The Australian economy and its effect on migration policy

[Guest Mach]

Hey guys,

 

Don't know if you've all been following the financial world extra keenly after September 23, but it seems that the Australian economy has not only turned the corner, but is starting to move up through the gears.

 

For example:

- Unemployment is peaking earlier and lower than expected at 6.75% in Q2, 2010 (a 8.5% peak forecast for June 2011)

- The economy grew at 1% last year when most other countries struggled and is forecast to grow at 1.5% (-0.5%) next year

- GDP is also set to grow faster than expected at 1.75% (0.5%) in 2009 and 3.25% (2.25%) in 2010.

 

I realise we are not out of the woods yet. And I'd be a fool to suggest this will have an overnight effect on migration policy and lead to the Government re-evaluating September's bout of knee-jerkism. But at least Mr. Evans will soon have to look elsewhere for his first best excuse for messing us all around.

 

Sources:

2nd UPDATE: Australian Govt Ups Economy View; Deficit To Stay - WSJ.com

RBA Says Australian GDP to Grow Faster, Rates to Rise (Update4) - Bloomberg.com

[connaust]

I still have concerns that macro numbers are focussed on by media and politicians, but the real economy is ignored. We all know about under employment plus definitions of unemployment etc., and also how population data can be distorted....

 

Issue remains related to economy, migration and skills, is how to more accurately target skills shortages, plus where and when?

 

Ideally new policies should be about keeping people away from capital cities...... where most Australians prefer to bunker down but creates imbalances in property prices, job opportunities etc. ..... to encouraging more regional (development).

 

Finally, the "Elephant in the Room", Australia has the highest debt to household income in the world, high net foreign debt, and decades of persistent current account deficits ..... when is all this debt (built up since 70s) going to start decreasing... would need the economy to slow?

[Guest Mach]

Hey Connaust,

 

Another economist, cool!

 

Agree with all your points. Never did an economy need a recession to clear the decks more than Australia. No doubt "the catastrophe that was 'skillfully' avoided" will be a blunt instrument that Rudd and Swan will use to beat the Liberals over their heads with come November, 2010.

 

Regarding the way forward, I agree that more movement has to take place outside of Sydney, Melbourne and Brisbane. And without wanting to regurgitate my ire at the way WA and SA have been affected by the federalisation of States' rights to sponsor applicants, I'd say that the new system of checks and balances regarding SS will be very interesting reading indeed. However, the fact they mismanaged the SIR pathway long before they stuffed up GSM in 2009 does not bode well for them prioritising regional areas in January.

 

I fear the debt issue is not going to be fixed any time soon, however, as Australian interest rates have traditionally been one of the most volatile of all the G20 economies. Look at the historical data below and there's no wonder that household debt is something like 160%+ of disposible income in Australian households. Indeed, Australia sees them as the best way to fight inflation so I doubt we've seen the last of periods of extremely high interest compared to Europe.

 

HISTORICAL INTEREST RATES AUSTRALIA

[Guest wanderer]

Mach,

For example:

- Unemployment is peaking earlier and lower than expected at 6.75% in Q2, 2010 (a 8.5% peak forecast for June 2011)

- The economy grew at 1% last year when most other countries struggled and is forecast to grow at 1.5% (-0.5%) next year

- GDP is also set to grow faster than expected at 1.75% (0.5%) in 2009 and 3.25% (2.25%) in 2010.

 

I realise we are not out of the woods yet. And I'd be a fool to suggest this will have an overnight effect on migration policy and lead to the Government re-evaluating September's bout of knee-jerkism. But at least Mr. Evans will soon have to look elsewhere for his first best excuse for messing us all around.

 

 

I'm pleased you did put in I realise we are not out of the woods yet. Matt, because in some ways we've not really entered the woods yet for a couple of reasons.

. The government has splashed around cash hand-outs and funded various other programs all designed to stimulate the economy and sure it has had some desired impact in keeping unemployment from soaring quicker.

