In John Howard’s infamous formulation, we decide who comes to this country; but what are the criteria? How should we decide who we let in, in what numbers? And where will they all live? From white Australia to One Nation The disconnect about population and immigration is understandable for a young nation of migrants. Half of us were either born overseas or have at least one parent who was. Only Switzerland and Luxembourg boast a higher ratio. Loading Despite a history that includes a white Australia policy, the emergence of One Nation, and a political preoccupation with refugees in boats, few countries have managed immigration as well as Australia. The OECD has said as much.

Few are as fast-growing and urbanised, either. Australia’s growth is among the highest in the rich world, but unlike other countries is focused on just two cities, Sydney and Melbourne. The latter has a 3 per cent expansion rate that would, if left unchecked, give it a London-sized population by mid-century. We’re increasingly acknowledging the squeeze on house prices, transport, services and the environment. Three or four years ago it would have seemed impolite to say “we’re full”. Now it’s a common refrain. Until the last year or two, Australia had resisted the toxic immigration rows threatening democracies in Europe and which helped deliver Brexit to the UK, a far right revival in Germany, and Donald Trump to the US. Demonstrators hold placards during a protest against Donald Trump in central London earlier this month. Credit:Bloomberg But population pressure has brought immigration to centre stage in Australian politics, egged on in particular by conservatives in the Turnbull government, including former prime minister, Tony Abbott.

Home Affairs minister Peter Dutton, in particular, has heard and stirred discontent. Amid calls for the fast-tracking of immigration for “persecuted’’ white South Africans and action against “African gangs’’ in Victoria, he has slashed approvals for permanent migrant arrivals, replaced 457 temporary work visas, and hinted at yet tougher rules on other visas. Experts now see big cuts to immigration as inevitable under the Coalition. But what is the rationale? How should such decisions be made? More consumers, please The Yugoslavian ship, Partizanka, arrives in Sydney carrying migrants, 18 January 1948. Credit:Fairfax libary Populate or perish was the warning when, 70 years ago, Australia came out of World War II as a nervy nation of just 7 million on a massive island continent with vast, unguarded borders. Immigration would be our saviour.

Population – and we’re now 25 million – was always about money too. It was customers for bread and clothes, computers and houses, for companies like Coles, Woolworths and AV Jennings. Population growth is a combination of natural increase, births over deaths, plus net overseas migration – the difference between the annual intake and outflow of migrants. Because we have a low birthrate, immigration is the major contributor to our growth, and (apart from Peter Costello’s “one for the country” exhortation), the only real lever governments have to affect it. The most important lobby group in the population and immigration policy debates is business. For decades it ensured the lever was set on “open” to keep the customers coming. The permanent immigration program – the target of 190,000 has been rebadged a “ceiling” by the Coalition – encompasses skills, family and refugee/humanitarian programs.

Then there is the uncapped temporary immigration. This includes myriad visas, through which Australia plays host to about 1.5 million people at any one time, including students, working holiday makers, temporary skilled and unskilled migrant workers. About 50,000 more temporary migrants arrive than leave every year, giving us overall immigration of about 240,000 annually, a high level internationally. Many temporary migrants are students, contributing to a burgeoning education industry. Credit:Imaginechina No one questions that such a big intake adds to Australia’s annual GDP growth. And, says Brendan Coates from leading think tank the Grattan Institute, population growth “makes the numbers look good for governments keen to avoid the stigma of a recession’’. But GDP tells us nothing about how population growth affects our individual wellbeing.

The more important measure is GDP per capita, or per person. Important here is the fact that, since the Howard years in particular, Australia’s immigration policy shamelessly focuses on skills and youth. Migrants tend to be younger than the existing population and, therefore, more likely to work. Around 84 per cent of migrants who arrived in 2015-16 were aged under 40 years compared to 54 per cent of the resident population. Loading Through their relative youth, migrants help slow the ageing of the population – it's known as the “demographic dividend" – giving Australia an economic edge over fast-ageing, low-immigration countries like Japan. As migrants tend to be more skilled they’re also likely to be more productive.

“Inherently they tend to have a lot of ‘get up and go’,” says Coates, “because by definition they’ve already got up and gone.” Young workers are also at the stage of their life when their taxable income is usually at its highest, but their use of government services such as health, education and aged care, at its lowest. Many, temporary migrants in particular, are not entitled to services and benefits, including welfare and Medicare. In fiscal terms, therefore, migrants are a boon to both federal and state coffers. Milking the immigration cow Abul Rizvi has been immersed in immigration policy for decades, including as immigration department deputy secretary in the Howard years. He says Victoria and NSW have been big winners from immigration, especially from legions of international students.

