If you're against immigration, you're against building a better Australia - and here's why, writes Alexander Downer.

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ONE of the things I like about Australia Day is the way our politicians praise Australia's cultural diversity, its tolerance and its welcoming of migrants from all over the world.

Julia Gillard was saying it this year in Canberra and Tony Abbott had a similar message in Adelaide.

Good on them. They are right. People from across the world have for generations found freedom, peace and prosperity in our country. And for so many of them, they have broken the ugly chains of discrimination. What's also interesting about Australia is that its general ethos of both the rule of law and tolerance has helped migrants leave their prejudices behind them.

Greeks get on with Turks, Croats interact with Serbs, Indians and Pakistanis reconcile, Iranians and Arabs live in peace, Jews and Muslims work side by side with Christians and Hindus.

For those of us who have spent years wrestling with deep-rooted international problems, it's remarkable to see how people can live harmoniously together once they are put into a fresh environment.

When I was a child, my father was the minister for immigration. He used to boast about the large numbers of migrants he brought to Australia. He regarded high numbers as a badge of honour.

The more the better.

And he had another view. He understood that bringing people from different cultures into what had been a predominantly Anglo-Celtic society made Australia a more interesting and creative country. He relished the contributions Greeks made to business, Italians made to the arts and cuisine and so on.

In recent years, immigration has become less fashionable. That's a pity. If you are against immigration you are against building a better Australia. Skilled migrants are an essential component of a growing society. Let me explain why.

For a start, there are the simple economic arguments. If our population were to decline then the domestic market would shrink, property prices would fall, the housing industry would go into recession and our wealth would decline.

Second, immigrants inject ideas into our society. And the more we can attract the best and brightest from around the world the better.

Smart people will build businesses, create jobs, improve our intellectual life, expand the arts and, of course, improve our cuisine.

By 2050 the world's population is expected to stop growing. Already the populations of many Western countries are declining. So is Japan's. So for those countries to continue to prosper and grow, they'll need to hunt for migrants. My guess is that in 20 years there will be an intense competition between countries to recruit skilled migrants. The countries which can't attract the best and brightest will run the risk of falling behind.

Now, let's face it, not all immigration is a success. Skilled migrants who bring ideas and talent we don't have or don't have enough of are invariably going to be a success.

If they can speak English, are literate and generally show a willingness to fit into the prevailing values of our society, that's one thing. But migrants without skills and who don't speak our language will drift into ghettos and be unable to find regular work. This is what has happened in much of Europe.

The results aren't pretty. The migrants themselves become marginalised, alienated and generally unhappy. The locals become resentful and even hostile to the migrants. Then anti-immigrant parties spring up, mainstream politicians start winding back immigration programs and, in the end, the whole society suffers. In other words, an unregulated immigration policy can be disastrous. Whereas a regulated, efficient, targeted immigration policy can be a triumph.

In general, Australia has done pretty well in recent years. We've brought in a lot of migrants by world standards, our population has been growing to the benefit of our living standards and many of the migrants have enriched our society.

Sure, there have been some down sides. In Sydney and increasingly in Melbourne, there are complaints that the growing population is placing enormous stress on an ageing infrastructure. That is the price of success.

This brings me to our own state of South Australia.

In 2010-11, 213,000 permanent arrivals came to Australia. Most of these migrants went to New South Wales, Victoria and Queensland.

Only a trickle came to South Australia. There were 11,000 permanent arrivals who came to our state in 2010-11 and that was 23 per cent fewer than had come the previous year. Sixty per cent of the 11,000 were skilled migrants.

This poor local record in attracting migrants is in spite of the Federal Government making it easier for people to migrate to SA than the eastern states. What is more, the State Government has a policy of trying to attract migrants.

It has a nice website with the enticing slogan "South Australia; Make the Move". The trouble is, not many do.

Smart migrants could have a decisive impact on our economic prospects. Here's an example. A senior executive from a major British company decided to retire in Adelaide. He chose Adelaide for one reason. He thought it was a great place. He came as a business migrant. Not being a very retiring retiree, he set up a business which developed interests in Japan and the US. He employed local people. And there you are. A new, creative business emerged in SA because of immigration; skilled immigration.

So if we could multiply that example hundreds of times it would give our state a real boost.

The SA business community should be out there promoting migration. More migrants would boost our flagging property market, kick up retail sales and encourage new investment. Every city in the Western world which has enjoyed a revival has done so because a few creative people have moved to that city. We need to think about that.

Alexander Downer was foreign affairs minister in the Howard government from 1996 to 2007

Originally published as Downer: Immigration makes our country better