From a $20B surplus budget left by the outgoing government, that has all been frittered away to have a deficit of whatever it will be, can't remember what was budgeted for this year, but a significant deficit nd that'll be with us for a long time.

. And then there's the dominoe effect or lag that works for Oz something like:

US/Europe in decline, China's factories slow, Use of resources slow, Australia's economy slows.

 

Both factors have kept us out of the woods and yet we'll likely be bogged in the swamp with Crocs snapping soon enough.

The government is obviously delighted with such figures you've posted but you do need to remember they are forecasts and revisit the scene in 12 -18 months and it could be starting to look horribly different.

 

As Andrew indicates, there are also underlying unhealthy finances too.

[Guest wanderer]

And Mach,

Regarding the way forward, I agree that more movement has to take place outside of Sydney, Melbourne and Brisbane. And without wanting to regurgitate my ire at the way WA and SA have been affected by the federalisation of States' rights to sponsor applicants, I'd say that the new system of checks and balances regarding SS will be very interesting reading indeed. However, the fact they mismanaged the SIR pathway long before they stuffed up GSM in 2009 does not bode well for them prioritising regional areas in January.

 

A lot of people fail to realise that Australia is a bit unique in its population distribution, not that we do not have people who are not attracted to living in more populous centres for whatever reasons, just like other countries, but there are limitations.

 

We have this huge swag of sandy countryside called desert that takes up a huge percentage of the land mass.

And even before you get to the desert there is some very marginal country, a lot offarming practices here which were brought from Europe have been found to be not ideal in many regions and there is a huge reliance on irrigation schemes that are helping to bleed out major rivers dry, not that a lengthy drought has helped either.

 

Even Perth and Adelaide have water issues, as has Melbourne and other Victorian regions, large scale desalination plants in progress in Queensland and also Victoria but they are not the real long term best answer.

 

A high % of population does live coastal for the above reasons and sure it would be great if more larger regional cities were established or existing ones expanded faster but you still need employment for the people and you'll find that employment in regions [other than say a dedicated mining centre] will always be higher than that of higher population capitals and nearby coastal regions.

 

The federalism of states rights to sponsor is a bit of BS for again a look at states nomination lists will show a close following of the SOL and théy are not nominating because of vacancies but it is merely a process they can all offer in an attempt to grow their states whether or not they have jobs available.

 

If in fact WA may have more vacancies in some categories because of a resources project, attracting the unemployed or underemployed from elsewhere is a most practical way of developing decentralisation.

 

Mismanagement of SIR?, and which pathway is that?

[Guest SimonB]

On the lurking dangers to the Aus economy. I have heard some interesting mutterings about property recently.

 

It is evident that the media are propelling the resurgent property boom in Australia (e.g. falsely inflated migrant numbers) as this is in the interests of protecting the baby boomers and their nest eggs. The government are also in cahoots with this as it is the best vote winner Australia has seen post WWII and most Australians wealth is tied up in their homes - if the value of your house goes up you feel like you have more money and you vote the same party back in.

 

However, Labor being more visionary in the political field realise that every bubble does burst and with the rest of the world's property correcting things are getting a bit out of whack in Aus. The importance of property to the economy means that any crash will take out the country and the nature of market forces means this is a real danger.

 

How can property prices be corrected? I have just heard from a source in Canberra that the govt is discussing releasing areas of land in and near the main capitals very cheaply with a view to kick starting the all important building industry. The price of buying land and constructing houses in these new land releases will be a long way south of average home prices of 600k and 520k in Sydney and Melbourne. This in turn will start sending prices down as spanking new homes at a lower price than the existing ones will cause this revaluation.

 

food for thought ...(UB40)

[Guest proud2beaussie]

Labor being more visionary in the political field

:biglaugh::biglaugh:

The only "vision" that politicians of any persuasion ever have is the vision of their bank balance.

Anyone who believes that the changes that have been made to the migration program this year have anything to do with the long term interests of the country as against the short term appeasment of the union movement is seriously blinkered.

The changes were designed to appease the union movement in the face of the credit crunch and rising unemployment-nothing more,nothing less.

