Immigration numbers plunge by almost half

NET migration to Australia is in free fall. In two years, migration has plunged by almost half, intensifying the skills shortages that threaten to drive up interest rates.

The Bureau of Statistics reports that net migration was just 171,000 in 2010, down sharply from 316,000 in 2008, and the lowest since the bureau changed its measuring system in late 2006.

Australia's population growth fell to 325,500 in 2010, down from 467,300 in 2008.

On New Year's Eve, the bureau estimates, Australia had 22,477,400 residents, up 1.5 per cent over the year. There has been no let-up in the fall. In the six months to December, net migration slumped 37 per cent year on year, from 121,500 to 77,000, while the Reserve Bank said the economy was close to full employment.

Net migration into Victoria fell even more sharply. In 2010 it slumped 37 per cent, from 76,000 to 48,000, partly reflecting the impact of Indian media coverage of violence against Indian students.

Since 2003, Indians had been the main source of permanent settlers in Victoria.

But in 2009-10, their numbers slumped 14 per cent, and China became the state's main source of settlers.

Chinese (8151) and Indians (7739) easily outnumbered settlers from Britain (4282) and New Zealand (3696).

They were followed by Sri Lankans (2484), Filipinos (2112), Malaysians (1638), South Africans (1477) and Vietnamese (1347). Other bureau figures show the slump in migration has continued in 2011.

The government planned for an unchanged 168,700 family and skilled migrants in 2010-11, and 13,750 humanitarian refugees, but arrivals data shows a far different trend.

In the 10 months to April, excluding New Zealanders, just 83,750 people arrived as permanent settlers, down 20 per cent from 104,700 a year earlier. In 2011 alone, the number is down 17 per cent. The figures suggest that the anti-immigration rhetoric of the ALP and the Coalition in the 2010 election campaign has influenced either the way immigration applicants are being assessed, or overseas interest in coming in the first place, or both.

Opposition Leader Tony Abbott demanded a ceiling of 170,000 people a year on net overseas immigration (which measures the balance between arrivals of permanent and long-term settlers, and permanent and long-term departures from Australia). The Coalition has gone quiet on the issue since, after sharp criticism from its business allies.

A spokeswoman for the Immigration Minister, Chris Bowen, said the sharp decline in net overseas migration reflected immigration reforms that had tackled the potential abuse of student visas and shifted the focus to high-value occupations.

Read more >>

Asian migration a tour de force

AUSTRALIA is now home to more than 2 million people born in Asia - and they are on the brink of overtaking the European-born population for the first time in our history.

New figures from the Bureau of Statistics estimate the number of Asian-born residents in Australia has virtually doubled in the past decade from 1.03 million in mid-2000 to 2.01 million in mid-2010.

In that time, they have made up a third of Australia's population growth. Roughly half have come as students and half as skilled workers and family members settling here to fill gaps in Australia's workforce.

The Bureau estimates that in that decade alone, the number of Chinese-born people living in Australia has more than doubled from 148,000 to 380,000 by the middle of last year.

The number of Indian-born residents has more than trebled in that time from 96,000 to 340,000.

The largest number live in Melbourne, where they now outnumber Italians to form the city's largest non-Anglo community.

The Bureau figures exclude West Asia (from Iran westwards), which the Bureau classifies as part of the Middle East. Migration from that area too has risen sharply, partly due to refugees from the Iraq war.

It is a stunning transformation from the old reality of White Australia, the policy that banned Asians from settling in Australia from the late 19th century until it was gradually dismantled between the mid-50s and mid-70s.

In 1947, only 0.3 per cent of Australia's population had been born in Asia. But their numbers have roughly doubled with every decade since, rising to 2.5 per cent of the population by 1981, 5.5 per cent by 2000, and 9 per cent by mid-2010.

By contrast, Australia's European-born population effectively peaked several decades ago, when Europe became rich enough to remove the incentive to emigrate. It has basically hovered around 2.4 million since, shrinking from 17 per cent of the population to just 10.8 per cent.

British migrants now make up roughly half that total, numbering just under 1.2 million in mid-2010. New Brits keep arriving as the old pass away, but for some years, the number of Australians born in Italy, Greece, the Netherlands, Germany, Malta or the old Yugoslavia have been steadily shrinking.

Within two or three years, the number of Asian-Australians is likely to overtake the number of European-Australians.

New Zealanders remain the second biggest migrant community and just keep coming. By mid-2010 there were 544,000 living here and in 2010-11 they have been the main source of migrants. Migrants from China (380,000) and India (340,000) are now the biggest non-Anglo communities by a large margin. Vietnamese (204,000) are closing the gap on Italians (219,000) to be the next largest.

Net migration overall slumped to 215,500 in 2009-10, down from 300,000 a year earlier. The financial crisis cut the need for skilled workers and the closing of immigration loopholes, the rising dollar and violence against Indian students all cut student numbers.

Read more >>

Melbourne's population explosion

MELBOURNE'S outer suburbs are growing faster than any other area in Australia, part of a record-breaking trend that has seen Melbourne's population closing the gap on Sydney.

The city's outer suburbs are leaving coastal Queensland and Western Australia's mining towns in their dust, as more than 1000 people a week pour into Melbourne's fringe.

New figures from the Bureau of Statistics show that while the boom in overseas immigration cooled off all over Australia in 2009-10, Melbourne was again the centre of Australia's population growth.

. In the year to June 2010, Melbourne is estimated to have grown by 79,000 people, or more than 1500 a week. For the ninth consecutive year, Melbourne had the biggest growth of any city in Australia.

. Since 2001, Melbourne has gained 605,000 new residents, up 17 per cent, rapidly pushing out the urban boundary in every growth corridor. That is far ahead of growth of 447,000 in Sydney, 380,000 in Brisbane, and 303,000 in Perth.

. For the first time in almost 30 years, Melbourne's population is within 500,000 of Sydney's, and gaining. If the growth rates of 2001-10 continued, Melbourne would overtake Sydney in 2028, when each city would have roughly 5.6 million people. At June 30 last year Sydney had 4.575 million people to Melbourne's 4.077 million.

. No other city in Australia has ever recorded growth of this size. It has strained the city's infrastructure and services, adding to congestion on the roads, delays, overcrowding on public transport and waiting times in hospital emergency wards. Some believe it was a key factor in Labor's unexpected loss at the 2010 state election.

. The four fastest-growing municipalities in Australia in 2009-10 were all on Melbourne's fringe. Wyndham (which includes Werribee), Melton, Whittlesea (South Morang) and Cardinia (Cranbourne) left behind all the boom areas of other states, with their combined populations growing by 33,216 or 7 per cent.

Wyndham alone added 12,600 people last year, matching Victoria's entire population growth at one point during the Kennett government. Since 2001 it has added almost 70,000 people, roughly equal to adding a city the size of Bundaberg to Melbourne's south-west fringe.

Last year its growth in absolute numbers almost matched that of the Gold Coast. It puts pressure on the Baillieu government to press on with the new train line begun by the Brumby government, one of the many big-ticket projects under review.

The fall in arrivals of overseas students cut Melbourne's population growth sharply in 2009-10, from 96,000 a year earlier. But the bureau estimates that growth shrank overwhelmingly in the middle and inner suburbs, where most students live. Growth on the outer fringe barely lost a beat.

In 2009-10, based on the bureau estimates, roughly 68 per cent of the city's new people settled more than 20 kilometres from the GPO. That was a sharp rise from 58 per cent over the previous three years.

The NIMBY (not-in-my-back-yard) syndrome continues to limit redevelopment in inner and middle areas. The blockage of supply has seen house and unit prices soar in inner areas, giving lower-income buyers no choice but to live far out.

