) were under the age of 65. Indeed all babies and children, at least up to the age of five, need help with self care, mobility and communication. To get a full picture of how many Australians need such help, and how many carers we in fact need, we should add them in too.

But here we are focusing on older people.

Figure 3 shows the changes between 2013 and 2015 by both age and sex for the 65-and-over group.

Source: Disability, Ageing and Carers, ABS, 4430.0 2015, April 2016[7]

In all age-group categories the reported rates are higher for women than for men. In some cases this could be due to men being reluctant to report serious problems, but the gap is probably mostly due to the same factors that lead to men having lower life expectancy: more hazardous work, risk taking, reluctance to seek medical help, and hormonal factors that may weaken men’s immune systems8. Thus it is probable that health problems among men are more likely to end in an earlier death rather than prolonged disability. It’s also true that women have a higher risk of dementia, a risk that is independent of the fact that they live longer and so are exposed to this risk over a longer period9.

But the important finding is that, over the 12-year period, rates have gone down for all of the sub-groups. We are not only living longer, the portion of our lives when we might fear to be limited in what we can do is getting shorter. Life expectancy is going up, and healthy life expectancy is going up a bit faster.[8]

Why is this happening? Medical scientists and demographers have not yet got clear answers. But they can tell us the immediate causes. Coronary artery disease[9] and serious vision problems[10] are declining. Dementia — the disease that many of us fear most — is also in retreat. In 2013 a British study reported that over a 20-year period the prevalence of dementia among people aged 65 and over had fallen by 24 per cent.[11] And in early 2016 a US study reported that over the last thirty years (among people who had finished high school) the rate of dementia had declined by 44 per cent.[12]

We don’t yet know why these changes are occurring. Better health care explains part of the decline in heart disease and vision problems, but only part. Possibly a lifetime founded on a long period of education helps stave off dementia. When we know more we’ll be able to take steps to reduce age-related disability rates even further.

In the meantime the data on the changes themselves are clear. Increasing numbers of older Australians are, and will be, free of serious health problems and will be able to continue to make a positive contribution to society.

Yes, the ageing of the baby boomers means that we are going have more older people in Australia. The ranks of those aged 65 to 79 will increase over the next 15 years, but more of us will be healthy and able to keep on working in paid jobs, if that’s what we want to do and the jobs are there. Or we will keep on with the volunteer work, helping care for grandchildren and, with luck, doing many other interesting things that we didn’t have time for before.

Katharine Betts was joint-editor of the demographic journal People and Place from 1993 to 2010 and has written widely on demographic topics. She is currently adjunct associate professor of sociology at Swinburne and vice-president of the Australian Population Research Institute.

[1] G. Rushton, ‘Here’s to a long life for Frankie’, The Australian, 6 March 2015, p. 1, 8

[2] F. Anderson, ‘Future tense’, The Australian Financial Review, February 21 2015, p. 16

[3] K. Betts, ‘The ageing of the Australian population: triumph or disaster?’, Centre for Population and Urban Research, Monash University, 2014

[4] Calculated from data in Disabled and Aged Persons, Australia, 1988: Preliminary Results, Catalogue no. 4118.0, Australian Bureau of Statistics, Canberra, 1989, p. 2

[5] Disability, Ageing and Carers: Summary of Findings, Australia 1998, Catalogue no. 4430.0, ABS, Canberra, 1999, p. 4

[8] Healthy life expectancy in Australia: patterns and trends 1998 to 2012: Bulletin 126, Australian Institute of Health and Welfare, Canberra, Australian Institute of Health and Welfare, 2014

[9] D. S. Jones and J. A. Greene, ‘Is Dementia in Decline? Historical Trends and Future Trajectories’, The New England Journal of Medicine, vol. 374, no. 6, 2016, pp. 507-509

[10] M. Chernew, D. M. Cutler, K. Ghosh and M. B. Landrum, Understanding the improvement in disability free life expectancy in the U.S: Working Paper 22306, National Bureau of Economic Research, Cambridge, MA, National Bureau of Economic Research, 2016

