Deriving sound asylum seeker policies is partly a moral issue. It is also a concern that analytical disciplines like economics can throw light on. I have been asked to provide views on asylum seeker policies as an economist. The views below are preliminary and I welcome polite comment. What I want to do is to think about are what most people would agree are reasonable objectives for policy and then use economics to think about how these objectives might be met. (more…)
September 16, 2014
January 24, 2014
The major election concern at the last Federal election, after the economy, was the asylum seeker issue. It was the main reason Labor lost the election. The nonsensical view, propounded by social romantics who treat Australia as common property owned by the international community, was that relaxing the constraints on illegal entry that John Howard had imposed would not lead to huge levels of entry. This has been thoroughly and irrefutably discredited as could have been guessed – decrease the cost of illegal entry and, guess what, it will increase. What started off as an irritation under the strict policies of the Howard government had become a major crisis because of the policy-ineptitude of Labor.
As Bob Carr pointed out almost all of the so-called “asylum seekers” are economic migrants seeking a better life in Australia. If you talk to specific groups – such as the Iranians in Australia – the estimate is that close to 100% of the so-called “asylum seekers” are economic migrants. They don’t want to move to Indonesia or Malaysia because it does not meet their living standard requirements. They are not refugees seeking asylum but economic migrants who want to get to the head of the migration queue. There are established policies for assessing the case for economic migrants wanting to enter Australia – we do not want them all because there are potentially tens of millions of people in this category.
We have immigration restrictions for a host of good economic, social and political reasons. Free movement of Labor around the worlds ended 100 years ago. Those who argue it should be reintroduced – the muddle-headed ninnies who say we should accept every migrant legal or not provided they describe themselves as a “refugee” – would gain close to zero community support. Australia has a generous immigration program and most of the population increase in our country since WW2 has been based on immigration. Illegal entry threatens that program because it undermines the selective principles of the program. We are perfectly entitled as a sovereign nation to determine who comprise our population and to select those who match our national self-interest.
I am not generally a fan of Tony Abbott but the Abbott policy of restricting illegal immigration has so far been an outstanding success. No boats have made it through the Border Protection Command cordon to Australian waters in the past 5 weeks which is the longest period without boat arrivals since March 2009. The number of asylum-seekers detained on Christmas Island is now below that of 2000.
Labor has been relatively quiet on the Coalition policy partly because they recognise the ineptitude of their own policy approach. The critics of Coalition policy (and the fear-mongers who believe we should never offend Indonesia) might think about displaying sillier restraint. Indonesia too if it wants continued Australian foreign aid should recognise the serious intent behind the Abbott policy. Instead of sending naval vessels to inspect its border use the same vessels to stop the illegal migrants from leaving Indonesia to come to Australia. As none of them want to reside in Indonesia that will permanently end migration policy problems for both Indonesia and Australia. Indonesia should stop being a transhipment point for illegal migrants seeking to settle in Australia. Indonesia is acting irrationally in the current situation – the Coalition is not.
January 20, 2014
House prices in Australia are expensive because we live in a highly urbanised society that is subject to high rates of immigration. In the year to 30 June population grew by 407,000 of which 244,000 was net migration and 162,000 natural population increase. Deaths over this period were 147,000. Without the migration the supply of housing would come close to balancing the need for housing by new families – not quite since, over time, single more people are living alone and the size of the “family” unit is decreasing.
There are strict planning controls that limit the release of land supply but for the most part this is a good thing.The destruction of undeveloped land is a serious concern as is urban sprawl and the consequences of having huge mega-cities.
I don’t want to argue the economic case for migration (I have done it too many times both “pro” and “con”) except to say that the triangle of benefits from it are likely to be very small – particularly if capital is highly mobile internationally. The main effect of migration will be to drive up prices of fixed assets like land and rates of return on capital. These rates of return will not increase much if capital is highly mobile. The main effect will be to force lower weaves and to increase the share of income accruing to property owners. To worsen the functional distribution of income.
