Economists say immigration is good for Australia

by mfafadmin on March 6, 2017

in Australia Immigration

Immigration and visa rules are set to continue to be major topics in Australia with calls continuing for a tightening up of the system but economists are backing growth.

American President Donald Trump has just praised Australia’s point-based immigration system but there are plenty of people in Australia who would like to see it made tougher.

The camps are split between those, like One Nation leader Pauline Hanson, who would like visas restricted on various grounds, including religion, and Commonwealth Bank chief interest rate strategist Jarrod Kerr who believes that immigration helps the economy.

But even Australian Immigration Minister Peter Dutton is open to being more strict. He has been accused by some of wanting to introduce a Trump-like ban on certain people on the grounds of religion, race or ethnicity, but he has denied this.

Opposition politicians claim that plans to check the health, character and employment of people from China taking up the option of the new 10-year visa currently being offered as part of a pilot scheme could set a precedent that would then apply to other visa holders.

They are worried that people could be targeted on the basis of their place of birth, passport or religion, the very kind of screening that Trump is currently under fire for trying to introduce in the United States.

But Dutton says plans to scrutinise holders of the 10-year visa were nothing like Trump’s controversial immigration ban. He described the claims as ‘hype’ and said it is perfectly reasonable to introduce checks for the scheme.

But Australia should be welcoming young immigrants, according to Kerr, who argues that countries like Australia are undergoing a seismic shift in demographic terms as baby boomers retire and that population growth is important for economic growth.

He explained that in much of Western Europe and Japan, there are not enough people being born to replace those dying, so their economies are unable to replace the people who leave the workforce, causing a fall in both economic growth and inflation.

He believes that a large annual intake of immigrants means the Australian economy has a steady supply of young people to fill the gaps left by those retiring. ‘That’s why we have higher potential growth rates here, higher interest rates here and a potentially stronger currency over time. It’s a big part of our story, it always has been,’ he added.

Reserve Bank governor Philip Lowe also supports immigration. He told a Federal Parliamentary Committee hearing that immigration is a source of strength for Australia and added that he thinks populist and anti-immigration politics pose a huge risk for Australian economic growth.

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