Over the nine years since Melbourne replaced Sydney as Australia's growth centre, five in every eight new residents has had to settle more than 20 kilometres from the GPO. Of Melbourne's 4,077,000 people at June 30 last year, roughly 1,814,000, or almost half, lived more than 20 kilometres out.

But the inner circle population has also grown sharply, rising by 74,000 or 30 per cent.

The pace of inner urban growth has slowed in recent years, but with a forest of new apartment towers approved over recent months, it appears set to rebound rapidly.

Victoria's growth dropped to 99,000 in 2009-10, down from a record 120,000 a year earlier. Nearly all that decline was in Melbourne, with regional Victoria accounting for a quarter of the state's population growth.

Planning Minister Matthew Guy said the Baillieu government was acutely aware of infrastructure and housing shortages, and promised strategies early in this term to address the problems.


605,411

This is how much Melbourne has grown by in the past 9 years

THAT EQUALS ROUGHLY:

1.5 CANBERRAS

1 GOLD COAST

0.5 AN ADELAIDE

6 BALLARATS

3 HOBARTS

Read more >>

Melbourne's Growing Pains

ONE WEEK out from the Victorian election, Tim Colebatch reports on a city and state in the grip of a population boom that is squeezing infrastructure, services and affordability:

A NEW Melbourne is growing on the city's western fringe. And as Victorians head into next week's state election, in some ways it epitomises what has been an extraordinary decade in the state's history.

In 1993-94, after the Kennett government sacked 30,000 government employees, Victoria's population growth sank to as low as 12,680. Yet 15 years later, the population of a single municipality Wyndham, centred on Werribee grew by 10,758. Melbourne's growth in 2008-09, at first estimated at 93,478, now looks to have been closer to 100,000. And the latest estimate for Victoria's growth is 121,229.

No city in Australia has seen growth on the scale Melbourne has experienced in the past five years. In that time, the city's population has risen by 400,000 or more. And Victoria's population has grown by more than 500,000, or 10 per cent, twice as much as it did a decade earlier.

Since Labor was elected in 1999, the state's population has expanded by close to 20 per cent, from 4.7 million to 5.6 million. Is it any wonder that we are now seeing a state election campaign being fought largely on the failure of state government services to cope with surging demand?

The epicentre of Victoria's population growth is in Melbourne's outer-western suburbs. KPMG demographic guru Bernard Salt has declared it the fastest-growing region of Australia, outpacing even the Gold Coast. In 2008-09, for probably the first time since the 1800s, most of Melbourne's population growth occurred north and west of the Yarra.

But Salt highlights a crucial difference. The Gold Coast's population boom, he says, was based on lifestyle. "For Melbourne's west," he says, "this fundamental truth is affordability. But . . . affordability must be triangulated with job opportunities, and with quality-of-life issues that deliver social infrastructure such as schools, shops, a sense of community and public transport."

And that, so far, is a promise yet to be delivered.

Across the flat empty fields west of Laverton, you find Truganina. It is one of Melbourne's most affordable suburbs, and one of its fastest growing. Sudanese refugee Ayan Majok moved here in 2008 with her husband and five children. Last year fellow refugee Hawa Mahmoud and her husband and seven children moved in next door. Both women complain about the lack of services, which has turned the street into the children's playground.

"We don't have a park for the kids to go and play in," Majok says. "There's no school around here, no shops around here, no petrol station and now we have a bus, but not many services. If you don't have a car or the car breaks down, you have to walk 25 or 30 minutes to the shop."

But Truganina was cheap: the Ayan Majok bought a 500-square-metre block for $135,000, and look back on it now as a bargain. "Now the prices are up to $220,000, and the blocks are 400, 350-square-metres," she says. It's a good neighbourhood with "all kinds of people Aussies, Indians, Sri Lankans, Lebanese, Arabs".

The latest Melway map shows a park and school proposed for Truganina: it's just that the people got there first, and they're still waiting. Across Skeleton Creek in the slightly more upmarket suburb of Tarneit, resident activist Shawn Lynch notes drily: "It's always in catch-up mode here. The Baden Powell P-9 College was opened just three years ago, and they've already had to add portable classrooms because they didn't allow for population growth.

"The high school hasn't started yet. The kindergartens are full, and some people had to sign up for a kindergarten as far away as Little River."

And the lack of broadband access in many areas is a big problem. A recent study found Truganina has the slowest internet speeds in Melbourne.

Yet people keep coming, because Truganina remains cheap. The median house price was $325,000 in the September quarter, the Real Estate Institute of Victoria estimates, and around the corner from the Majok home, land and three-bedroom-unit packages are on sale from $295,000. People want their own home, and they have to buy where they can afford it.

And Truganina is just over 20 kilometres from the Bourke Street Mall: no further from the city than Mitcham, Glen Waverley and Beaumaris.

In this state election campaign, the issues and problems raised cover every area. For some, the issue is hospital waiting lists. Between 1999 and 2009, public hospital admissions rose more than 40 per cent, yet waiting lists have mostly kept growing. For others, the issue is public transport: in the past four years, Melburnians have made more than 100 million extra trips on trains, trams and buses, with train passengers alone soaring by 57.5 million, or 36 per cent. After years of little growth in passenger demand, a landmark change in Melbourne's culture has arrived suddenly, catching the government off guard, with overcrowding and late or cancelled services becoming widespread.

For some, the issue is traffic congestion, as population growth and rising affluence lead to hundreds of thousands more cars piling onto Melbourne roads.

For others again, it is street violence, and a sense of diminishing safety.

There are so many issues the $5.4 billion desalination plant, the pipeline to send Goulburn water to Melbourne, the state of schools, and thousands of local grievances that have built up over the 11 years of Labor's rule.

There's a common thread underlying much of this. Rapid population growth, particularly since 2005, has combined with other factors to put serious pressure on the state's services, and the government has struggled to respond quickly enough. That's its job, you might say, and when the population grows, taxes also rise. Victoria's revenue from all sources has more than doubled from $22 billion when Labor took power to $45 billion this financial year.

Yet most of that has come from the relentless growth of Commonwealth grants, as a revenue-swollen Canberra imposes its spending priorities on areas run by the revenue-deprived states. This year, almost half of Victoria's day-to-day spending will be funded by Canberra. But meeting rising demand also requires more capital spending, and the government's ability to do that is limited by a political culture that treats government debt as undesirable, and by a construction culture that has pushed building costs so high as to make urgently needed projects unaffordable.

But how did Victoria attract all that population growth? Let's go back a step.

FROM outside the state, Victoria looks quite different. In the rest of Australia particularly in New South Wales it is widely seen as a success story, a competently run state where things work. Until yesterday's surprising revisions to state growth figures, Victoria was ranked fairly consistently as the fastest-growing of the non-resource states. Thursday's report by the Business Council naming the Brumby government as Australia's most business-friendly government is in the latest of a range of commendations from business and economists.

Two crucial areas exemplify Victoria's strong performance. Over the past four years it has generated 278,000 new jobs, more than any other state, and 28 per cent of the nation's job growth. Full-time jobs have increased by 2.1 per cent a year, including the period of the global

financial crisis, and total employment by 2.6 per cent a year, both second only to booming Western Australia.

New home building has been spectacular: one in every three homes approved in Australia over the past two years has been in Victoria, 34 per cent of the nation's housing construction activity, rising to almost two in every five so far in 2010-11. In the past year, councils in Melbourne approved 44,194 new homes more than their counterparts in Sydney, Brisbane and Adelaide combined.

Construction has been one of the industries picking up the baton of growth as the high dollar and government indifference has meant the stagnation of Victoria's manufacturing industry since 2002. Another factor has been the foreign student market, with Melbourne the main magnet for overseas students, particularly from India. With Melbourne's image as Australia's coolest city, tourism has soared. Victoria has attracted 38 per cent of the growth in foreign tourists over the past decade. The financial sector, healthcare, the cafe culture, transport and distribution, wholesaling and retailing: Victoria has developed a diversified services economy which has helped it withstand the loss of almost 50,000 manufacturing jobs in the past 10 years.

