Migrant Intake Cut Flagged

Migrant intake cut flagged

Paul Maley and Verity Edwards
The Australian
October 10, 2008

KEVIN Rudd has raised the possibility of slashing Australia's record high intake of migrants should the global financial crisis plunge the economy into a sustained downturn.

The Prime Minister said Australia's overall migrant intake, which is set annually in the lead-up to the May budget, would be determined according to the financial conditions that prevailed at the time.

“It's been this way since time immemorial and will be this way into the future as well,” Mr Rudd said yesterday, when asked if it was time to think about cutting the migration rate.

“We adjust it according to economic circumstances.”

He made the comments after the latest official figures showed a rise in Australia's jobless rate last month – up from 4.1 per cent to 4.3 per cent in seasonally adjusted terms.

Unemployment increased by 21,700 last month, outstripping the 2200 new jobs created.

In May, the Rudd Government added 31,000 skilled migrants to this year's migration program.

Australia's overall migration program will now be 190,300 for this year, and 133,500 of those places will be allocated for permanent skilled migrants.

Mr Rudd's position found widespread support yesterday among unions, the Opposition and business groups.

ACTU president Sharan Burrow said there was at present no case for adjusting the migrant numbers, but this could change.

“You would want to be convinced that immigration was not adding to employment growth and that it wasn't in fact necessary to fill medium- to long-term skills vacancies,” Ms Burrow told The Australian.

The Australian Chamber of Commerce and Industry's Greg Evans said Australia should look at reducing numbers if unemployment were to rise and the economy slow.

“We would agree there needs to be flexibility in the overall migration program and that needs to reflect primarily the economic situation,” Mr Evans said.

CommSec equities economist Savanth Sebastian said migration could contribute to a weakening of the job market. “Not only will labour supply rise with new migration but demand is likely to weaken following the global slowdown,” he said.

Full-time workers took the brunt of the rise in the jobless rate last month, losing 15,400 jobs.

The IMF's World Economic Outlook, released yesterday, tipped unemployment to hit 4.8per cent next year.

The forecast is in line with the Australian Government's estimate of 4.75 per cent by June.

Employment Minister Julia Gillard said the unemployment rate was still low: “In the context of the global difficulties Australia is facing, these are welcome figures.”