Migration Like Pyramid Scheme: Labor MP

Migration like pyramid scheme: Labor MP

February 10, 2010 – 9:59PM

A federal Labor MP has likened migration to a pyramid scheme.

Using the analogy of a fraudulent business practice, Melbourne backbencher Kelvin Thomson challenged the idea of bringing in more migrants to support Australia's ageing population.

“The more migrants we bring in, the more older people we will have to look after further down the road,” he told the ACT branch of Sustainable Population Australia on Wednesday night.

“If the idea is that we will bring in still more migrants to look after them, this is just a giant pyramid scheme – sooner or later it's going to collapse.

“It's a fraud.”

A greying population would do more to solve the problem of youth unemployment, Mr Thomson argued.

As an ageing workforce created labour shortages, employers would give jobs to 100,000 youths aged between 15 and 24 who dropped out of the labour market last year, he said.

Mr Thomson is critical of the federal government's plan to see Australia's population grow from 22 million to 36 million by 2050.

He instead wants it stabilised at 26 million.

Mr Thomson repeated his call for overseas students to return to their country of origin for at least two years before they can apply for permanent residency in Australia.

He also wants the baby bonus to be scrapped and limits on family tax benefits for a third and subsequent children.


Population Growth and the Democratic Deficit

Address by Kelvin Thomson, MP for Wills, to the Australian Capital Territory Branch of Sustainable Population Australia, Wednesday 10 February 2009

When I spoke in the Parliament in August last year about population I advanced two propositions first that the worlds population needed to be stabilised, and second that Australias population needed to be stabilised. I called for a national debate on the population issue and the need for population reform.

I am pleased that in the six months since then there has been a population debate in this country. It is evident in the up swell in TV, radio and newspaper coverage devoted to this issue. It is evident in the number of e-mails, phone calls and letters my office receives every day about this issue. A number of my parliamentary colleagues have told me they are also being regularly contacted about this issue. It is evident in prominent Australians like Dick Smith raising the issue I understand that at Mark OConnors launch of the Second Edition of his book Overloading Australia, not only Dick Smith but prominent Australians such as John Williamson, Ian Kiernan and Dr Tony Kidman were also present.

It is evident in the government making statements acknowledging the concerns we have been raising that the skilled migration and overseas student programs have got out of control.

I want to thank Sustainable Population Australia for its strong advocacy on this issue. February is Global Population Speak Out Month, and I urge you to keep speaking out. Your efforts have never been more important. I believe we can win this battle.

Global Population Speak Out is a project of the Washington DC based Population Institute, a world class leader in
– promoting world-wide voluntary family planning and reproductive health services
– educating foreign policymakers, administrators, media and the international public about sustainability and population issues, and

– recruiting and training tomorrows population activists to address population issues both at home and abroad.

This month the Population Institute has assembled a formidable array of ecologists, biologists, academics and activists from all around the world to speak out on the need to address and remedy the size and growth of human population both internationally and in the home countries of all the participants.

There are two issues I want to talk about in some detail tonight. The first is the population ageing scare. You all know how it goes Australia is getting older, were going to end up with a massive number of old sickly Australians supported by a small overstretched workforce; were going to have unsustainable expenditure on pensions, health care and aged care. It featured prominently in the recently released Third Intergenerational Report, where the ageing of the population is treated as a looming disaster. It is nothing of the kind. My message to you tonight about population and workforce ageing is simple dont worry, be happy!

Why do I say that? First, because ageing is a sign of success, both individually and collectively. It beats the hell out of the alternative. Those societies which are the oldest are also the richest, healthiest and have the greatest life expectancy. Those societies which are the youngest are also the poorest, sickest, and have the lowest life expectancy.

Secondly, worrying about getting older devalues older people and the significant contributions older people make to our society. Research constantly shows that older people make a great contribution to our society providing child care and acting as mentors and role models. I barrack for Geelong AFL team, my parents barrack for Carlton. Guess who my son barracks for Carlton, because his grandparents got to him in his formative years. Employers who whinge about not having enough workers to choose from forget to mention there has been a massive increase in womens participation in the workforce in the past few decades and that having grandparents to look after the kids is often an important foundation of that. Older people have also been found to make more financial contributions to their children and grandchildren than the other way around; far from being a burden on us, they help out.

The third reason we should be happy about population and workforce ageing is that it will help us solve some of the most deep-rooted and serious problems we have in our society. In the first place, it will solve unemployment. I repeat, it will solve unemployment. The whole ageing workforce scare is based around the idea that the ageing of the workforce will lead to labour shortages. So what will happen then? Employers will give jobs to the 100,000 young Australians aged between 15 and 24 who dropped out of the workforce last year. A lot of people who are on the Disability Support Pension will find there are jobs for them. And our attempts to address aboriginal unemployment will suddenly become a whole lot more successful. And it will also be the case that older people themselves will be more active in the workforce. We are not just ageing; we are ageing healthier as well. Youve heard about 40 as the new 30, well 70 is the new 60. Older people have great experience, and keeping their hand in through part-time, flexible, working arrangements will be good for them and good for the community.

Now I know it will be objected that these prospective workers may not have the skills to take these jobs. But to the extent this is true, it is a national disgrace and should not be tolerated.