[11] F. E. Matthews, A. Arthur, L. E. Barnes, J. Bond, C. Jagger, L. Robinson and C. Brayne, ‘A two-decade comparison of prevalence of dementia in individuals aged 65 years and older from three geographical areas of England: results of the Cognitive Function and Ageing Study I and II’, The Lancet, vol. 382, no. 2013, pp. 1405- 1412

[12] C. L. Satizabal, A. S. Beiser, V. Chouraki, G. Chêne, C. Dufouil and S. Seshadri, ‘Incidence of dementia over three decades in the Framingham Heart Study’, The New England Journal of Medicine, vol. 374, no. 6, 2016, pp. 523-532

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Population growth, polls and politics

Katharine Betts
13 June 2016

For the past ten years Australians have been subjected to an exceptionally high level of population growth and now they are losing patience.

The graph shows the steep increase in numbers since 2006 (data from here). If this continues the population will grow from 24 million today to around 41 million in 2061 (see the 2013 ABS projection series 29 and 41).

KB's graph

In November 2015 a survey commissioned by Sustainable Population Australia (SPA) found that 51% of voters thought Australia did not need more people. Then in May this year a survey done for SBS TV found that 59% of people thought that the level of immigration over the last 10 years had been too high.

The SPA survey asked respondents to give reasons for their opinion. Many of those who thought we did not need more people said our cites were overcrowded (with too much traffic)—consequences of rapid growth all too apparent to urbanites. Others spoke of job competition. And many worried about the effects of growth on Australia’s fragile environment. Concern about too much cultural diversity and migrant enclaves was also high on the list.

The SBS survey focused on immigration and found that dissatisfaction with immigration was even higher than with growth in general. It asked about multiculturalism and 46% of respondents said that this had failed. It had brought social division and religious extremism to Australia (43% of those who were immigrants themselves agreed).

It was reasonable for SBS to focus on immigration because this accounts for the major part of the current population boom — around 58%.

Immigration is a product of government policy. It’s the outcome of decisions made by political elites, prompted by lobbyists for property developers, employers, and other businesses that profit from population growth. The two surveys show that the electorate is fed up with the unwanted growth that this power elite has wished upon them.

The record numbers of migrants in the 2000s were partly justified by the push to keep affordable skills coming during the investment phase of the resources boom. But since 2012 that justification has evaporated and economic growth has slowed. Despite this, Governments, both Labor and Coalition, have kept immigration high. Now the motivation is to keep the housing and development interests happy. They continue to profit from a stream of new customers, a stream which also keeps the construction industry going and creates the appearance of a busy economy. But this strategy has not increased per capita income. Quite the reverse.

It’s not just that forced population growth leads to clogged infrastructure, cultural disruption and environmental deterioration, it is also comes with financial stress.

Leith Van Onselen writes that:

While headline GDP growth across Australia has held-up reasonably well over the past decade, thanks to high immigration, per capita real GDP is trending down so sharply that it has fallen to levels not seen since the early-1980s recession. …

While real GDP has been rising since December 2011, net disposable income (NDI) per capita has been falling. See graph below. (NDI is explained here.)

LvanO's graph

Urban voters are also angry about the level of densification forced on them by undemocratic planning authorities determined to accommodate developers. Groups such as Planning Backlash, BRAG (Boroondara Residents Action Group), Save our Suburbs, RAGE (Residents against Greedy Enterprise) and the Carlton Residents Association all express deep frustration about over-development, loss of heritage and declining quality of life.

So far the growth lobby has been able to keep on profiting from ballooning numbers, partly because few voters fully understand what is being done to them. They know that conditions are getting worse but they don’t fully understand the key role played by population growth.

The SPA survey tested respondents’ knowledge of demographic change. The minority (16%) who had a good understanding were the most likely to say that Australia does not need more people. But 82% knew very little. Though they were unhappy about time-devouring traffic jams and ugly new high-rise apartments, they didn’t always know why these miseries were being wished upon them, or why they felt so powerless.

