Audio: Evans - study shows migration boosts economy

Lyndal Curtis speaks with Immigration Minister
August 22, 2008
Immigration Minister Chris Evans speaks to Lyndal Curtis about a report which shows that with the exception of two groups, migrants contribute significantly to the economy.
Media Release, Chris Evans
Migration program boosts economy and eases skills shortage
A report by respected economic analyst Access Economics shows that new migrants to Australia deliver hundreds of millions of dollars to the Commonwealth budget and the broader economy every year.

In a speech to the Australian Mines and Metals Association in Perth today, the Minister for Immigration and Citizenship, Senator Chris Evans, said that the overall fiscal impact of migration is substantially positive and grows over time in real terms.

In its Migrant Fiscal Impact Model: 2008 Update, Access looked at the costs that migrants impose on health, education, welfare, employment and settlement services compared to the fiscal benefits from taxation and visa charges.

For the 2006-07 migration program, Access estimated a total benefit of $536 million in the first year, then another $856 million in year two, growing steadily over time to reach $1.34 billion by year 20.

‘Applying the same modelling to the 2007-08 migration program, the net fiscal benefit is $610 million in year one, $965 million in year two then growing to $1.5 billion by year 20,’ Senator Evans said.

‘The forecast for the 2008-09 migration program is for an $829 million benefit in the first year, $1.16 billion in the second year, then $1.8 billion by year 20.’

Senator Evans said the Access modelling dispelled the myth that new migrants imposed a huge impost on the taxpayer.

‘The positive fiscal impact is particularly pronounced for skilled migrants, which reflects their high rate of labour market participation and higher incomes which in turn leads to a high level of direct tax receipts,’ Senator Evans said.

‘Migrants also contribute to the broader economy through spending on goods and services.

‘As well as the economic benefits, skilled migrants help Australian employers fill critical labour gaps at a time many businesses are facing capacity constraints.

‘The bottom line is that our migration program is vital to keep the economy growing as well as helping Australian businesses overcome skills and labour shortages.

‘Australia is facing a demographic shift that will see more people retire than join the workforce so the permanent skilled migration program provides a stable, effective and targeted source of skilled workers.’

Australia’s migration program increased annually over the last decade under the previous government to the point where the 2007-08 migration program was the biggest provided by Australia since the 1960s.

The 2007-08 migration program comprised 108 540 places (68 per cent) in the skilled migration stream and 49 870 places (31 per cent) in the family migration stream. Another 13 000 refugee and humanitarian visas were granted in 2007-08.

Last year’s intake represents a seven per cent increase on the 2006-07 migration program which totalled 158 960 places, of which two thirds (97 920) were skilled migrants.

The 2008-09 migration and humanitarian program is expected to total 203 000 visa grants, with 133 500 allocated for skilled migrants, 13 500 places for refugee and humanitarian entrants and a further 56 500 places in the family stream.
The PDF report is at the above link. It's probably mostly propaganda. Ross Gittins says the per capita income gain from immigration is chicken feed, and the case against immigration is stronger than the rest of us realise. Ditto says the House of Lords. Harvard economist George Borjas said the debate over immigration actually shouldn’t be about the economic benefits, as they "seem much too small".


Anonymous said...

I have done some quick research and found:

On Friday (22aug08), this article appeared ABC News:

Migration program will give economy $536m boost: report

The article relates to a report from Access Economics that estimated the 2007-08 immigration program will bring a net benefit of $536 million for the year.

Original report:

Migrants Fiscal Impact Model: 2008 Update

However, reading the report "Migrants Fiscal Impact Model: 2008 Update" (why do they always call them "migrants" instead of the proper term "immigrants"?) reveals a number of major oversights:

1. Model extends out for 20 years and is not a "life cycle" model of immigrants. Retirement / pension phase and associated costs are not included in calculations.

2. Impact on Budget from any children of the immigrant group born after arrival in Australia is also not considered.

3. Major infrastructure costs not included.

Examining only those revenues and expenses which can be directly attributed to a particular population or client group leaves out a significant proportion of the Commonwealth budget, such as expenditure on public goods or infrastructure.

EXPENSES: Budget information is used to source unit costs of service provision. For future years, the nominal price of most services is linked to the CPI (which has a default growth rate of 2.5%per annum)

With real costs of services such as private health cover rising at over 10 percent per year and general costs (food, trade services, rent, etc) between 10 and 30 percent, how realistic is 2.5 percent in this report?

In summary, the benefit of $536M per year (2007-08) claimed in a $674 billion economy (an increase of 0.075 percent) is a small fraction of the cost of even the current infrastructure projects (not included in modelling calculations of the report) in major metro centres of Australia (e.g. cost of Brisbane North South Bypass Tunnel at $4Billion dwarfs the one year benefit of all immigration by a factor of 7, and that is just one project, one city!).

I am not against immigration per se, but let us have full, honest and accurate government forecasts published in regards to costs. Also, let us have more public debate before simply doubling immigration intake quotas over a number or years just to prop up property prices or increase tax revenue without due consideration of the overall economic, social and environmental costs down the track.

It is time for a REFERENDUM on immigration.

Please feel free to publish this as some kind of rebuttal.

New South Wails said...

Thanks. Rudd and Labor are moving us towards EU style open-borders and they'll use whatever propaganda suits that end goal.