And with the students came migrants. In the past three years net overseas migration into Victoria has doubled to 227,000, almost as many as in NSW. India and China were the biggest sources, but Victoria has also been the main settling ground for Malaysians, Sri Lankans and of course, the refugees from the Horn of Africa, who have now become a significant presence not only in western Melbourne, but also in cities such as Shepparton.

It is not only our people who are changing: so are our cities. In the past year, Victorian councils approved 19,900 new apartments and units, more than double the 8147 approved four years earlier. Most of them were in high-rise apartment blocks in Melbourne. In the metropolitan area, 18,083 of the record 44,194 new homes approved were apartments and units, roughly 10,000 of them high-rise.

It is a different Melbourne we're building. We're not just building out any more, we're building up. Expansion at the fringe is also booming, but two-thirds of the growth in home building in the past four years has been in apartments and units most of them in the inner-city, where prices have risen fastest, and demand is hottest.

Even before the apartment boom started, the tide had begun turning in. Between 2004 and 2009, a third of Melbourne's population growth took place within 15 kilometres of the Bourke Street Mall. The city centre, bayside, the leafy eastern suburbs, the affordable inner-west: people raced to buy the new apartments, units and townhouses that developers put up wherever they could get a permit.

Between 2001 and 2009, the populations of Brighton, Caulfield and Hawthorn all grew by 10 per cent, Footscray by 17 per cent, the inner-bayside suburbs by 19 per cent while the CBD, Docklands and Southbank population trebled. For the first time in decades, 1 per cent of Melburnians live in the centre of the city.

Yet populations are now growing almost everywhere. Between 2004 and 2009, excluding the area of the bushfires, only six of Victoria's 79 councils recorded falling populations, all in the Mallee and Wimmera. Geelong grew by 15,000, Ballarat 8250, Bendigo 8700, and even the Latrobe Valley added 5000. Virtually anywhere within a two-hour drive of Melbourne has been touched by the population boom, as have the larger cities and coastal areas beyond it.

But that is in the past. As we head into the election, Victoria's economic future is more clouded.

Foreign student numbers have plummeted thanks to the soaring dollar, the end of the backdoor working visa rorts, and the lasting impact of the violence against Indian students.

The Reserve Bank's interest rate rises are hitting manufacturers and exporters with a double-whammy of rising costs and rapidly shrinking returns. Treasury is pressing the federal government to end support for the car industry, which would shut down Melbourne's largest manufacturing sector. And construction activity is surely at its peak.

Another worry is housing prices. One crucial part of Victoria's success story has been its ability to offer affordable housing, compared with Sydney. But as its population has grown so strongly, housing investors have moved in to buy up Melbourne homes, helping drive prices to record levels. The Real Estate Institute of Victoria says the median price in the September quarter was $565,000. The zone of affordable housing has shrunk to suburbs such as Truganina, the outer suburbs with poor services and poor public transport. And while we are now building up the inner city, the building unions make it a high-cost activity, resulting in high-price apartments.

But Victoria's future is what Victorians make it. Melbourne's incredible rebirth from the ashes of the 1990-91 recession was the product of many creative people, each adding their bit, in their own way, to remake the old town as a wonderfully vibrant, alive city.

Whoever forms our next state government will have to nurture that, and foster new sources of growth to take over from those whose time is past.

Read more >>

Immigration slumps, population growth plunges

AUSTRALIA'S population growth is in free fall, with net immigration slumping 37 per cent year on year in the March quarter to its lowest level in years.

The Bureau of Statistics reports that net immigration plummeted from 98,138 in March 2009 to just 61,780 in the same quarter this year. It is the lowest figure for a March quarter since the bureau adopted new definitions in 2006.

For the entire year to March, net overseas migration plunged by 25 per cent, from 320,362 in 2009 to 241,352 this year. Most of that fall was in the last six months, after the Rudd government closed the back door allowing foreign students in low-level courses to stay on as permanent migrants.

Opposition Leader Tony Abbott pledged in the recent election campaign to cut net overseas immigration to 170,000 by 2012. The bureau figures suggest most of that had already been achieved by March, with the trend suggesting further falls in coming months.

Total population growth for the year to March fell by 15 per cent, from a record 471,475 in the year to March 2009 to 403,082 a year later. Australia's population growth rate dropped from 2.2 per cent to 1.8 per cent.

Lower population growth reduces pressure on house prices and urban infrastructure, such as crowding on trains and traffic congestion. But it also implies slower economic growth, and means fewer skilled workers for business. The plunge in immigration was partly offset by a record number of births, which soared to 303,585 as Australia's fertility rate continues to climb towards an average of two children per woman.

By contrast, the death rate has continued its fall to new record lows. Despite the rapid population growth, deaths in the year to March fell from 143,347 to 141,755. Victoria's death toll fell by 2.2 per cent, twice as much as the national average.

The slump in migration and population growth was most intense in resource states. In the March quarter, net overseas migration to Victoria and New South Wales was down 34 per cent in both states, compared with a 48 per cent fall in Western Australia and a 44 per cent fall in Queensland.

It comes as net interstate migration to Queensland has almost ground to halt. In the March quarter the bureau estimates only a net 1430 people moved north, the lowest quarterly figure since 1981.

In an almost unprecedented event, Queenslanders moving to Victoria in the March quarter outnumbered Victorians moving to Queensland. While 4280 Victorians moved north, 4471 Queenslanders moved south.

For the year to March, overall, 2004 more people moved to Victoria from other states than moved out of Victoria to other states. The state's population has now topped 5.5 million, growing by 106,790 or just under 2 per cent. WA was the fastest-growing state for the year to March, growing 2.3 per cent.


POPULATION GROWTH FALLING FAST

YEAR TO MARCH CHANGE

2009 2010 TOTAL %

AUSTRALIA

Migration 320,362 241,352 79,010 25

Natural increase

(Births minus death) 151,113 161,730 10,617 7

TOTAL 471,475 403,082 68,393 15

VICTORIA

Migration - o/s 85,422 68,175 17,247 20

Interstate 288 2004 2292

Natural increase 34,670 36,611 1941 6

TOTAL 119,804 106,790 13,014 11

ALL FIGURES NET

SOURCE: BUREAU OF STATISTICS.

Read more >>

With back door swinging shut, immigration drops

IMMIGRATION into Australia is in free fall, with new figures showing net permanent and long-term overseas arrivals have plunged to barely half last year's levels.

Bureau of Statistics data shows that in the wake of the Rudd government's crackdowns on immigration rorts, net arrivals for the June quarter slumped to 32,700 down from 58,940 a year ago and almost 60,000 in 2008.

A record 81,440 permanent or temporary residents left in the June quarter to live overseas, while just 114,400 new or returning residents arrived, down 15 per cent from last year.

Annual figures show that the sharpest fall has been in arrivals of Indians aiming to live here.

In 2008-09, Indians formed the largest group of new permanent or temporary residents, with more than 80,000 arriving to study, work or settle here.

But in 2009-10, the number of Indians arriving shrank by a third to just 55,000. Fewer than 3000 left, as most Indians who come here to study stay on as workers.

The sharp fall follows reforms to shut the back door by which foreign students in low-level courses such as cooking and hospitality could stay on as permanent residents. It also follows the killing of an Indian student in Yarraville.

For the year to June, net arrivals of permanent and long-term residents plummeted 28 per cent from 336,000 to 243,000. Within that tally, net arrivals of New Zealanders shrank almost 40 per cent, from 30,600 to 18,800, while net arrivals from Britain plunged from 44,600 to 34,100.