“That’s why we call education an export industry,’’ he points out. “People who come here more than pay their own way. We make a profit from them.” Possibly too much so, given research, including by The Age/SMH, that points to systemic underpayment and exploitation of low skilled workers on temporary visas, especially in hospitality and farm work. Loading To date, however, there has been little clear evidence of the wider impact of permanent migrant workers on wages or jobs. After commissioning research for a major 2016 immigration report, the Productivity Commission concluded that, at an aggregate level, recent immigrants had a “negligible impact’’ on wages and employment for existing workers.

So within the narrow economic parameter of per capita GDP, immigration is a significant benefit. In 2015 the government’s intergenerational report found that in the preceding 40 years, population growth contributed almost 18 per cent of the 1.7 per cent annual average growth in GDP per capita Australia has enjoyed. Looking forward, the Productivity Commission in 2016 estimated that continuing the intake of younger, skilled migrants could make GDP per capita up to 7 per cent higher in 2060 than if there were zero net migration over that period. A cut in immigration, therefore, would almost certainly mean a reduction in economic growth, both in aggregate and per capita terms. How big the impact would depend on how deep the cuts ultimately prove to be, and from which programs. In the government’s pronouncements so far, they have not made this clear.

Traffic congestion is chronic in Australia's major cities. Credit:Josh Robenstone However, national GDP figures tell only a part of the population cost-benefit story. They do not, for instance, account for the fact that immigrants congregate in two major cities. And from the perspective of Sydney and Melbourne, the view is very different. In the decade to 2016, Australia grew by more than 6 million, with capital cities taking three quarters of the increase. Melbourne and Sydney took almost 60 per cent, or 3.6 million people. So any increase or reduction to immigration will have outsized impacts in NSW and, especially, Victoria. Permanent migrants in particular are drawn to the high-paying “knowledge" jobs, which are increasingly concentrated in central Sydney and Melbourne, where the share of total metropolitan employment increased to 22.4 per cent and 20.5 per cent respectively over the 10 years to 2016. But housing supply has not kept up with demand, an important factor in the slump in housing affordability, along with government withdrawal from public housing provision and failure to tax windfalls from land rezoning and development.

Census data shows that population growth – mainly migration – outstripped construction of new dwellings across Australia between 2006 and 2016, especially in NSW, Victoria and Queensland. The Grattan Institute says the primary obstacle to housing construction is planning rules that delay or prevent development, especially in the well-to-do, jealously protected, middle suburbs. It says new housing is pushed to the fringe and beyond good transport, services and well-paid knowledge jobs. Where there is public transport, it’s packed. For those without it, travel times have blown out over the last decade, a major burden for commuters and their families. Grattan says governments have not helped with their disproportionate spending on infrastructure in marginal seats, rather than in the cities struggling to absorb population growth.

In a confronting conclusion to a major housing study earlier this year, Grattan found that if planning is not improved to allow for more and better located housing , the federal government should pull back on migration numbers. Water, farms and the beach Expensive housing is just one of the costs of population growth. There’s also the spiralling costs of services such as water, especially when the sustainable use of natural supplies is exhausted and technological alternatives like desalination become necessary.

“This raises the cost of living for the Australian community,’’ concluded the Productivity Commission in 2016. Then there’s the loss of prime farmland and food on the edge of our cities, the loss of habitat and species, declining fish stocks, once-empty beaches now busy, queues, and so on. None of these pressures are factored into GDP assessments of immigration. But they should be measured, says the Productivity Commission, which has called for a national population policy, compiled with the states and wider community, to help guide decisions about our long-term immigrant intake. If poor planning and infrastructure provision is in large part to blame for the population squeeze, and likely cuts to immigration, then governments at all levels are responsible. Marcus Spiller is a founder of economics and planning consultancy SGS. It has prominent practices in Sydney and Melbourne. He says the problem is not that we have too many migrants, but government negligence – federal and state – in housing, infrastructure and planning.

He says the Commonwealth – that would include Peter Dutton and Tony Abbott – lacks a coherent housing or transport policy, has all but vacated social housing, and picks political winners when it funds road and rail projects. Prominent independent economist Saul Eslake is also critical of planning for cities, noting that Australia had faster population growth rates in the post-war boom of the 1950s and 1960s, “And we didn’t have the problems we now have.’' The Turnbull government is now considering calls, including from backbenchers such as West Australian senator Dean Smith, for a population policy. A bird’s eye, national policy to help guide planning, including a strategy for settlement of migrants in country towns and regional cities, could be a major breakthrough in Australian planning across three levels of government. It’s an idea reminiscent of big-picture thinking of the post-war years when, Eslake says, people tended to trust that governments had it right on population, planning and immigration numbers.

Trust in politicians is in short supply these days. As is bipartisanship. And in a world where immigration seems to be bad for political business, if not for GDP, politicians are notably less caring about foreigners. Abul Rizvi says it should be possible for a rational discussion about population and immigration, economics and planning. But he says it takes leadership, skill and courage. "I would have thought the Prime Minister had the skills to do it. The question is does he have the courage to deliver it?’’ The economics and politics of population and immigration are anything but black and white.