A long-standing argument however is that we need a strongly expanding housing sector to boost demand both for housing and for the consumer durables used in housing. This is necessary to keep the economy growing at 2%+. Indeed some economists argue that the business cycle itself is simply a function of cyclical trends in housing demands. In the short-run this argument seems correct. Private investment in housing is a major part of private investment so that fluctuations in it will have “multiplier” effects throughout the economy. But from a longer-term perspective the argument is nonsense. We should build houses to house families not to drive the macroeconomy. Housing investment is an instrument of policy but not a target. We can invest in many other things that also provide social gains. The idea that we must commit to 2%+ growth is infantile – let’s enjoy the fantastic uncrowded, unpolluted environment we have and tell the gnomes from the Business Council to go away.
Instead of relying on a never-ending flow of migrants to boost the economy via its effect on housing demands we can settle for a relatively fixed housing stock which is maintained and improved. It is unnecessary to have vast mega-cities with their attendant environmental problems. We can spend more of our existing resources improving distribution issues and spending on education and cultural development. Yes, I have become strongly anti-growth. The ethic is fallacious and, accordingly, most of modern macroeconomics is irrelevant to how we should live our lives. The pointless pursuit of a larger population is illustrative of a general class of macroeconomic fallacies.
July 23, 2013
Alana Lentin in The Guardian has the solution to Australia’s asylum seeker difficulties – an open borders policy. This policy avoids all border protection costs by abolishing border protection – anyone who wishes to reside in Australia could do so.
In the previous post I cited a link to Amnesty that summarises current information on asylum seekers and displaced persons. I condense what is a longish quote from that link:
In 2011, an estimated 4.3 million people were newly displaced due to conflict or persecution. More than 800,000 people were displaced as refugees across international borders, the highest number in more than a decade. Another 3.5 million people were newly displaced within the borders of their countries, a 20 per cent increase from 2010
Of the world’s displaced, 25.9 million people were receiving protection or assistance from UNHCR at the end of 2011 (10.4 million refugees and 15.5 million Internally Displaced Peoples). This was 700,000 people more than in 2010.
…..According to governmental statistics, 22 countries admitted 79,800 refugees for resettlement during 2011(with or without UNHCR assistance). The United States of America received the highest number (51,500)
I am interested how a country with a public health system and a social security safety net might fare if it declared “open borders” in this international environment. Has Ms. Lentin heard of “adverse selection”? Would criminals and those with pre-existing medical conditions be admitted? Would those who were illiterate or members of terrorist groups be admitted ? What would be the effect on wages and employment for the worst-off Australian workers, those with limited skills, if an avalanche of unskilled workers from other countries set up here? Even if there were efficiency gains (doubtful for adverse selection reasons) the functional distribution of income would alter disastrously in favour of fixed asset holders and the wealthy.
“Open borders” implies no selectivity. This is obviously going too far. The planned Australian intake of humanitarian migrants is around half the actual current intake of the US (as noted above it has the world’s largest intake) even though our population is less than 1/12th that of the US.
The suggested policy will never be adopted but I wonder how people can arrive at such stupid positions. Do you just present a view that sounds “humanitarian” without giving the consequences of adopting that view a moment’s thought? Look at the numbers in the quote and understand that for much of Australia’s history population growth due to immigration has been around 1% of our population. The 2011/2012 intake at 185,000 was around 0.8% of population. Even with these migration levels the strains on our infrastructure were massive – particularly in western Sydney. Look at the numbers in the Amnesty quote and imagine what might happen to all these problems if an intake resulting from an “open borders” policy occurred.
For years Australia struggled with a “family” oriented migration program that was unnecessarily costly for the country. It was maintained only because it kept incumbent governments in power. Finally a more selective program, based to at least a weak degree on skills. was introduced. Now the proposal is to go back to the worst immigration policy imaginable. Namely to abolish any weight to Australia’s national interest, abolish any idea of selectivity by allowing anyone who wished to come to Australia for any reason to do so.
