The last time I found myself in agreement with Gerard Henderson two weeks running, Paul Keating was Prime Minister and you could only read newspapers in physical form. But following last week’s tilt at our economic Eeyore Steve Keen, he has wisely today called for the maintenance of high levels of immigration until economic data shows a need for a reduction. He also suggested that the Federal Opposition avoid exploiting the issue.

Henderson is obviously right that continued high levels of immigration will buoy demand, particularly for housing, through any downturn, softening its impact.

There are longer term reasons for sustaining a strong immigration intake as well. While we’re all focussed on the looming slowdown/recession/depression (take your pick depending on your temperament and the latest stockmarket movements), the world’s economic trajectory of recent years will resume at some point, even if not quite as quickly as in recent years.

China and India will continue their rapid growth. Australia’s role as a major energy and minerals exporter will continue along with it. Only, by then, our workforce will have aged even more. Our need for skilled and semi-skilled labour will be even greater. Barring an unemployment crisis of Keensian proportions, we’ll be back up against the limits of our workforce capacity before we know it, feeding into inflation again.

A worldwide recession is the ideal time to try to lure the world’s best skilled workers here – the engineers, the doctors, the scientists, the academics and teachers — who will add significantly to the country’s productive capacity. Any slowdown should be used to address the structural problems that will re-emerge in the economy once growth takes off again.

It won’t just be the Pauline Hansons and green fundamentalists who will object. Trade unions, which already object to 457 visas, will complain about the impact of high immigration while unemployment is going up.

And as Henderson notes, the Opposition is already calling for cuts. Sharman Stone succeeded the retiring Chris Ellison and immediately picked up his theme that the Government had thrown open Australia to hordes of boat people by amending its detention policy. Then she called for a 25% cut in immigration, much to the chagrin of business groups. So much for serving the Coalition’s business constituency.

One of the reasons the Howard Government was — contrary to perceptions — a high immigration government was that the ALP never played politics with the issue, however much its union allies succumbed to the temptation. The Coalition should show the same responsibility.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey