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From the Sydney Morning Hearld Wednesday 18th March 2009 Top of Form Immigration cutback is pure spin From the SMH 8th March 2009 Michael Pascoe March 18, 2009 - 11:48AM Congratulations Immigration Minister Chris Evans for the best spin since Shane Warne was at his peak, but I suspect the Minister himself might be surprised at how easy it's been to befuddle most of Australia's media - they make Mike Gatting look like Don Bradman. The "leaking'' of the "14% cut" in skilled migration on Sunday worked a treat, capturing all the headlines on Monday and getting a second run with the official announcement that night on the box and in Tuesday's fishwrappers. Oh, wasn't it lapped up, especially by the tabloids - just that little touch of xenophobic nationalism about it that so appeals. And nearly all of it, as Chris Evans well knows, was misleading nonsense, just throwing the CFMEU a bone to protect a few construction and building tradies, being seen to be doing something about rising unemployment, while actually having no meaningful impact on this year's record migration surge. Yes, Mr Evans did announce a reduction of 18,500 in the skilled permanent migrant category, "slashing'' the intake by nearly 14% to 115,000. The Minister might not have mentioned that that still means a 12% increase on the previous year's skilled permanent migrant intake - and that it represents a bare 5% impact on total migration this year, that's running close to 350,000 people. Maybe make that 332,000 now - still a record high. The industry and union commentary response - industry complaining about it, unions saying it wasn't enough - was all totally in tune with the Government's intention of being perceived to be active in the hitherto missing policy area while not really rocking the boat or reducing the demand created by new migrants. Uncomfortable truths There are several uncomfortable truths about the mix of labour and migration policies in this recession, starting with the reality that the labour market is weakening from an incredibly strong base - a period of boom and bubble, effectively full employment that we suddenly thought of as normal. If you accept that the Australia of 4% unemployment effectively enjoyed "full'' employment - nearly anyone really wanting a job could get one, notwithstanding some regional and individual employability issues - then our current 5.2% nominal unemployment rate really means 1.2%. There were already doubts in the first half of last year about the sustainability of sub-5% unemployment if inflation was to be contained. And while the latest jump in the unemployment rate captured the headlines, much less coverage was given to the fact that total employment managed to remain flat. Admittedly that was thanks to a surge in part-time employment making up for the fall in full-time jobs, but in harder times, a job is a job. Even when unemployment reaches the 7% forecast by the Federal Government and our major banks, it won't be much above the level that existed before Australia's last recession. And as Minister Evans admitted, there are still plenty of areas where Australia is very sadly lacking in skills and must continue to import the end products of other nations' investment in education and training. Yes, some people are losing jobs and more people will, but in any historical context, we're a long way from being in the national employment crisis the pollies and headlines often suggest. Rudd's trap The Rudd Government has caught itself in a little trap by convincing the electorate before the last election that working families were doing it tough, when they were really enjoying the very best of times and had never had it so good. From such lofty heights, any fall can seem steep. And then there's the once-over-lightly immigration figures. As previously reported, our real immigration numbers are running much, much higher than the official immigration program generally reported. Last May's budget boosted the "official'' program places by 20% to 190,300 - just to put this week's reduction of 18,500 in perspective - but there are another 160,000 or so not officially referred to as migrants. Kiwis, 457 visas and a few other odds and sods aren't part of that official migration policy. Kiwi refugees With the NZ economy doing considerably worse than ours, it's not unreasonable to expect the number of dipthong stranglers from across the ditch will at least be maintained, some of them economic refugees, maybe finding work here in the construction industry, helping build all those looming primary school halls and libraries. Last financial year, some 34,491 New Zealand citizens settled. There were a further 1428 people in an unspecified "other non-program'' category. And then there are the sub-section 457 guest workers who are the first to feel the chilly winds of labour protectionism. It seems that 457 visas are down by about 20% in January and February, but that still means about 100,000 people this year. I'd argue that the way 457s are holding up is a much better indicator of the real strength of the Australian labour market and our skills shortages and mismatches than what comes out of the ABS labour surveys. There are more challenges ahead for Chris Evans, starting with May's budget, when the protectionist forces will want another bone. I wonder if it has another flipper in his bag of tricks. Michael Pascoe is a BusinessDay contributing editor