The figures pull the rug out from opposition claims that immigration is out of control. They show that the cut they have promised in migration is already happening, and fast.

Opposition Leader Tony Abbott has pledged to cut net overseas migration to 170,000 by 2012-13. That is a different measure from net overseas arrivals, but it follows the same trends.

The latest figures, for the December quarter of 2009, show net overseas migration also fell 28 per cent year on year.

While most of the fall in 2009-10 was in arrivals of temporary residents such as students, arrivals of permanent migrants also fell 11 per cent, from 158,000 to 140,600.

Most of that fall was in migrants from New Zealand and Britain, but permanent migrants from India also fell 10 per cent. New Zealand (18,100) remained our main source of migrants, ahead of China (16,600), India (15,600) and Britain (15,500). A record 4450 settlers arrived from Sri Lanka, many as refugees.


MIGRATION IN FREE FALL

Year Net permanent/ Change

long-term arrivals %

04-05 177,970 8

05-06 199,270 12

06-07 238,260 20

07-08 279,040 17

08-09 336,150 20

09-10 243,090 -28

Source: Australian Bureau of Statistics

Read more >>

Asia-born population matching local born

AUSTRALIA'S Asia-born population was growing almost as fast as the Australian-born population in the year before the federal government cracked down on immigration rorts, new figures show.

The Bureau of Statistics' annual migration estimates show Australia's migrant population rose by more than a million in the five years to 2009, topping the 808,000 growth of the Australian-born.

In 2008-09 alone, the overseas-born population rose by 271,360 or 5 per cent, the bureau estimates. The Australian-born rose by 185,360 or 1.2 per cent.

In a stunning figure, the bureau reports that two-thirds of Australia's net migration was of people aged 15 to 34 helping significantly to offset the ageing of the population.

The fastest growth was in the Indian-born population, which grew by 44,012, or 17 per cent. The Chinese-born grew by 30,009, or 9 per cent, and the total Asian-born population by 172,050, or 10 per cent.

By mid-2009, the Chinese were the largest non-Anglo community in Australia. Their numbers grew by two-thirds in just five years to 350,979.

The Indians were just behind them, with the size of the Indian community more than doubling between 2004 and 2009 to 308,542.

The figures predate federal government moves to shut the back door through which foreign students in low-level courses have stayed on in Australia as workers. In 2009-10, student visa grants have fallen by 70,000 or 31 per cent, with net long-term arrivals showing a similar fall.

The data comes at a sensitive time, with immigration now one of the key issues of the election campaign. Opposition Leader Tony Abbott has pledged to limit net migration into Australia to 170,000 by 2012-13, without saying how.

The bureau finds that in 2007-08, 31,419 overseas students entered Australia to start vocational education and training courses, but only 4064 former VET students returned home.

In all, 135,165 foreign students started courses of one kind or another, but only 26,423 returned home. Part of that was because the industry was growing very fast, but part was because for many, studying in Australia was a stepping stone to permanent residency.

The Howard government opened up this option in 2001 to encourage foreign graduates with scarce skills to work in Australia. But when it extended this to the VET sector, foreign enrolments exploded in cooking, hairdressing and hospitality courses.

Immigration Minister Chris Evans has now closed off this option in reforms to limit skilled migration to those with higher-level skills.

The British remain Australia's largest migrant group, with 1,188,247 permanent and temporary residents in mid-2009.

New Zealanders are second with 529,178 residents.


OUR DIVERSE NATION

WHERE WEVE COME FROM

BIRTHPLACE GROWTH 2004-09, POPULATION MID-09

000 000

Australia 808 16,139

Overseas 1020 5816

Asia 621 1881

South Pacific 126 664

Africa 85 279

Europe 78 2421

Middle East 62 330

Americas 48 241

Total 1828 21,955

India 168 309

China 140 351

New Zealand 109 529

Britain 67 1188

Korea 44 95

Philippines 42 169

South Africa 40 149

Malaysia 31 130

Vietnam 25 204

Sri Lanka 22 87

SOURCE: AUSTRALIAN BUREAU OF STATISTICS.

Read more >>

A failure of leadership

LAST week, pollster Gary Morgan pulled out some old polls like, really old. In 1952, when the postwar immigration program was starting to transform Australia from an Anglo-Irish nation into a very diverse one, his dad, Roy Morgan, found 52 per cent of Australians wanted the immigration intake reduced while only 43 per cent wanted to maintain or increase it.

Did prime minister Robert Menzies change the policy to satisfy its opponents? No, he kept immigration rolling, and gradually Australians got used to it. By 1959, the Morgan poll found supporters outnumbered opponents 59-34 and, by 1969, 64-26.

Why didnt Menzies buckle? Because the Labor opposition supported the policy, which it had initiated in 1947. My father used to send the results to both Menzies and Arthur Calwell (then Labors deputy leader), Gary Morgan recalls. They were at one on this, so there was no political issue.

Fast forward to July 2010. The latest Morgan poll finds 58 per cent of Australians support the official immigration program of 170,000 or want it higher, while just 40 per cent want it lower. Yet our political leaders are doing backflips to appease them.

Why? Because Tony Abbott, after repeatedly supporting high immigration, swung his party behind a scare campaign against its own former policies. It is a failure of leadership. And its a classic demonstration of our inability to produce a bipartisan policy when it is needed.

Another, still more important, was our failure to agree on a policy to reduce carbon emissions as cheaply as possible. That means putting a price on them a carbon tax or an emissions trading scheme so business and households factor it into their investments and purchases to minimise their costs.

Instead, the latest in our dumbing down of policy is Julia Gillards plan to take $394 million out of programs to develop solar energy or carbon capture and storage so she can give $2000 each to people trading in pre-1995 cars for more fuel-efficient new ones. This, she says, will cut emissions by 1 million tonnes and save buyers $344 million in fuel costs.

Two points of basic arithmetic. First, $394 million spent to save $344 million? Thats $50 million wasted. Second, as prominent economist Warwick McKibbin points out, the scheme will cost us $394 per tonne of emissions saved. Weve been talking about carbon prices of $20 or $30 a tonne. A solar power plant or carbon capture and storage scheme would cost a fraction of this price.

Which is more dopey: this scheme or the citizens assembly Gillard proposes to debate what to do about climate change? Mmm, hard call.

I am one of millions of Australians angry that no political party at this election is offering a climate change policy that would reduce carbon emissions as quickly as possible, as cheaply as possible.

Abbott rules out ever having a carbon price, instead proposing a mix of expensive gimmicks which the Climate Institute estimates will fall far short of meeting the bipartisan target to reduce emissions to 5 per cent below 2000 levels by 2020.

Gillard says we should have a carbon price, but only when there is community consensus for it (that is, no political pain).

The Greens want to reduce emissions to 40 per cent below 1990 levels by 2020 that is, almost halving our emissions in the next 10 years. How could we do that? Wed have to shut down nearly all our power stations, find hundreds of billions of dollars to invest immediately to build energy-efficient but far more expensive ones, which would put energy-dependent industries out of business. Thats not a serious policy.

You see why we need bipartisan policies? The Garnaut report should have gone to all party leaders, who could then have thrashed out a policy they would all own, which would last for decades, and give investors the certainty to invest their money in low-emission technologies.

Back to immigration. The Howard government was the author of the high-immigration policy that Howards heirs are now campaigning against. It saw that Australia would need a lot more skilled workers, and that it was cheaper to attract migrants with the skills than to train Australians in the numbers needed. So it made three profound changes.

First, after an initial cut to the official migration program, it steadily lifted it from 67,100 to 158,630 in a decade. Second, in 2001 it made a momentous change by allowing foreign students with skills to stay here permanently if they could line up a job after graduating. And third, it introduced section 457 visas to allow businesses to bring in overseas workers in areas of skills shortages.