Employers will take on employees and give them on the job training, and so they should. They have been trying to get out of putting any effort into training for years, but the rest of the community shouldnt aid and abet this. And Universities and TAFEs should focus on training young Australians, and should be given the funding necessary to do this.

I also know that it will be objected that as unemployment falls wages and salaries will rise, and that this will be inflationary. Now I think wages and salaries will rise, but where I part company with the objectors is that I dont accept that this is a bad thing. Every few weeks someone contacts my office to say, they would like to work, but when they look at the loss in pensions and benefits and family payments and the like, they would be worse off unless they are able to get a higher income than any of the jobs they are presently qualified to do. So luring them back into the workforce will involve more money. It is highly revealing that the Treasury Economic Roundup of December 2000, said in response to the slowdown in the growth of the working age population, business may introduce incentives to retain existing workers, encourage them to increase the number of hours they work or defer their retirement, and to attract additional workers into the workforce. These incentives could take the form of higher real wages or other non-pecuniary benefits such as the opportunity to work from home, part-time hours for those full-time workers considering retirement, or more generous maternity leave arrangements.

So there you have it, folks. This is the catastrophe that awaits us if we dont act to increase the population higher real wages, working from home, part-time options, more generous maternity leave arrangements! What a disaster!

I think that the role of workforce ageing in reducing unemployment is to be welcomed. I think rising incomes is a good thing. I know that there will be economists who think that lower unemployment will be inflationary, and who like to talk about a natural rate of unemployment as if we shouldnt try to achieve full employment.

I think that economists who talk like this do the community and the nation a disservice. And I cannot for the life of me understand why there is agitation about rising incomes, as a consequence of population ageing, when there is no agitation about rising food prices, water bills, land prices, petrol, electricity and just about everything else you can think of, as a consequence of population growth.

A few weeks ago I and lots of my constituents received a much increased gas bill which was explained by the gas company as needed by the requirement to expand the network to meet rising demand.

So price rises caused by population growth are apparently alright, but price rises caused by population ageing are apparently not alright! It is nonsense and no-one should be fooled by it.

Solving unemployment would be a fantastic thing. I draw your attention to a book written in the mid-1970s by E.F. Schumacher, Small is Beautiful Economics as if People Mattered. He makes a powerful case for full employment. He says character is formed primarily by a mans work. He says someone who has no chance of obtaining work is in a desperate position, not only for lacking income but also for lack of the nourishing and enlivening factor of disciplined work. He says that the view of modern economists that it might be more economic to run an economy at less than full employment to ensure greater mobility of labour and stability of wages, is to consider goods as more important than people, and shifts the emphasis from the worker to the product of work.

He is right. We should not accept unemployment as inevitable.

And theres more. Solving unemployment will also take us a long way down the road of solving other critical social ills drugs, crime, and indigenous disadvantage. This week a Geelong AFL footballer did I mention I support Geelong got into difficulties. What did the Club tell him? Get a job. Not rocket science. The role of work in building dignity and social inclusion is very important. Dont worry about falling unemployment, be happy!

The proponents of the ageing population scare use it as justification for our runaway migration- record population growth of 440,000 last year was driven by massive net overseas migration of 285,000. The number of migrants, overseas students and long-term workers was up 15% compared with 2007-08.

There are so many flaws in this argument I sometimes wonder where to start. First, research indicates that migrants age at the rate of one year per annum, the same rate as everyone else, so it is not immediately clear how bringing in more migrants helps.

The more migrants we bring in, the more older people we will have to look after further down the road. If the idea is that we will bring in still more migrants to look after them, this is just a giant Pyramid scheme sooner or later its going to collapse. Its a fraud.

This issue has been studied in some detail in Britain. In 2003 the House of Lords Economics Committee concluded that it is neither appropriate nor feasible to attempt to counter the trend towards a more aged society in the UK through a manipulation of immigration policy.

In 2004 the United Nations World Economic and Social Survey said that incoming migration (to Europe) would have to expand at virtually impossible rates to offset declining support ratios, that is, workers per retiree.

In 2008 the Select Committee on Economic Affairs of the House of Lords concluded that Arguments in favour of high immigration to defuse the pensions time bomb do not stand up to scrutiny as they are based on the unreasonable assumption of a static retirement age as people live longer, and ignore the fact that, in time, immigrants too will grow old and draw pensions.

Migration Watch UK has calculated that keeping the Potential Support Ratio to present levels would require a growing number of migrants rising to 5 million per year later this century. This would increase the UK population to 119 million by 2051 and 303 million by the end of the century and so on to the stratosphere.

In Australia former Prime Minister John Howard admitted that Even if we were to treble or quadruple our immigration rate over the next decade or so, its impact by the middle of this century on the ageing process of the population would be relatively minimal.

Theres no doubt that an ageing population brings with it challenges which need to be attended to notably in the areas of health and aged care. But the idea that population growth will help us meet these challenges is, in my view, utterly misconceived.

Meeting the needs of a growing population absorbs and saps our political energy. It requires a lot of money money for transport infrastructure, money for new electricity and energy infrastructure, money for water infrastructure like desalination plants. And building these things requires effort effort from the private sector, effort from public servants, effort from politicians. There are decisions to be made, conflicts to be resolved.