This type of thoughtless proposal imperils the current migration program. Such irresponsible chatter makes people fear migration even more than they already do.
Update: Has someone added some LSD to the Kool-Aid? Or is it April 1 in some distant universe? Here is a different and equally stupid approach to solving the asylum seeker problem. Australia should send its roving good-will ambassadors to the countries where all the asylum seekers are coming from (Iran, Sri Lanka and Afghanistan I guess), sort out all their internal political problems and then the asylum seekers would simply stop coming. No cruelty involved and much cheaper. It is almost comical because the authors write with such seriousness. I guess that with Barry Humphries ending his acting career he could do his Sir Les Patterson bit and head off to Sri Lanka and sort out these ornery Tamils and Sinhalese. Just tell them to start behaving in a decent Christian way, to love one another and, with a broad Aussie chuckle to demonstrate his fundamental Aussi decency, they would just fall in line. You could have an “open door” policy, along the line of Alana’s suggestion, but no-one would want to come because they would all be living so happily together.
Like Alana, this lot seem to be university academics. It’s a concern.
July 21, 2013
Wow hasn’t Rudd changed his stated views since he attacked John Howard’s approach to successfully dealing with illegal entry to Australia. What a total disaster Labor’s policies have been. Even given Rudd’s well-known electoral awareness (the full page ads in today’s newspapers warning that illegal arrivals will not gain Australian residency are directed entirely at local voters) is such a breath-taking change of heart that one wonders how stable it will be, how long it will last. Will Kevvie change his mind again when the inevitable “humanitarian” outcry against his policy surfaces? When legal challenges force a “reconsideration” of the policy? The press report I read states that queue-jumpers who arrive in Australian waters by boat will never be permitted to settle in Australia. I assume the never here means literally never – that achieving the status of Papuan citizen will not give them another bite at the cherry – the route South Sea islanders take when gaining entry to Australia by first becoming New Zealand citizens. (more…)
June 29, 2013
For more than a decade I have argued two key propositions in relation to attempted illegal migrant entry to Australia. Both have aroused intense criticisms:
- (i) Softening the approach to so-called asylum seekers will definitely attract many more attempts at illegal entry.
- (ii) Almost all so-called asylum seekers are economic migrants seeking a better economic life not escape from persecution.
Proposition (i) is now self-evidently true. A trickle of intake during the Howard years has been replaced by an expensive avalanche. We now face not a minor discomfit but a major difficulty in handling illegal attempts to enter Australia. The inane response to proposition (i) was to say “Where’s the evidence?”. But evidence is unnecessary. It is now beyond being arguable that demand curves do slope downwards – reduce a price and you will increase quantities demanded. But if you do want evidence the experience of the last 3 years delivers it unambiguously. Proposition (ii) is now confirmed by Bob Carr – his claim that 100% of recent arrivals are economic migrants contrasts with the fact that recently 95% of such migrants are now assessed as being genuine refugees. But Carr’s observation is saying nothing new. In the 1990s when I worked on migration issues I was stunned to find that almost all of those migrants seeking entry to Australia (mainly from IndoChina) under the refugee and humanitarian program already had family ties here – they were effectively gaining entry under the family program.
There is absolutely no reason to accept queue-jumper claims for entry to Australia ahead of correctly processed legitimate claims. The Labor Government may lose office mainly on the basis of its disastrously inept policies on border protection. Whatever the misled crybabies on the left in Australia may say, Australians are concerned with the issue of controlling entry to Australia and so they should be. Economic migrants to Australia are not unwelcome but it is reasonable to select them with weight given to the benefits that current residents of Australia get from such migration. This means a highly selective intake not a whoever-turns-up intake that reflects phoney humanitarian claims. Howard was right – Australians should have an absolute right to determine who settles in Australia.
