Migration, and particularly temporary migration, is emerging as a key issue in the shape of the post-pandemic Australian economy, and the idea is deeply worrying to business and supporters of neoliberalism.
Kristina Keneally’s weekend suggestion that post-pandemic migration policy should be different to our pre-virus emphasis on high permanent and temporary migration induced an immediate and hysterical reaction today from the Financial Review, which accused her of sounding like Pauline Hanson.
The froth-mouthed reaction from the editor of the AFR is informative, however — it illustrates just how crucial high immigration is for neoliberalism.
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The individualist, market-based principles of neoliberalism require free movement — of money, of goods and services, of individuals. Investment needs to be able to go wherever it will be most profitable. Goods and services need to go wherever they are most valued by the market. And people need to be able to go wherever they can maximise their economic value.
The only problem is, the world hasn’t had open borders for more than a century. Nation-states insist on having what are, from a neoliberal perspective, childish displays of nationalism: they stop people from entering any country they like, they restrict investment flows in their (so-called) national interest and insist on preferring their own goods and services over those of others. Now, of course, virtually all movement across borders by people is completely suspended.
Restrictions on immigration are, in the view of neoliberals, particularly damaging. Everyone suffers: the poor individual from a developing country prevented from moving to a wealthier country to make more money, and the economy of the wealthier country that misses out on the additional economic growth from migration. And business suffers, because migrants expand the pool of labour, add whatever skills they bring to the market and put downward pressure on wages.
Temporary migration is particularly good: temporary migration based on particular skills can address skill shortfalls in key industries, keeping costs down; temporary migrants benefit from higher wages than they might earn at home, but the host society doesn’t have to look after them after they retire, or fund their health costs, or welfare costs if they lose their job.
And if they don’t speak the local language, or don’t understand how local institutions work, they’re more easily exploited, putting yet further downward pressure on wages. Australia’s wage theft epidemic is particularly severe on temporary foreign workers and foreign students, who are exploited by at least a quarter of employers, and often far more, in industries like hospitality and horticulture.
But as will be readily apparent, this affection for open borders sits poorly on the traditional ideological divide.
Neoliberals are at home on the right, but many conservatives view tight border controls as a core part of sovereignty, and high immigration as a threat to social cohesion (despite many decades of evidence in Australia that it isn’t).
On the left, unions see the direct threat posed by high temporary immigration to their members. Parts of the Green left (or the Sustainable Australia Luddites) see all immigration as a threat to the environment. But there’s also a “let them all come” section of the left that objects to border controls of any kind.
The post-pandemic migration debate will thus be the ultimate gathering of strange bedfellows, pitting business (especially sectors like IT — think media darlings like Atlassian), neoliberals and left-wing open-borders sentimentalists against traditional border control conservatives, unions and some environmentalist/sustainability types.
The premiers of NSW, Victoria and Queensland (of which Keneally used to be one) will be interested bystanders, given they will have to find ways to house and service immigrants — or cover the revenue shortfall that will come from lower immigration.
The debate has hitherto been conducted mainly in abstract: over the last 15 years, even despite the financial crisis and a prolonged period of economic stagnation since 2017, Australia has had relatively low unemployment, albeit with an overly high level of underemployment. Despite that, Labor pushed back against temporary migration twice in that period, once in government, and once in opposition under Bill Shorten — so successfully that the Turnbull government was forced to dump the 457 visa category.
If Labor could achieve that when unemployment was low, the period of high unemployment ahead offers considerable opportunity to inflict a lasting cut to temporary migration — especially as the government will have to take a conscious decision to re-open borders and resume migration, something that as Keneally notes has never happened before.
Past debates — which featured the Coalition hurling accusations of racism and hypocrisy at Labor — may end up looking fairly innocuous compared to the coming argument over how many migrants Australia should allow in as we recover from an economic catastrophe.