But their unhappiness has political effects, effects which can explain why governments have been toppling so fast. Kelvin Thomson calls this the witches hat theory of why governments fail. Mark O’Connor summarises it thus:

[S]taying in power, and keeping the electorate happy is a little like an advanced driving course, one in which a government is required to thread a kind of slalom course between a series of witches’ hats — meaning the orange inverted cones that mark out the course. These hats, which the government, like the driver, needs to avoid knocking over, include such things as keeping electricity and water costs down, reducing hospital queues, keeping housing affordable, preserving the environment, providing full employment, restricting inflation, etc.
And the faster a country’s population is rising, the harder it is to do this… It’s like trying to negotiate the course at double speed.

As Thomson himself puts it:
[W]hen politicians … look in the mirror and ask ‘Why don’t they like me?’, the answer might well be that they are driving the car too fast and knocking over those witches’ hats. They should slow the car down and focus on solving people’s real-life problems.

It is not surprising that Dick Smith, outspoken critic of mindless population growth, is now the most trusted public figure in Australia. Or that mainstream politicians are among the least trusted.

An op-ed piece based on this blog was published under the title ‘Exceptional rates of population growth are causing stress on many fronts’ on 22 June 2016. It appeared in The Canberra Times, The Age, and The Sydney Morning Herald.

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Australian temporary work visa concessions in the Singapore FTA package

Bob Kinnaird
26 May 2016

Prime Minister Turnbull announced the Australia-Singapore ‘Comprehensive Strategic Partnership’ (CSP) on 6 May last, just a few days before he called the 2 July election.

Cynics will suspect the timing and also see the Singapore announcement as something of a consolation prize. The much bigger FTA fish for the Turnbull government was the elusive agreement with India. This was originally promised by the end of 2015 but Special Trade Envoy Mr Robb this week said only that a deal is now possible around mid-2016.

With the CSP announcement, Mr Turnbull can now claim a second FTA on top of the Trans Pacific Partnership (TPP) to match the three North Asian FTAs of his predecessor Mr Abbott. As the Turnbull government’s FTA ‘success’ is trumpeted as a key part of its re-election campaign, this ticks the public relations box.

There are three significant Australian immigration commitments in the Australia-Singapore CSP that probably signal what is coming in the much larger India agreement.

1 Australia’s commitments to ‘waive’ labour market testing (LMT) in the 457 and the 400 visa program
Labour market testing (LMT) means employers have a legal obligation to look for suitably qualified and experienced Australian citizens and permanent residents, and show that none are available, before employers can access temporary visas for foreign workers.

In the 457 visa program, Australia has committed to ‘waive’ LMT for all Singaporean nationals and all ‘intra-corporate transferees’, ie all other foreign nationals who are employees of Singapore-based businesses transferring to an Australian branch of the Singapore-based business.

This LMT waiver will apply to persons in all 651 occupations on the 457-eligible list, including tradespersons and professionals, and Singaporean students studying in Australia.

In the 400 visa program, Australia has similarly committed to ‘waive’ LMT for all Singaporean nationals visaed as ‘installers and servicers of machinery and equipment’.

Australia has also committed not to apply any numerical caps to the number of visas granted to the above categories covered by the 457 and 400 visa commitments.

The LMT waivers and the commitment to no caps will be binding international obligations which effectively cannot be reversed by future Australian governments.

As with the TPP and the China-Australia Free Trade Agreement (ChAFTA), these irreversible concessions on the 457 and 400 visas were not publicly disclosed by Prime Minister Turnbull in his lengthy media conference on the CSP. Neither were they disclosed by Immigration Minister Dutton in his media release on immigration measures in the CSP package or the DFAT CSP ‘Fact Sheet: Immigration’ posted on DFAT’s website.

As with the TPP, it was Labor’s Senator Penny Wong who extracted the CSP visa information from DFAT officials at Senate Estimates. This included an admission that ‘the outcomes are broadly consistent with our approach on the TPP’.