Nor (as Adrienne Millbank correctly argues) is this any of the UN’s business either. Whatever its original intentions the UN Convention on Refugees fails to define a sensible and fair role for a country like Australia. It should be revised by the UN or explicitly repudiated by Australia. Moreover the bleating of the over-paid UN hacks about Australia’s alleged lack of humanitarian concern should be rejected as the codswallop it is. This bleating has helped worsen the difficulties of maintaining a reasonable Australian humanitarian program. Neither the UN or leftwing intellectuals who treat Australia as a social experiment should determine Australia’s humanitarian and refugee intake – the people of Australia should. They will register their vote later this year.
April 22, 2013
I agree with The Australian’s editorial (for once). We don’t want immigrants or those entering Australia via the refugee and humanitarian program to be people who despise our democracy, our legal system and our tolerant society. It is reasonable to be totally intolerant towards their intolerance. Of course we don’t want those fanatics who will harm us with bombs but nor do we want bigots who do not appreciate the value of living in a pluralist democracy with religious tolerance. It is a serious issue, we have too much to lose and, as ASIO suggest, have already lost by allowing foolish liberalism to drive our migration and refugee intakes.
Look at the foolish pleading in that last link. It is dressed up as a news story but uses language that suggests, without any evidence, that ASIO is lying. It seeks to make a mockery of what is sensible caution.
Update: the left-wing commentariat have identified the source of the difficulty in Boston. It is the “NRA” (Bob Ellis), or “young men” (Andrew O’Keefe) or independent local terrorists (Waleed Aly). Has any likely aggressive group been left out? I don’t think so – nothing I could think of.
Moreover, Aly congratulates us for “maturity” in our attitudes toward terrorist killings. The problem outside Boston? Well that is racial and religious stereotyping and Aly says we are growing-up and not doing that much anymore. Thanks Aly. We all appreciate well-crafted apologetics that deflects attention from inconvenient concerns.
If I hold my hand out do I see 5 fingers?
November 23, 2012
Government policy is now allowing businesspeople who will make a business investment of $5m in Australia to gain entry to Australia as an immigrant. Critics have described the policy as an immoral sale of entry rights. It isn’t really. The policy in the main provides a signal of the applicant’s entrepreneurial or business skills which are difficult things to identify. Since the $5m investment remains the property of the applicant, interest income from the investment proceeds to him or her. Australia then gets effectively zilch, at lerast from the investment – preexisting Australian residents get nothing and all income goes to the new entrant so it is a policy of seeking to signal skills and hardly a policy of “selling’ visas. To the extent that capital markets are perfectly mobile internationally the $5m investment will induce a capital outflow of $5m so there is no net addition to the local capital endowment either. All investment gains – apart from business skill externalities – accrue to the newcomer and australia does not end up with a larger capital stock. (more…)
November 22, 2012
I have posted repeatedly in the past on the foolishness of the Labor Government’s solution to the asylum seeker problem and the virtue of the Howard Government’s “Pacific Solution” which meant almost no illegal arrivals (here, here, here, here, here, here, here, here and particularly here, here etc). For my troubles I have been labeled a racist (and worse) and been told that my concerns over the “trickle” of illegal migrants lacked balance. But it is no longer a trickle – over the last 8 weeks 7,500 asylum seekers have arrived. This is about half the legal annual refugee and humanitarian migration intake in recent years and, admitting these queue jumpers, will displace those seeking legal resettlement. It is grossly unfair outcome to the citizens of Australia (who have the right to determine who comprises their population) and to those seeking legal resettlement. (more…)
September 21, 2012
We have been selective in sections of our immigration program – for example the business program discriminates on the basis of wealth. But if one raises the case for not favouring the admission to Australia of those who come from violent societies where our democratic values and belief in religious tolerance would get zero respect then one runs the risk of being described as a racist or a bigot. I am neither but I do favour discrimination in our intake policy against those who (for whatever reason) oppose our open society. This has nothing to do with racism or with, to be specific given current controversies, anti-Muslim sentiments.