These were sensible moves, and won broad support. The only controversy was over rorting of section 457 visas by unscrupulous employers. But a crisis was building. Net overseas immigration which includes the movements of temporary workers and students, as well as permanent settlers, New Zealanders and Australians rose to 306,000 in the year to March 2009.

That number was swollen by rorts of student and section 457 visas, by a net 30,000 Australian workers returning home, and by a red-hot labour market.

Since then, Immigration Minister Chris Evans has ended the visa rorts, and there are fewer jobs for foreign workers to fill. Net arrivals so far this year are down 31 per cent.

Its not the immigration program thats out of control. Its Abbotts inability to distinguish between opposition and opportunism.

Immigration is one of Australias great success stories. Its a bipartisan success story. Why cant we keep it that way?

Read more >>

Immigration promise matches reality, not necessarily by design

FIRST Julia Gillard, now Tony Abbott, are leaning on a door that was already closing — and trying to claim the credit for shutting it.

Abbott pledged yesterday to reduce net overseas migration from its peak of 300,000 to 170,000 by the end of his first term. But he didn't tell us that we're already half-way there.

Net overseas migration has plunged to an estimated 240,000 in the year just ended. So far in 2010, net permanent and long-term arrivals (a broadly similar measure) has fallen by almost a third: from 169,000 to 116,000.

Economic consultants BIS Shrapnel predict this trend will continue.

In May, they forecast net overseas migration of just 175,000 this year, and 145,000 in 2011-12.

They might be right, might be wrong. But if they're anywhere near right, the Coalition's policy is simply to promise what's already happening.

Hang on. Who are the people coming here?

Take 2008-09. That year, 530,000 people arrived to live here — either permanently or long term (that is, for more than year). But 231,000 residents left to live overseas, permanently or long term. So net overseas migration was 299,000.

The official migration program set by the government was just 185,000. In round figures, there were 115,000 skilled migrants, 56,500 family members (mostly partners) of Australian residents, and 13,500 refugees. But they were offset by 75,000 Australian residents who left the country permanently to live overseas.

Most of the arrivals were long-term workers and students. Separate immigration figures show that in the year to June 2009, the number of students living here rose by 69,000. The number of long-term temporary workers rose by 24,000, section 457 visa holders by 8500 and New Zealanders by 27,000.

But wait, there's more. The global financial crisis also saw a net 27,000 Australians return home after working overseas. That will shrink ahead.

Why is immigration now falling?

Two reasons. First, the weak job market means there are fewer vacancies for migrant workers to fill.

Second, Immigration Minister Chris Evans has ended the rort of student visas leading to permanent residency, and the rorting of section 457 visas by employers bringing in cheap Asian labour.

What do the latest figures show?

In the December 2009 quarter, after Evans moved on student visas, net migration fell by 28 per cent year on year. For this year, we've only got the net arrivals figures, but they're down by 31 per cent, more than 10,000 a month.

And in 2009-10, offshore student visa grants in 2009-10 also plunged 31 per cent, or by 70,000 — mostly from India and Nepal.

See what I mean? The door is already closing. How narrow do we want to make it?

Australian education is a big export industry: putting limits on student numbers would be ridiculous. So would denying Australians the right to bring in their partners, or closing Australia to Kiwis.

To cut skilled worker migration would hurt industry. To cut our small refugee intake would be heartless.

Demographer Peter McDonald warns that we are blaming migrants for our failure to plan cities properly. I couldn't agree more.


PUSHING ON A CLOSING DOOR

NET OVERSEAS MIGRATION
Financial year level % change

07-08   277,300 +19
08-09   298,900 +8
09-10* 240,000 -20
10-11* 175,000 -27
11-12* 145,000 -17

IN DECEMBER QUARTER

Dec 07 56,000 +11
Dec 08 68,800 +29
Dec 09 49,200 -28

NET PERMANENT/LONG-TERM ARRIVALS
5 months to level % change

May 08 141,550 +26
May 09 168,970 +19
May 10 115,990 -31

SOURCES: AUSTRALIAN BUREAU OF STATISTICS,
* FORECASTS BY BIS SHRAPNEL

Read more >>

Population: focus turns on middle ground

On population issues, both sides are not so much moving forward as spinning towards the middle ground. They're telling us what they know we want to hear.

Last year, Kevin Rudd and Wayne Swan wanted ''a big Australia''. Tony Abbott on Australia Day wanted ''to extend to as many people as possible the freedom and benefits of life in Australia''.

But now the focus groups have spoken. Most Australians don't want to extend the joys of living in Australia to as many people as possible. They fear more migrants might soak up jobs, add to congestion on the roads, trains and buses, and drive housing prices even higher. They want a little Australia, or at least one that's not too big.

Julia Gillard's speech yesterday was all about reassuring them that she's on their side. She defines Australians as loving ''the feeling of space, freedom and opportunity. We reject the idea that we should all live on top of each other, as is commonplace in so many countries across the world''.

Well, it's also commonplace in Docklands, Southbank and Melbourne's central business district, as well as inner Sydney. Developers can't keep up with demand for housing just like that. If you want to allow more Australians to live near the centre of their cities, we will have to build far more of it.

The alternative is for cities to keep sprawling outwards, increasing the congestion the PM says she wants to reduce. Populism can't solve the problems of urban policy. It's about standing still, when we need to be ''moving forward''.

Gillard announced two policy developments. First, three panels of eminent Australians will consider sustainable population growth from the perspective of the needs of communities, the economy and the environment. So far, so good. But they will report after the election - so Labor's policy will be decided after the election.

Second, the Government will redirect $200 million from existing housing programs for 15 regional cities to build infrastructure that could fast-track up to 15,000 affordable homes. Which cities? That too will be decided after the election.

At first sight, the program's goals look similar to those of the Housing Affordability Fund that was part of Kevin Rudd's policy at the 2007 election. So far the program has not met its targets, and maybe this is a sensible way of retargeting it, by offering more money to get councils to commit to bolder schemes. If so, then at least it's moving sideways.

Read more >>

Catch and skill our own

ONE of the fears you hear in the debate over asylum seekers is that Australia is being flooded by refugees. Well, fear not. Australia is being flooded by new arrivals but they're not refugees.

The people flooding into Australia are primarily foreign workers, being recruited here to fill skills shortages. Why? Because it's cheaper to bring in foreign workers who already have skills than to train our own.

Last year 508,000 people arrived to live in Australia as permanent residents, temporary workers or students. Just over 13,000 of them were refugees, or about one in 40. Even if all the asylum seekers arriving by boat were counted, the 2726 of them would make up about one in 200 of the arrivals.

There is a bigger issue here. In my view, it's also a simpler issue than what to do about asylum seekers (which, frankly, I think is one of the most difficult policy issues I've ever come across, with every option breaking one or other principle of good government).

That issue is Australia's policy of relying on importing foreign workers to provide us with the skills we need, rather than doing all it can to ensure that Australians are trained in the skills we need.

It has a parallel with our reliance on foreign capital. Australia is one of the richest countries in the Western world, yet one of the poorest savers. Despite our wealth, every year we are in the bottom half of the OECD in savings rates. That's why our net foreign debt is now $654 billion, and doubling every eight years. As the International Monetary Fund and many others have pointed out, our reliance on foreign borrowing is a risk to our economic future. But our reliance on foreign skilled workers is a risk to something even more important: our social fabric, and our sense of national unity.

For while Australia is importing hundreds of thousands of workers every year, Governments, both Liberal and Labor, have remained silent on the insidious slow growth of men dropping out of the workforce in the prime of their lives.

