On March 16, federal immigration minister Chris Evans announced that the Rudd government would cut the skilled migration intake for the current financial year by 18,500. This, claimed Evans in a ministerial statement, would "protect local jobs".
"Clearly, the economic circumstances in Australia have changed as a result of the global financial crisis so it is prudent to reduce this year's migration intake accordingly", said Evans.
He also promised to "continue to monitor the migration intake" in the coming financial year, hinting that further cuts would be made in the budget, due in May.
It's ironic, but Labor's resort to the populist and racist politics favoured by the Howard government, which cut immigration numbers in the mid-1990s, has coincided with the return of racist Pauline Hanson to the public spotlight with her ill-favoured tilt at a seat in Queensland's parliament.
Just like Hanson's racist moves to make migrants and Aborigines scapegoats, the Rudd government's cut to the migration quota is far more about pandering to prejudice than it is about solving unemployment.
Migrants don't take jobs
Studies have shown that migration does noT take jobs that would otherwise be filled by "Australian" workers. Rather, by adding to economic activity (buying food, housing, transport and so on) migrants raise economic demand, stimulate the economy and therefore increase jobs.
Access Economics chief economist Craig James told ABC radio's PM on March 16 that migration created "significant multiplier effects right the way across the economy … If you don't have those people coming then you have less demand for houses, you have less spending in the community and it … provides a restriction on growth in terms of the economy."
The Reserve Bank of Australia, in its September 2007 Bulletin, also said that migration increases jobs growth. "Migrant arrivals … have been making a relatively large contribution to total employment growth in recent years", the report says.
"Between 2001 and 2006, new immigrants accounted for about 30 per cent of employment growth, compared with an average of around 25 per cent over the previous 20 years."
By cutting migrant numbers the government risks cutting economic demand and further deepening the downturn.
Shane Oliver, chief economist for AMP Capital Investors told PM that a "typical" recession cut of about 70,000 in the migration intake would cut demand for housing by 20,000 over the next 12 months. "So there'd be a reduction in underlying demand for housing … and demand for housing construction activity", he said.
"So a big negative on that front and that could grow over time depending on the scale of the cut back in immigration that we ultimately see. Also more generally there would be a flow on effect to consumer spending."
Higher unemployment a myth
It's also a myth that migrants suffer far higher unemployment than other workers over the longer term. The RBA Bulletin said: "The unemployment rate of immigrants tends to decrease the longer they stay in Australia."
"By the time a cohort has been in Australia for three to four years, their unemployment rate falls to levels close to the national unemployment rate."
In its annual report for 2006-07, the federal department of immigration found the unemployment rate among migrants in regional areas was far lower than the average.
"Skilled migrants settling in regional or low population growth areas of Australia are achieving excellent employment outcomes; 18 months after arrival they have a participation rate of 97% and an unemployment rate of less than 1%", the report said.
The government's own immigration department, the Reserve Bank of Australia and many economists agree that cutting immigration numbers will not cut unemployment. It may, in fact, prolong the economic crisis and keep unemployment higher for longer, as demand for goods and services continues to stagnate.
So why is the government cutting immigration? The answer is political.
"We don't want people coming in who are going to compete with Australians for limited jobs", Evans told ABC radio's AM program on March 16. Despite the clutch of academic studies and reports to the contrary, many continue to believe that migrants take jobs and cutting migrant numbers will cut unemployment.
A March 2005 poll, held during a time of relative economic boom, conducted by the Sydney Morning Herald, found deep divisions on the issue of migration.
At that time the Howard government was considering increasing the skilled migrant intake. Only 45% of Labor voters supported the rise, while 49% opposed it.
In response to economic downturn, the clamour to cut immigration as an apparent quick fix to unemployment is growing louder — particularly from the labour movement.
Australian Council of Trade Unions president Sharan Burrow and Construction Forestry Mining Energy Union (CFMEU) national secretary John Sutton have publicly backed the government's migration cut.
CFMEU construction division national secretary Dave Noonan has also called for a "pause" in the 457 visa scheme, under which workers are given temporary sponsored employment by a particular boss. If the workers are sacked for any reason, they have only 28 days to find an alternative employer or are deported.
The 457 visa scheme has been a wedge driven into the labour movement. Temporary workers have few rights and are often paid lower than award rates.
Noonan told ABC Radio on March 16: "Some employers are actually laying off local workers and keeping 457 workers because they have been able to get away with paying them less money. And because those workers are in a very precarious position in terms of their ability to speak up about bad treatment in the workplace."
The alternative to seeing temporary workers as competition is solidarity. Progressive unions, such as the Western Australian branch of the Maritime Union of Australia (WA MUA) have rejected the divisiveness of the 457 scheme entirely.
Ian Bray, assistant state secretary of the WA MUA, told Green Left Weekly on March 18 that the union supported the complete abolition of the 457 visa scheme.
The WA MUA's policy is that all workers entering Australia should be given the full rights of Australian citizens, to stop the development of a less-secure layer of workers whose position allows them to be used to undercut the wages and conditions of others, Bray said.
"Everyone should come in under the same terms and have the same rights afforded to all citizens", Bray told GLW. "The economic downturn doesn't mean that anyone should forfeit their rights."
The Rudd government is appealing to nationalism by slashing the migrant intake.
Nationalism, which identifies the interests of workers in Australia with the fortunes of "Australian" bosses, is firmly entrenched in the Australian labour movement. By cutting the migrant intake, the government can pose as a protector of "Australian" jobs without creating any extra employment.
Nationalism is a dead-end for workers. "Australian" companies such as Pacific Brands and BHP Billiton are just as happy to sack workers — in Australia or elsewhere — as non-Australian companies, when their profits fall.
The alternative is to build solidarity among working people wherever they come from — to organise and unionise all workers and act to prevent the bosses creating divisions and pitting one section (temporary workers, migrants) against another.