I strongly endorse the comments of Graham Richardson in this morning’s Australian with respect to the violent thugs who invaded Sydney recently because someone in the United States had made a stupid, offensive film. These thugs were looking for a fight and had no reasonable gripe at all. Quote from Richardson:
“I am sick and tired of hearing these young blokes described as being disenfranchised and alienated as if they are the victims. This is rubbish. No one alienated or disenfranchised them – they chose to stand apart. Whenever they refer to the rest of us as infidels, they give the game up. If this is such a shameful country you wonder why they are so desperate to get here?”
Yes Graham it is hard to “put this genie back in the bottle” but we should at least learn from our mistakes. Almost all Australians Muslims oppose the actions of these thugs so there is no case for restricting Muslim immigration per se. But the character of immigrants needs to be assessed so that we do not import violent thugs who despise our society and seek to operate as outlaws within it.
One thing that needs to happen is that data on the links between crime, ethnicity, economic background, prior exposure to armed conflicts and other variables needs to be made available to immigration researchers. Political correctness, an uncritical acceptance of any type of cultural diversity and a belief that Australia bears substantial responsibility for those involved in civil conflict anywhere in the world is leaving Australia vulnerable to creating a society most Australians do not want.
June 29, 2012
Jessica Irvine in the SMH suggests that we simply “open the gates” to all refugees/asylum seekers. There are around 40 million of them but her argument seems to be that we are a rich country and the demand for entry to Australia specifically is currently only of the order of 50,000 per year. Of course demand for immigration by humanitarian migrants will be low because of the low scale of the current quota. With open door policies it would be vastly higher. Irvine is reproducing the same wrong argument that is used to criticise offshore processing policies – why bother when there are only several thousand boat people per year. Again without current restrictions the number of boat people will be vastly higher.
It is interesting that although Irvine argues for open door on the basis of economic gains she rejects outright the claim that increasing the humanitarian quota to 20,000 would be too expensive not on the grounds that to do so would be too expensive (it would, in fact be very expensive*) but on the feeble argument that “nobody can put a price on lives”. Why not then drop the nonsensical and hypocritical claim that such a move would be economically beneficial and simply say that anyone can come to Australia because you cannot price human life? Because that is what Irvine’s argument reduces to in the absence of implied economic or other benefits.
Of course the more fundamental reason for not admitting anyone who wishes to come to Australia is the disastrous implication this would have for the functional distribution of income between labour and property. An even more fundamental reason for objecting to the Irvine proposal is that most of the current residents of Australia would not want such an influx of people. I don’t. The views of current Australians are of importance when considering immigration policy.
* There are pervasive adverse selection incentive issues that arise when open door policies are offered to a country with a generous social welfare system. Many humanitarian migrants have low skills – particularly English language skills – that are expensive to impart. Admitting many unskilled migrants would have employment consequences that fell hardest on unskilled members of the Australian workforce.
June 27, 2012
It seems yet another boatload of people has faced the possibility of sinking in Indonesian waters but, with the distinctive features that: (i) The attempted sinking (it seems) was engineered by those on board and; (ii) that those on board had the foresight to have satellite phones with the phone number of the Australian Federal Police (not the police in Indonesia) on board and made ’emergency’ calls to the latter to have themselves ‘rescued’ by Australian vessels.
What we can expect I assume are for the legions of lachrymose Australian politicians and refugee advocates to wail and moan about the moral culpability of Australia for creating this contrived situation! It is obviously no such thing. However, as a consequence of their actions and the prompt Australian naval response, those on this boat who didn’t drown will now jump to the front of the queue for consideration of their refugee status to Australia. This is a destructive and inefficient instance of moral hazard in public policy.
The hysterical and hypocritical views of Australian politicians (and their lachrymose wailings) are driving this situation that creates costs for Australia, unwanted arrivals and deaths among those seeking to manipulate public policy in this way. People who engage in such behaviour should never be considered for settlement in Australia and Australia should only agree to rescue them if they agree to be immediately returned to Indonesia who also needs two agree to accept them.
Being tough here and demanding due process for Australian entry means that it is Australia who determines who comes here as a refugee – an absolutely central consequence of our legitimate status as a nation state – it also saves the lives of those who engage in such manipulative schemes.