In the 1960s, the last decade in which we had full employment which, while some economists seem to have forgotten, means that more or less everyone who wants to work can find a job only 2 per cent of men aged between 25 and 54 were outside the workforce. Roughly speaking, 96 per cent of prime age men had a job, 2 per cent were unemployed, and 2 per cent were either unemployable or doing something else.

But in the 1960s, jobs were simple and wages were low. Married women were mostly tied to the home, so men faced less competition for jobs. Heroin was rare, expectations of life were simpler, and fewer people needed psychologists.

Fast forward to 2009. Bureau of Statistics figures show that last year almost 10 per cent of men in the prime of their working lives aged 25 to 54 were not even looking for work. Only 4 per cent were unemployed, but 14 per cent of those of prime age were not working.

Among women the same age, twice as many were not working: 28 per cent of all women aged 25 to 54. But no one asks the questions that would tell us how many of them were not working because they preferred to be full-time mothers, and how many had dropped out for reasons similar to the men. It seems safe to assume that the problem of people outside the workforce is as widespread among women as among men.

You think these are global problems? Yes, but a report released by the OECD last week suggests Australia has been handling them worse than other Western countries.

The OECD's Employment Outlook reports that in 2009, 21 per cent of Australians in that prime working age group were unemployed or outside the labour force. Of the 27 OECD countries the IMF terms "advanced" that is, part of the rich world Australia ranked 20th on that key indicator. Switzerland was top, with only 13 per cent of its prime working age people not in jobs.

Broadly speaking, over the past 10 years, employment rates have risen for older workers, but fallen for men of prime working age. But do you ever hear any minister talk about it? The Treasury? The Reserve Bank? The Productivity Commission? Why is no one in government asking why so many people in the prime of their working life are dropping out of the workforce and what we should do about it?

But that's not the only weakness in Australia's labour market. The OECD says that while Australia's unemployment rate last year was the eighth lowest among its 30 members (not the lowest, as ministers sometimes claim), "overall slack in the labour market is actually higher than the OECD average".

The reason is not only the millions of people not in the workforce, but also the more than 800,000 people the bureau classifies as underemployed part-time workers who want more work, usually full-time work.

"Even before the current downturn, Australia had amongst the highest rates of involuntary part-time employment in the OECD", the report points out. "More than 60 per cent of involuntary part-time workers have no post-school qualifications, and one-third of them are aged under 25."

These are young people falling through the cracks, without the skills to hold down a good job, and many may lack the desire or self-discipline to get them. These are the kids most at risk of joining those who have dropped out of the workforce.

Shouldn't this be the kind of issue our political leaders talk to us about? Shouldn't this be an issue they tackle?

Read more >>

REALITY CHECK: Few boat arrivals sent home, but most cases unresolved

ONLY 6 per cent of recent boat arrivals whose cases have been finalised have been rejected and sent home, official figures reveal.

But the Department of Immigration and Citizenship figures show few arrivals so far this year have had their cases resolved.

Almost 1000 Afghans and Sri Lankans arriving in the past three months have not been processed at all, under a government-imposed freeze. More than 3700 others still wait. Many have been told their applications have been rejected.

The figures depict a system pushed beyond limits. Officials struggle to cope with the number of arrivals — and the government struggles to cope with community hostility to them. Let's look at the facts and figures.

How many asylum seekers have arrived here?

So far this year 75 boats have reached our waters, carrying 3532 asylum seekers. That is already more than for the whole of last year, when 60 boats arrived, with 2726 passengers. Roughly three boats arrive each week, carrying 133 asylum seekers. Those rates have been steady in recent weeks.

Where are they being housed?

At last count, 2571 "irregular maritime arrivals" were being held on an over-capacity Christmas Island, and 1503 asylum seekers and 151 boat crew on the mainland, mostly in Darwin and the north-west.

How many have been granted asylum?

Of 6258 asylum seekers intercepted at sea since the start of last year, only 39 per cent have had their cases finalised. Some 3724 people still await a final decision. Of the 2534 whose cases have been finalised, 2382, or 94 per cent, have been accepted as genuine refugees and granted visas; 152 have been rejected and sent home.

That is similar to the outcomes under the Howard government. Most asylum seekers sent to Pacific islands ended up being accepted as refugees into Australia. So far, just two Afghans have been sent home, while 1622 have been granted refugee status. All 169 Iraqis whose cases are finalised were accepted.

Most of those sent home have been Tamils from Sri Lanka. But even in their community, 79 per cent of applicants were successful — before the government froze processing on April 9.

Are we overrun by queue jumpers?

Hardly. Last year 508,000 permanent and temporary migrants arrived. Asylum seekers made up 0.5 per cent of arrivals. This year it is about 1.5 per cent. The risk comes if that keeps growing.


WHO COMES, WHAT HAPPENS
BOAT ARRIVALS, REFUGEE STATUS

GRANTED SENT HOME (PENDING)

Afghans 3558 1622 2 (1934)
Sri Lankans 1129 324 85 (720)
Iraqis 495 169 0 (326)
Others 1076 267 65 (744)

Total 6258 2382 152 (3724)

DEPARTMENT OF IMMIGRATION

Read more >>

Gillard's big talk more a case of shift in emphasis

IS JULIA Gillard's first policy statement as Prime Minister a real policy shift? Or is she pushing on a door that was already closing?

We all remember the headlines last October when Kevin Rudd endorsed Treasury's projection that Australia would have 35 million people by 2050. "I actually believe in a big Australia," the then prime minister said. "I make no apology for that."

But as polls showed the vast majority of Australians disagreed with him, Rudd retreated.

In April, he appointed Tony Burke as Minister for Population, to produce a population strategy to "balance" the need for more people with their impact on infrastructure and communities.

"Many Australians have legitimate concerns about the sustainability of population levels," the old prime minister said, citing the impact of growth on urban congestion, infrastructure, housing, government services, water and agriculture.

Yesterday the new Prime Minister said much the same, with a different emphasis. She rejected a "big Australia", said sustainability was the prime goal and added a concern that skilled migration should not substitute for skilling young Australians.

But population policy here is largely immigration policy. And whatever the rhetoric, Immigration Minister Chris Evans has been busy making policy shifts to slow immigration.

Evans has cut the official migration intake by 21,500. He has reduced the number of people here on section 457 temporary work visas by 12,500.

He has halved the number of skilled occupations that qualify for entry, toughened a range of rules, and closed the back door by which foreign students in lower-level courses could claim permanent residency.

The bottom line, he reported last month, was that net overseas migration this financial year is set to fall to about 240,000, down 20 per cent from a peak 306,000 in the year to March 2009.

If the door was not closing under the old government, the doorway was narrowing. Gillard's words do not set a new policy direction, but aim to reassure Australians worried by high immigration that she understands and shares their views.

But let's not lose sight of the real issue. As Committee for Melbourne chief executive officer Andrew MacLeod points out, Australia's population will keep growing. We need to plan for that, and build the infrastructure it will need.

Cities far bigger than Melbourne work very well if they build a good metro system, and go up as well as out. Good infrastructure and good planning make big cities work.

Read more >>

Fiscal time bomb yet to explode

PAUL Krugman has a Nobel Prize in economics, and we don't. He is also a columnist with The New York Times, where he writes with insight, deep knowledge, and the courage of his convictions. But he's not infallible. Martin Wolf is chief economics commentator for London's Financial Times, and the most respected of all our tribe worldwide. His columns are rich in detailed grasp of the facts, and in wisdom to judge what weight to give them. But he too is not infallible.

It is because Krugman and Wolf have earned such respect and trust that their crusades, if misdirected, become very dangerous. In my view, that is happening now.

Both disagree sharply with the change in economic tack by Western policymakers in the wake of the Greek fiscal crisis, the subsequent panic in financial markets, and the Tories' victory in the British election.

Last year's consensus was that governments and central banks should remain focused on fighting the legacy of the global recession, and be wary of withdrawing their fiscal and monetary stimulus too soon.