Singapore makes up only a tiny fraction of the 457 program – just under one per cent. But that is not the point, which is the incremental removal by stealth of Australian Parliament and government control over key aspects of its main temporary migration programs.

2 Work and Holiday visa program
This program will at least be reciprocal, unlike the one-sided ChAFTA program that provided work and holiday 462 visas to 5,000 young Chinese. The Singapore agreement commences with 500 per year on each side, with increased numbers to be negotiated over time.

The official CSP documentation provides a very misleading description of the 462 visa on which the 500 Singaporean nationals will come to Australia. The DFAT CSP Fact Sheet on Immigration says the 462 visa allows visa-holders to ‘undertake short term work and/or study to supplement their holiday and cultural experience’.

This downplays the role of the 462 visa as a work visa. The fact is the 462 visa allows young foreign nationals to work for the entire 12 months stay in Australia. Many do so or work for most of their stay. The only notional work restriction is 6 months with the one employer, but Immigration policy allows many lawful ways around that visa condition which is poorly regulated anyway.

For example, 462 visa holders working not as direct employees but as so-called ‘independent contractors’ or ‘ABN workers’ can lawfully work for the same employer for 12 months straight, provided they do a few days work ‘on paper’ for someone else. This practice is widespread in industries such as construction and contract cleaning. It undercuts wages and conditions of Australian employees, and contributes to visa-holder exploitation and tax evasion by employers and their visa workers.

From November 2015, the Coalition government has also allowed 462 visa holders in ‘Northern Australia’ to work 12 months with same employer in certain sectors: construction, mining, agriculture and tourism, plus aged and disability care. ‘Northern Australia’ includes all of the Northern Territory and those areas of Western Australia and Queensland above the Tropic of Capricorn – and is a prime target for investment under the Australia-Singapore CSP.

A prudent Australian government would place a moratorium on any more Work and Holiday visa agreements with other countries, until this temporary visa program has been thoroughly cleaned up. The abuses of this visa program have been well documented in the media and a Senate inquiry for more than two years. Instead the Turnbull government will probably continue to use the program as a bargaining chip in trade and investment deals.

3 A Pilot Internship Program for Singaporean Students
This immigration measure is a new feature in an Australian FTA package and is potentially a far-reaching one.

The DFAT CSP documentation says ‘a pilot internship program will aim to give 100 Singaporeans studying in Australia more internship opportunities with leading Australian companies’ but gave no more details.

Senator Richard Colbeck, Minister for Tourism and International Education, provided this:

‘Singapore and Australia have agreed a pilot internship program which will aim to give 100 Singaporeans studying in Australia more internship opportunities with leading Australian companies….

‘The agreement also provides opportunities for Singaporean students to gain work experience in Australia.

‘Australia will be seeking to include similar agreements in other trade arrangements to enhance our opportunities to grow international education – further building on the National Strategy for International Education 2025 released last week.’

A pilot program for only 100 Singaporeans in Australia might sound minor. But the Minister’s words imply we can expect something similar for India shortly, with others to follow. Based on overseas student numbers, Australia could be offering India up to 500 additional internships, not just 100.

So far no Turnbull government Minister has explained what the Australian government will actually do to meet the agreed aim of more internship and work experience opportunities in Australia for Singaporeans; or crucially whether the ‘internships’ and ‘work experience in Australia’ will involve paid or unpaid work.

The Turnbull government currently has a problem on its hands with its proposed PaTH ‘internships’ for unemployed young people. Under these arrangements, young people would be paid $4 an hour on top of their social security payment to do an internship placement with a prospective employer.

It could have another problem with these internships for overseas students if the Professional Year Program (PYP), outlined below, is any guide to the Coalition’s intentions.

