Over the weekend, Terry McCrann attacked Australia’s immigration economy, labelling it a “Ponzi” scheme and imploring policy makers to develop a “new and very different Australia”:

For the past 20 years, our economic growth and prosperity has rested on three foundations. They were immigration-driven developed world record population growth; property and infrastructure construction; and China, buying our iron ore and coal and selling us seemingly ever-cheaper consumer goods… Like all addictions — and I’m talking about the broader one, around the population Ponzi, supplanted by the cheap money — they eventually run too far ahead of the drug. That was clearly happening before the virus hit. We have to exit to a new and very different Australia. One that can work without massive population growth every year; one that can work without massive construction of new apartments and tolled “freeways”. And one that can do that while handling all the wreckage from what’s going on right now. Think about it. Please.

Welcome to the club, Terry.

For too long, Australian policy makers have juiced the economy by importing hundreds of thousands of people annually to work in non-tradeable services industries, alongside increasing household debt. Together, these have driven consumption and malinvestment into property and catch-up infrastructure, rather than productivity, in turn eroded living standards.

Adding roughly one million people every 2.5 years has also diluted Australia’s fixed mineral endowment, in turn diluting wealth per capita and making us individually poorer than we otherwise would have been.

In short, an economy built around mass immigration and population growth is a dumb economy.

The coronavirus pandemic is the perfect opportunity to reset immigration back to early-2000 levels and create a more sustainable Australia built on growth in both productivity and individual living standards.

Lower immigration will lower the Australian dollar and input costs such that Australia grows more by creating and exporting goods and services rather than importing people.

Policy makers must use this crisis to put Australia on a more sustainable path.