But this year the world has focused on the flipside of that stimulus: debt.

And the more policymakers have focused on debt, the more alarmed they have become: not only by the debt run up to end the recession, but the accumulated debt that has financed three decades of deficits in the G7 economies.

In the 1930s, Keynes taught us that, rather than governments aiming to run balanced budgets, they should adopt a counter-cyclical role: borrow and spend in bad times, when private sector demand has collapsed, then save and repay the debt in good times, when the economy needs no support.

But outside Australia, the first of these goals has proved far more popular with governments than the second. The United States has run a budget surplus just once in the past 50 years. Japan, France and Italy have not run a surplus in the past 30 years, while Britain has had just five years of surplus amid 25 years of deficits. This year, the International Monetary Fund forecast in April, G7 deficits would range from 11.4 per cent of GDP in Britain and 11 per cent in the US, to 5 per cent in Canada, Italy and Germany.

Most alarmingly, by 2015, when their economies are forecast to be back to normal, they would still be running deficits of 7.3 per cent of GDP in Japan, 6.5 per cent in the US, and 4 to 5 per cent in Britain, France and Italy.

Is this sustainable? Take a look at the table below, which shows the IMF's projections of net debt in 2015. Since the Reagan era began, the net debt of the US has soared from 25 per cent of GDP to 66 per cent, and on current settings, the IMF projects it will reach 86 per cent by 2015, and 107 per cent (roughly Greek levels) by 2020.

Japan and Italy already have net debts above 100 per cent of GDP, and by 2015 the IMF projects debt ratios of 75 to 85 per cent of GDP for Britain, France and Germany.

(And Australia? See how low our debt will be? There is no debt problem here. Our problem is having a Liberal Party so clueless on economics that it doesn't know what our real problems are.)

Worse, those G7 debts were run up in good years. Yet the real fiscal time bomb is yet to go off. The West is now in a demographic "sweet spot": many people of working age, relatively few children and retirees. But over the next 20 years, the baby boomers will retire, shrinking the number of workers who pay taxes, while doubling the number of retirees governments will have to support in healthcare, pensions and aged care.

During the Greek crisis, I recalled one of the Reserve Bank's rules of thumb: decide which risk has the most serious consequences if you get it wrong, then lean against it.

The worst risk to the global financial system is not that of investors losing confidence in the Greek government's ability to pay its debts. It is the risk of investors losing confidence in the US government's ability to pay its debts.

Rubbish, Krugman and Wolf interject. The US has deep, sophisticated financial markets. It borrows only in its own currency, and could meet any crisis by raising taxes. Where did the investors fleeing Europe put their money? In US government bonds. It is, Wolf says, "the world's most credible reserve asset".

I humbly disagree. The only sense in which the US is a credible safe haven is that markets now view it as such. But in their modern classic on asset booms and busts, This Time is Different (Princeton), Carmen Reinhart and Kenneth Rogoff show that markets normally view the build-up of dangerous debt overload as safe until the moment the truth dawns, when suddenly everyone wants out.

As long as Washington has a political culture in which one side will veto any tax rise and is indifferent to debt, no one can guarantee that future US governments will honour their commitments. A recent survey of US investors found 46 per cent thought it likely that Uncle Sam would default within a decade; only 33 per cent thought it unlikely.

If this global financial crisis seemed bad, just wait for the one we'll see when investors no longer trust the US government.

That is the risk we must avoid at all costs.


THE G7, AND A SMALL PROBLEM

Net debt as a percentage of GDP: 1990, 2015

USA 46%, 86%
Japan 13%, 154%
Germany 29%*, 75%
Britain 27%, 84%
France 25%, 95%
Italy 89%, 122%
Canada 44%, 30%
Australia 6%, 4%**

*1991 ** Treasury estimates, 2015-16

SOURCE: INTERNATIONAL MONETARY FUND

Read more >>

Bravo, Australia, we must be a miracle economy

YESTERDAY'S national accounts tell us that Australia's output grew by 2.7 per cent in the year to March. Yet they also tell us that output per head grew just 0.7 per cent.

That's the true bottom line of this patchy, incomplete recovery, swollen by population growth at a 40-year high and that big government stimulus.

On these figures, all the growth in the March quarter came from government investment; on those schools, halls and gyms.

In the past year virtually all our growth came from the public sector, with the private sector flat. On the trend figures, which are less bumpy and more reliable, consumer spending is growing in line with the economy. Housing is recovering slowly and business is buying a bit more equipment but doing less building.

In the past year, domestic demand grew by a robust 4.3 per cent. Yet private sector spending grew just 2.3 per cent, whereas public sector spending shot up 11.1 per cent.

We all wish it had been money better spent. The Rudd government and its public service chiefs should do some serious self-criticism on why it wasn't and write down the lessons, so that next time we need to spend ourselves out of trouble, we do it without sacrificing value for money.

Even so, when the crisis was on, that stimulus kept the vulnerable retail and construction sectors going. Look how weak private sector demand is even now: how much trouble would we have been in without the stimulus?

One last thing. These figures fail to tell a credible story of what happened in 2008-09. They average GDP figures from three data sets: two of them say we went into recession, the third says domestic spending went into recession. Yet our exports boomed while imports crashed.

So we avoided recession by selling more in a world buying 20 per cent less? We must be a miracle economy.

Read more >>

Indians the new Italians in migration

AUSTRALIA has more Indians than Italians. The Indian community in this country has doubled in just six years, becoming our fastest-growing minority, new figures show.

The immigration department estimates in 2007-08 the stock of migrants from India grew more than any other country, even Britain or New Zealand.

It estimates that the Indian-born population has risen from 110,563 in mid-2002 to 239,295 in mid-2008, overtaking the Italians to become our fourth-biggest migrant community.

In 2007-08 alone, the number of Indian-born people living in Australia grew by 39,529. Some were skilled migrants arriving to take up jobs, and some arrived as students, many hoping to stay on as workers.

China was the second-biggest source, the Chinese-born population growing by 32,563. New Zealand (31,248) dropped to third place, while Britain (17,397) was a distant fourth, as arrivals were offset by the deaths or return of settlers.

The Indian population would have risen faster still in 2008-09, when the number of Indians in temporary residence here grew by 40,000 or 40 per cent. But that would have been its peak, with the department estimating that total net migration in 2009-10 would be down by more than 50,000.

In 2008-09, for the seventh year in a row, India was the biggest source of permanent settlers in Victoria. The figures show a net growth of 9004 permanent residents from India, 8034 from China, 5023 from Britain, 4472 from New Zealand and 2569 from Sri Lanka.

The British are still the biggest migrant community, with 1.166 million forming almost 6 per cent of our population. New Zealanders (494,579) were the second-biggest group in mid-2008. The Italian-born population shrank by 3427, mainly due to the deaths of postwar migrants. Italian immigration dried up in the early 1970s, but the 2006 census found 852,000 Australians claim Italian ancestry. Other communities shrinking include the Greeks (down 2835), Lebanese, Poles, Serbs, Dutch, Maltese, Croatians, Hungarians and Cypriots.


NEW GROWTH IN MIGRANT COMMUNITIES 2007-8

GROWTH POPULATION

1 India 39,529 239,295

2 China* 32,563 313,572

3 NZ 31,248 494,579

4 UK 17,397 1,166,515

5 Philippines 10,784 155,124

6 South Africa 9918 136,201

7 South Korea 9118 78,260

8 Malaysia 6684 120,053


...AND THE COMMUNITIES SHRINKING

Italy -3427 221,721

Greece -2835 130,501

Lebanon -1679 89,065

* EXCLUDES HONG KONG AND TAIWAN

SOURCE: DEPARTMENT OF IMMIGRATION AND CITIZENSHIP

Read more >>

Taiwanese solution to soaring house prices: don't have kids

IN TAIPEI the other day, a crane drove up to the front of the Parliament building. It lowered a man sitting in a plastic container shaped like a house, and suspended him in the air in a protest against the high price of real estate. Through a microphone, he urged onlookers to rise up against high housing prices, declaring: ''People without homes, slaves to property, stand up!''

