Restricting migration could raise inflation

News - Migration Written by Administrator Monday, 23 August 2010 09:12

Responding to Treasury advice to Population Minister Tony Burke in April that the economy faced "acute" capacity constraints in Queensland and Western Australia in the next two years, Professor Peter McDonald, a leading demographer, alerts that there would be serious consequences from any move by governments to limit migration.

"The . . . danger (of restricting migration) is inflation driven by wage pressure. Labour, particularly construction jobs, will get sucked into the resources sector in Queensland and WA because they pay higher wages," he said.

Population expert Glenn Withers said as well as the economy-wide inflationary danger, there was a risk resource projects could be affected without the necessary skilled workforce to get them up and running.

But Monash University demographer Bob Birrell said it was disingenuous to conflate the mining boom with immigration. "Immigration has nothing to do with the mining boom."

"Almost all migrants have arrived and stayed in the cities and their employment has been around the service sector." He argued the government should develop a specific mining immigration policy.

"The mining industry wants job-ready, just-in-time workers who don't need to be trained. They're asking for enterprise migration, and that makes sense. If you have a short-term boom, it makes sense not to compete for workers with the east coast but to bring them in as short-term temporary workers."