May 8, 2011
The Gillard Government does finally seem determined to address the “people smuggling” issue. The deal is to send the next 800 illegal migrants (almost all “queue-jumpers” seeking a better lifestyle) to Malaysia in exchange for accepting – over the next 4 years – 4000 refugees from Burma currently held in Malaysia. These Burmese refugees will be accepted even if 800 queue-jumpers are not sent to Malaysia. The cost of implementing this policy will be $292 million or $365,000 per illegal immigrant. The Burmese immigrants accepted will raise Australia’s refugee intake to 14,750 which is the highest since 1996.
I agree with Tony Abbott on this one. This deal is a good one for Malaysia and a lousy, expensive one for Australia. Australia is a nation populated by the people of Australia. It is not international common property or a policy instrument of the United Nations – Australians should determine who comprise the Australian Nation and if that involves repudiating UN agreements so be it. Almost all queue jumpers should be given a one-way ticket home. As it stands almost all now gain refugee status at the expense of those who seek legal resettlement. This motivates the illegal flows and the people smugglers.
March 18, 2011
I’ve spilt a lot of printers ink on this topic over the years. Here is a draft of some notes I prepared for a Productivity Commission meeting next week. Comments welcome. (more…)
August 8, 2010
For the most part I have refrained from entering into the current discussions on migration and population targeting. My preferred approach to these issues – as an economist – is to recognise the potential for economic gains from migration and population increase and then to look for policies that guarantee resident Australians will be better off as a consequence of such changes.
Demographer Peter MacDonald from the ANU and I gave talks on these issues to the Faculty of Commerce, Leaders Forum at Melbourne University. The powerpoints for my talk are here.
July 22, 2010
Mark Crosby over at Core Economics has a post on population economics that created stress for me. Stress because it argues an intellectual position I (and many others) have being trying to combat for many years. (more…)
November 4, 2009
An excellent article on asylum seekers by Ken Parish. I agree with the central argument that queue jumping should be prevented. John Howard was right – Australia should determine who becomes a citizen of Australia.
‘Asylum seekers brought to Christmas Island and found to be genuine refugees should not be automatically granted a visa entitling them to move freely within Australia. Instead they should be given a Christmas/Cocos Islands visa entitling them only to live on one or other of those Australian offshore islands until a place can be found for them in the ordinary offshore humanitarian migration programme’.
Heading into Australian waters should not give anyone the inevitable right to apply for refugee status. This is queue jumping since other applicants under the refugee-humanitarian program do not enjoy this right. It also denies our national soverignty as a nation and places the entire migration program in peril. Opinion polls suggest Australians agree with these views.
May 17, 2009
One of the worst policies of the Hawke/Keating era in Australia was its migration policy. Bob Hawke was a garrulous cry-baby with his eye keenly on the ethnic vote. Hence he, as with many former governments, promoted ‘family-based’ rather than ‘skilled-migration’ to Australia on the basis of ‘family-reunion’ principles*. If the economy soured a little then the demand for skilled intake would slow but any ‘deficiency’ in migration intake quotas would be filled with family-based migration. The intakes included unskilled Lebanese and others who came in under ‘family’ migration entry and who would vote Labor – as would the ethnic lobbies supporting such migration – so it seemed like a smart political move to Hawke. Of course Australia was left with a underclass of largely uneducated, near-unemployables. (more…)
April 16, 2009
There is no doubt that Labor policy ending the Pacific Solution on queue-jumping migrants has encouraged illegal migration to Australia. Labor is seen as ‘softer’ on border control than was the previous Howard Government despite the stench of hypocrisy amid talk of ‘toughness’ from the Labor faithful. Whatever people may claim about the Howard policy it did stop illegal migration to Australia at the same time that the humanitarian component of the immigration intake and the immigration intake as a whole were liberalised substantially. Prior to these initiatives illegal immigrants numbered in their thousands.