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Reserve Bank governor says Australia's high immigration levels boosted economy

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Subscribe today. Subscribe Now. Upgrade Now. In fact, during , the economy was in reverse when measured in per capita growth terms. Once you spread the extra wealth around all those extra people, we've been barely marking time. So much for the boom. Most new arrivals head to where they can find work. That's meant most immigrants have headed towards the biggest cities, Sydney and Melbourne.

Since around , Melbourne's population has swelled by almost 1 million, with Sydney not far behind. Despite the common misconception peddled by shock jocks that new immigrants flock here for social security benefits, most in fact are desperate for work. That puts pressure on wages.

It is little surprise then that in the past decade, housing prices, particularly in the major centres have soared while wages growth now is the slowest since the last recession.

Australia's economy benefit from immigration intake: study - Xinhua |

It's never a simple, linear argument. Immigrants are amazingly adept at starting their own businesses, thereby creating employment. And record low interest rates combined with tax incentives that have transformed housing into a preferred investment vehicle have been the primary drivers in inflating the east coast housing bubble. But there's no denying the failure of successive governments to develop infrastructure that would have facilitated new housing, thereby helping alleviate the dangerous east coast property bubble, and maintained productivity.

In the past week, there has been a clear shift in Federal Government thinking. The scaling back of visas — which undoubtedly have been rorted — and the tougher approach to citizenship appear to herald a new approach to immigration. Once again though, the motivation appears to be more on pandering to electoral and party room prejudice than being sourced in sound economics or environmental grounds. Political posturing aside, it would appear Canberra unwittingly has exposed itself to a far greater problem. Most of our economic growth forecasts have been based on population growth of around , a year; almost a new city.

With the mines now running at peak capacity, resource prices in decline and the east coast housing boom on its final doomed run, a pull back on immigration — the secret weapon in our economic miracle — will leave our leaders with nowhere to hide. To further complicate matters, if productivity is to be lifted, a major infrastructure spend is required; the money that should have been spent all along to cope with the immigration intake.

Perhaps they will be forced to confront serious fiscal issues if they truly want to bring the budget deficit back under control instead of simply relying on endless numbers of new arrivals to inflate the economy and the tax base. Maybe they will get serious about a resources rent tax, rather than idly standing by and watching the nation's riches hauled off for little return. Tax cuts for foreign corporations may take a back seat to enforcing the law on company tax.

And they might even question whether we can afford the enormous tax breaks on superannuation and property investment for the wealthy. Topics: immigration , economic-trends , business-economics-and-finance , government-and-politics , australia. First posted April 24, If you have inside knowledge of a topic in the news, contact the ABC.

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Read it in full. Donald Trump's White House has been in turmoil since its election, but two incidents in the past week ended months of caution over impeaching the President. Do you have a pal who puts your needs last? You could be in a toxic friendship, but these relationships can be improved. By senior national sport reporter David Mark. GWS has gone from competition easy beats to grand finalists — from little things, Giants grow. Allegations of abuse led to a crackdown in Now the category will be eliminated entirely, to be replaced by a new, more restrictive Temporary Skill Shortage TSS visa program in March The visa program was designed to help business fill critical positions when people with appropriate skills couldn't be found in Australia's limited labor pool.

In more recent years, the number one visa occupation has been "cook. It means a cook, usually at a small family restaurant or cafe. A cook prepares a cabbage dish in the kitchen at Aubergine restaurant in Canberra, Australia in August Addressing abuses in the program, which was widely considered a backdoor to permanent residence and ultimate citizenship, the new TSS program is designed to make it much harder for people to stay in Australia.

Occupational mobility among immigrants: the impact of migration on economic success in Australia.

The government has also attempted to tighten up English language requirements for existing permanent residents who want to become citizens. Though it has faced major opposition in the Australian Senate, the Turnbull government plans to push forward with a watered down version of its proposals to limit immigration. Full disclosure: I am myself a permanent migrant to Australia who initially arrived on a visa as a university lecturer, though I have no plans to apply for Australian citizenship.

Luxembourg and Switzerland may have more immigrants than Australia, but most of their immigrants come from neighboring European countries like Germany and France. Their immigrants share a culture and usually a language with the host population.

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As recently as , the same was true for Australia, where the United Kingdom was the leading source of immigrants. But in recent years the picture has changed dramatically. Since , first China and then India became the leading sources of permanent migration into Australia. Data: Australian Bureau of Statistics.

Note: New Zealand immigrants are not included. This shift has coincided with a huge run-up in home prices in Australia's state capitals, with Sydney and Melbourne in the lead. Rapidly rising prices have inevitably led to concerns about existing residents being priced out of the market.