It is not only in Australia that young people have seen their dreams of home ownership evaporate as house prices boil. Throughout east Asia, a crisis is building as cashed-up investors who fled the sharemarket in 2008 moved their money into real estate, sending prices soaring.

This matters because housing is not just an asset like shares or bonds. It is where we live. It's natural for investors to prefer the security of bricks and mortar. But as governments throughout the region are discovering, it is also natural for people to want to own a home - and to turn against governments that allow prices to soar out of their reach. In Taiwan, the costs have become particularly serious, as we shall see. Their would-be home buyers - ''snails without shells'' as they call themselves - have reacted by scrapping the other big expense facing young couples: children.

At home, the Rudd government last week reversed its 2008 liberalisation of foreign investment rules on real estate, and set up a unit to ensure the rules are obeyed. It also set up a joint working party with the states to ask why housing prices have soared out of reach. But that will work only if it tackles the single biggest cause: the tax-driven growth of rental investors, whose borrowing has grown 30-fold in 20 years, squeezing out home owners.

China, in the midst of a full-scale housing bubble, has now done so. After real estate sales revenue jumped 75 per cent in a year, its state council last week hit investors with tighter rules. Banks are now forbidden to lend investors more than 50 per cent of the sale price (in Australia, 100 per cent is common). Investors must now pay a premium of at least 10 per cent above the normal interest rate, while first home buyers receive a discount. New loans are banned to investors who already have one property. And there is talk of a tax on rental property ownership.

China's goal is to deflate the housing bubble before it bursts, derailing the world's economic locomotive. Wish them luck.

But Chinese buyers are looking abroad, and so are their neighbours. In a bookshop in Taipei a few days ago, amid all the books and journals in Chinese, I spotted an Australian magazine on the shelves: Australian Property Investor. Clearly, people in Taipei are buying Australian real estate.

But Taiwan itself is the best example of what can go wrong if governments let housing investors and market anarchy push prices out of ordinary people's reach, leaving young snails without shells.

Taiwan has become rich very fast, largely by inching its way into a central role in global IT and communications manufacturing. This year, the International Monetary Fund estimates, its GDP per head will overtake that of its one-time colonial master, Japan. Its economy is almost as big as Australia's, and growing twice as fast. Yet its new wealth shows only fleetingly amid the grimy, cramped apartments built in earlier, poorer times.

Taiwan is in the grip of a housing crisis worse than ours. It is a rich country, but wages and most prices are roughly half the levels here - because the government, like China's, holds down the exchange rate to keep its manufacturing globally competitive.

Yet while wages remain low, apartment prices in Taipei are close to those in Melbourne, particularly for anything modern.

Why can't they build more apartments? Because ownership of those grimy old apartment blocks is fragmented among dozens of occupants and investors. To demolish, even to upgrade, a developer must buy them all out, which is prohibitively expensive in time and money. There are classy new apartments on the urban fringe, on greenfields sites, but too few to meet the demand from occupiers and investors. So prices have soared.

So the snails save hard to buy a shell, and do without other things. That means, above all, they do without children, or with just one child. By 2008, Taiwan's fertility rate was the lowest in the world. Its women bear on average just 1.05 children over their lifetimes. The cost of housing is not the only reason, but analysts say it is the main one.

But not having children creates even bigger costs ahead. Right now, Taiwan has 6.8 people of working age for every retiree. But preschools are already closing for lack of children, and the population is set to shrink dramatically. By 2032, demographers project, Taiwan will have just 2.5 potential workers for every retiree - and by 2056, just 1.4. If nothing changes, Taiwan - like China, Japan and Korea - will slowly become economically unviable.

So far, that hasn't happened here. But if governments keep subsidising investors to outbid first home buyers and low income earners, it will. Snails want shells. Taiwan - and soon, possibly China - are showing us what else can go wrong when the price of shells soars out of the snails' reach.

Read more >>

People our biggest import as Melbourne gets squeezier

MELBOURNE is squeezing up. A record 93,500 more people poured into the city in 2008-09, the biggest population growth any Australian city has seen.

Bureau of Statistics figures have raised dramatically estimates of population growth in Melbourne and regional Victoria, with the city now estimated to have topped 4 million people by July.

Sixty per cent of last year's record growth was on the urban fringe, where 55,586 more people joined those living more than 20 kilometres from the city centre. High housing prices closer in forced buyers to the outskirts.

Wyndham, the municipality that covers Werribee, alone grew by 10,758, or 8 per cent. Fifteen years ago, that was almost as much as the whole of Victoria was growing.

Casey, in the Berwick-Cranbourne area, grew by 8430. The Melton council area, including new suburbs such as Caroline Springs, grew by 7306, and Whittlesea, in the north-east, swelled by 6537.

Pakenham, 57 kilometres from the city and right on Melbourne's official boundary, had population growth of 10 per cent in a year, from 33,710 to 37,081.

By contrast, in the settled suburbs of Melbourne, growth was all over the place.

In central Melbourne, growth actually slowed as developers scrapped plans for apartment towers. But in virtually all suburbs, population grew at its fastest in years as many more people had to fit in somewhere.

Populations grew by more than 2000 in inner-suburban Moreland, Port Phillip and Glen Eira, and in middle-suburban Brimbank, Boroondara and Monash. There was similarly strong growth outside the city's boundaries. Geelong and the Surf Coast soared by almost 4000, Ballarat and Bendigo by more than 2000 each, and towns from Mildura to Colac and Bairnsdale shared in the growth.

Nationally, the figures show the revival of serious growth in Sydney, where the population rose by 85,394 to top 4.5 million. Five years before, Sydney had fallen to fourth in growth behind Perth and Brisbane, its population rising just 23,374 as the young deserted a city where they could not afford a home.

The figures also show that the population centre of Melbourne is moving west, drawn to new suburbs there. In the past three years, the population centre has leapt the Monash Freeway and is now in someone's backyard in York Road, Glen Iris, heading for Malvern.

Premier John Brumby last night defended projections of Victoria's population growth, saying it should be seen in the context of a growing economy.

"Victoria has dealt with such population growth before . . . and emerged a more productive, sustainable and liveable state because of it like when Melbourne's population doubled in the postwar boom," he told a cities conference.

"While long-term projections are notoriously volatile, we can reasonably expect that economic growth will outstrip population growth."

Federal Treasurer Wayne Swan yesterday reiterated his support for population growth. "The answer isn't to stop growing, it's to grow differently", he told a conference in Brisbane.

The National Farmers Federation called for tax breaks to get people to move to country towns.


Inner ring (0-10 km)

1 Melbourne 3580 4.0%

2 Moreland 2861 2.0%

3 Port Phillip 2125 2.3%

TOTAL 16,286 2.0


Middle ring (10-20 km)

4 Brimbank (Sunshine) 4326 2.4%

5 Monash (Glen Waverly) 2901 1.7%

6 Boorondara (Camwell) 2288 1.4%

TOTAL 21,606 1.6%


Outer ring (more than 20 km)

7 Wyndham (Werribee) 10,758 8.1%

8 Casey (Berwick) 8430 3.5%

9 Melton 7306 7.9%

10 Whittlesea (S Morang) 6537 4.7%

11 Hume (Craigieburn) 879 3.0%

12 Cardinia (Pakenham) 4172 6.5%

TOTAL 55,586 3.3%

ALL MELBOURNE 93,478 2.4

Read more >>