Senator Colbeck said the internships arrangement will be reciprocal, and ‘more than 700 Australian students will study and undertake internships in Singapore in the first three years of the New Colombo Plan (2014-16).’ The number of Australian students undertaking internships (vs study) in Singapore is not known, nor are the terms and conditions of these Singapore-based ‘internships’ including whether they will be paid or unpaid.

Domestic political considerations in Singapore may influence the scale and nature of these internships for Australian students. As in Australia, there is considerable community concern in Singapore about government policies allowing foreign workers access to the domestic job market.

As one member of the Singapore elite said, ‘It’s your PMETs, the professionals, managers and executives and technical people who worry that foreigners are prepared to come in to work for less pay and they (Singaporeans) are marginalised’ (Ambassador-at-Large Chan Heng Chee, chairman of the Lee Kuan Yew Centre for Innovative Cities, interview with Singapore Prime Minister Lee, 2 August 2015).

Professional Year Program (PYP)
The PYP is an Australian government-endorsed scheme and has operated since 2008 for overseas student graduates from Australian universities who cannot make up sufficient points for a points-tested skilled permanent resident visa. These graduates are granted a 485 temporary visa and do a program of around 44 weeks duration. The PYP fee ranges from around $9,000 to $12,300 per participant.

The program includes an ‘unpaid internship’ of around 12 weeks, for a minimum of around 220-240 hours or so. Given that participants actually pay money to do the PYP, the ‘unpaid internship’ is really an internship that the participant pays for – between $2,500 and $3,400 (based on 12 out of 44 weeks, or 27% of the total PYP fees).

The PYP is currently only available in accounting, IT and engineering. Around 2,000 485 visa-holders undertake the PYP each year, the majority (over 60%) in accounting followed by IT. According to a 2010 survey, around 70% of PYP graduates find professional-level employment, often with the company providing the Internship.

The PYP program is highly contentious because of the 12 weeks ‘unpaid internship’. It will be even more so if the government intends to expand these programs as part of its international education strategy, commencing with Singaporean students and commitments written into international economic agreements. This will set up even more intense competition with Australian graduates for entry-level graduate jobs. Employment outcomes for Australian graduates have been deteriorating. Between 2008 to 2015, the proportion of new bachelor degree graduates in full-time employment 4 months after graduating has fallen from 85% to 67%.

This apparently is exactly the Turnbull government’s plan. One ‘Key theme’ in its National Strategy for International Education 2025 is: ‘employability – to provide greater opportunities for work, integrated learning and internships for international students’.

The Coalition government should have a fight on its hands over its shift in international education provision to more work-based arrangements, with no regard for adverse impacts on Australian graduates. It will have its first fight if it expands ‘internships’ for international students and graduates, especially if they are unpaid as in the PYP.

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Bob Kinnaird is Research Associate with The Australian Population Research Institute and was National Research Director CFMEU National Office 2009-14.

An earlier version of this blog was first posted on John Menadue’s blogsite Pearls and Irritations.

Moral confusion and the 1951 Refugee Convention

Adrienne Millbank
19 April 2016

As is obvious from the continuing chaos and confusion in Europe, the 1.5 million ‘migrants’ or ‘refugees’ who arrived in 2015 and the first three months of 2016 did not come under any coherent migration or refugee policy or program. They came, as The Guardian (UK) informed its readers, ‘to secure rights they are entitled to under the 1951 Refugee Convention’. They came after Europe’s external border controls and internal regulations broke down and German Chancellor Angela Merkel said that asylum seekers banked up in Hungary would be welcome in her country.

The countries of ‘Fortress Europe’ did not lift visa restrictions or carrier sanctions designed to keep out people from conflict-ridden and impoverished countries. The refugee convention obliges signatory countries to examine the claims for protection from persecution of every individual who gets through their borders; it doesn’t oblige them to provide legal entry or safe passage. Nearly 4,000 people drowned en-route to Europe in 2015, most in the Aegean, between Turkey and Greece.

