Beware the shifting winds in Australia

Tom Switzer

23 November 2018 | The Sydney Morning Herald

When prime ministers leave office, they usually write their autobiographies – or, in Kevin Rudd’s case, two volumes of memoirs. Stephen Harper, Canada’s prime minister from early 2006 to late 2015, is different. Instead of penning a self-serving account of his decade-long tenure, spinning history and settling scores with rivals or the press, he has written an important book on politics and leadership in the age of disruption.

In Right Here, Right Now, Harper makes it clear he is no Donald Trump fan. Trump is, after all, a rude and crude buffoon. But far from being an accident of history, the US President reflects trends in other Western democracies, especially across Europe.

A surge in support for various nationalist movements underscores the growing resentment of a governing class many voters feel has turned a deaf ear to their legitimate grievances. These movements, Harper observes, represent a cry for help from ordinary people who have been disoriented by globalisation and mass immigration.

Trump, for all his self-evident flaws, dared to state in public what many people feel: that economic globalisation, despite lifting so many people out of poverty across the globe, hurts low-wage, manufacturing workers in lost jobs and stagnant wages; and that uncontrolled immigration makes ordinary people feel their national identity is being undermined and that identity politics seems only to intensify intolerance.

When the media and intellectual elites worked themselves in a lather – remember Hillary Clinton’s denunciation of those “deplorables”? – the result was the Trump backlash.

Harper was in Australia this week and he told my ABC Radio National show that the populist trend would not stop until the issues driving it were effectively addressed. If conservatives don’t adapt, left-wing radicals – Jeremy Corbyn, Bernie Sanders, et al – might ride populism’s next wave. The old Reagan-Thatcher conservative style of governing – small government, free markets, free trade – no longer resonates with the losers of globalisation at a time of rising trade protectionist and anti-immigration sentiments.

Harper’s thesis is plausible in the US and parts of Europe that have experienced massive social dislocation in recent years. However, I’m not sure his thesis is relevant to Australia.

As The Economist recently highlighted in a cover story, we have experienced 27 years of unbroken GDP growth, surpassing the Netherlands for the gold medal of the longest economic expansion in the modern era. Yes, the China-fuelled commodities boom helped prolong our bull run. But it was a testament to our embrace of the Keating-Costello economic reform agenda that we were able to weather external shocks and keep growing. Just think how the old Australia – the over-regulated, overprotected and inflation-prone Australia – would have coped with the global financial crisis a decade ago.

At the same time, we have implemented a liberal, large-scale and non-discriminatory immigration policy that, until recently, commanded broad bipartisan and public support. We are one of the world’s most vibrant and tolerant multiracial and multiethnic societies. With nearly 30 per cent of our population born overseas, Australia has been an immigration leader among other major developed countries. When it comes refugee resettlement, Australia is one of the most generous nations in the world on a per capita basis.

As a result, Australia has not succumbed to the kind of nativist or populist insurgency movements that threaten political establishments and public-policy discourse in America and Europe. Nor have we witnessed the backlash against free trade and capitalism that has been evident elsewhere.

But the political climate on immigration is changing. And any politician with a wet finger to the wind will catch the significance of the new mood. The classical liberal think tank I head, the Centre for Independent Studies, recently commissioned polling to assess whether we are in danger of the kind of social and geographic-based conflict over immigration that has occurred across the West. We asked a series of immigration-related questions to voters living in the nation’s top 10 per cent and bottom 10 per cent of metropolitan postcodes based on income and education.

In both rich and poor suburbs, there was strong majority support for reducing immigration until infrastructure catches up with demand. Sixty-five per cent of residents in the top postcodes and 77 per cent in the bottom group support cutting or pausing immigration until key infrastructure catches up with demand.

However, drastically slashing the annual migrant intake carries costs. Remember high immigration has driven such rapid growth in the population that annual population growth has completely overwhelmed the ordinary business cycle during our record bull run. As Salvatore Babones, writing in Forbes magazine, has pointed out: “Since 1990, Australia’s economy has powered ahead with a 3 per cent rate of compound economic growth. Take out population growth of 1.4 per cent, and the economy has only grown around 1.6 per cent per year in per capita terms.”

The public desire to cut the annual migrant intake is driven by understandable concerns, such as congestion and infrastructure in our big cities. But we should also recognise the economic consequences of slashing immigration.

Tom Switzer is executive director of the Centre for Independent Studies and a presenter on ABC’s Radio National.

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