The ‘migrant’ crisis in Europe has provided a vivid and dramatic display of the problems and moral confusion at the core of the asylum system. It skews the refugee effort. It is used as a migration channel. It confers advantage on those with the resources to move to wealthier countries. It encourages people to risk their and their families’ lives. It diverts attention from more needy refugees and displaced people. It is impossible to administer with integrity (acceptance rates vary wildly and rejected claimants fail to leave). The asylum process lacks credibility with the broader public, yet is a constant source of tension between government and advocacy groups.

That the 65-year-old treaty is no longer working in the interests of the world’s refugees or receiving countries is now obvious. Germany’s 1.1 million and Sweden’s 200,000 asylum seekers made no difference to the UNHCR estimate, made mid-year, of 60 million refugees and displaced people by the end of 2015. The cost to Germany alone in 2015 of ‘housing, feeding, educating and administering’ its asylum seekers has been estimated at €21 billion (USD 22.6 billion). The UNHCR budget for 2015, to support the world’s 60 million refugees, was USD 7 billion. The German government has acknowledged that 60 per cent of the asylum seekers it welcomed in 2015 will be found not to be refugees and will be required to go home. Such assurances have little public credibility; no European country has in previous years removed more than a fraction of its failed asylum seekers.

Angela Merkel was named Person of the Year by Time magazine, in part for her moral leadership in declaring that the right to asylum ‘has no upper limit’. But the refugee convention only ‘worked’ over the preceding 24 years in Germany precisely because numbers had been kept down through visa and other border controls and deterrents. Germany’s ‘refugee’ credentials have been courtesy of the EU’s institutionalised hypocrisy.

Time magazine was not interested in investigating the cruel ‘Hunger Games’ type of dystopia involved in welcoming asylum seekers as they arrived in Berlin—only after they had paid thousands of Euros to people smugglers, survived hazardous boat trips, trudged through cold and mud, and pushed through barbed wire and humiliation in countries where their presence was resented. Nor was it interested in interrogating the unfairness of a refugee system that bestows enticing rewards—residence in a stable, wealthy country—on the relative few (mostly young men) who are mobile and able to pay the hefty price of ‘undocumented’ entry, while those refugees most in need of help remain stuck in their own countries or marooned in poverty and camps in neighbouring countries. Surely Europe and the rest of the international community can develop a more morally coherent refugee system.

What such a system would look like has become clear. It would be based on the right of people not to be driven from their homes, and the right of return, rather than notions of permanent exile. It would sanction refugee-creating governments. It would provide more comprehensive aid to those who stay, and preserve resettlement places for the most vulnerable of refugees. It would create safe zones within and close to conflict-ridden countries, where education and skills training could continue. It would keep refugees as close to their homes as possible, so that they can return and rebuild. It would create economic and employment prospects for refugees within their regions through investment and trade concessions.

For much of 2015 the EU seemed paralysed by its own rules and processes and the commitment that Germany and Sweden in particular maintained to the refugee convention. By March 2016 internal borders along the Balkans route to these countries had been closed, and a €6 billion deal negotiated with Turkey, whereby people-smuggled asylum seekers will be exchanged for an equal number of Syrian refugees for resettlement. And the EU had joined Australia in being criticised for violating the terms and reneging on the obligations of the refugee convention

The general mood in Australia would seem to be relief that the boats have been stopped since 2013. Both major political parties are aware of the domestic political dangers in using the refugee convention as a mechanism through which to exhibit supposedly superior values of global humanitarianism. Indeed, both parties are aware of the pitfalls in pretending to use it as a mechanism through which to administer a refugee policy that makes sense and is acceptable to the broader public. In view of the object lesson still playing out, any policy retreat that risks the return of boat arrivals to Australia’s shores is unthinkable.

Politicians in Europe, where the refugee convention was born and where it has received its fullest and most generous interpretation, are now calling for it to be reformed or scrapped. Australia’s Prime Minister should apply his innovative mindset to how Australia might galvanize discussions around the development of a new refugee agreement.

To read the full report go to https://tapri.org.au/wp-content/uploads/2016/02/1951-Convention.pdf