[Guest Mucky Waters]

I think it will be a few years till Oz is back on its feet to be honest and Immigration will suffer.

[Guest SimonB]

Nigel you want to look at the history of Australian politics i.e. Keating reforms and Whitlam introducing medicare - both labour governments.

 

Although, I am not partisan and my post was on the property boom not migration.

[Guest proud2beaussie]

Nigel you want to look at the history of Australian politics i.e. Keating reforms and Whitlam introducing medicare - both labour governments.

 

Although, I am not partisan and my post was on the property boom not migration.

The title of the post is The Australian economy and its effect on migration policy.therefore my comment is perfectly on topic.

[Guest SimonB]

Yeh but the previous 3 posts were talking about the economy... I was going with the thread

 

There's only so much whinging that can go on about the state of migration before it gets boring....

[Guest wanderer]

SimonB,

However, Labor being more visionary in the political field realise that every bubble does burst and with the rest of the world's property correcting things are getting a bit out of whack in Aus. The importance of property to the economy means that any crash will take out the country and the nature of market forces means this is a real danger.

 

How can property prices be corrected? I have just heard from a source in Canberra that the govt is discussing releasing areas of land in and near the main capitals very cheaply with a view to kick starting the all important building industry.

Well not that I necessarily agree with Nigel on the Immigration moves being to appease Unions, certainly even Blind Freddie with or without Unions would have had to have the vision on something needing to occur re

in the face of the credit crunch and rising unemployment-nothing more,nothing less.

And doing something is very much related to how the country will be placed getting into next year with elections and yes, all politicians have an eye on their future.

 

Interesting article in Sunday newspaper yesterday which indicated how Kev007 has had the longest political honeymoon on record but some polls may indicate the beginning of a significant drop and that's bloody well long time overdue in my book for the guy I've always referred to as a Song & Dance Krudd of no substance and not that I am a liberal, often voted against them and most recently on election before last re Iraq, but if you examine closely how Rudd operates flitting here, flitting there, announcing this and that in place of ministers doing it, I'm sure Gillard is just waiting her time to jump on him, not literally, but just to dump him and it would seem that Immigration is one policy area he is not prepared to dabble in other than with the Boat people and that's not really immigration per se.

 

But back to the vision Simon, Rudd has as much as if his head was up your horses A and he actually reminds me somewhat of a face that has been sculptured a bit like that, but that is less to the point than that he came out real slimey, slimier than Keating with Pig Farming vision.

 

As for Medicare, long before tweaking and renaming, we had Hospital Benefits in Australia and that may have even been more like the UK NHS for I can never remember paying anything back in the 70s for medical care and in fact families were making money out of having kids.

 

But more importantly, a looming property crash and what that may do for enemployment and subsequently delaying any further increases in immigration, Labors vision will fail them again for Sydney and Melbourne do not need to get any bigger.

A real vision would announce:

1. "Sorry, shouldn't have thought super BB cable roll out is a good thing"

That $45B in funds casn be put to far better use elsewhere, ie.

2. "Australia may have severe future rainfall problems, possibly far worse than currently being experienced and it's beyond time the Gulf Monsoon rains were harvested with all manner of a Snowy style scheme to get water to where it'll be needed and that's in the south"

The states of Queensland, NSW, Victoria and NSW have already been consulted and with the Federal government a preliminary joint planning team has been established and sub groups will be appointed on passing of state/federal legislation to move on the following.

3. In addition to the above, it's going to be stuff the greenies but we're going to build a series of intercoonected dams right down the Eastern seaboard, it having been recognised that we do often get heavy rains but not always where the dams are and so a water grid will be a central management system of water supply, much as the state power grids are interconnected.

New legislation is to be put to up so that will include any Greenies getting in the way of this countries survival will be exiled to a new prison on Bob Browns Bruny Island - sorry Bob we'll have to resume your plot but consolation for you is appointment as National Green Flock Counsellor.

4. The New Dams, New Way Program will incorporate significant decentralisation planning commencement which will see establishment of satellite offices of all federal government departments for a progressive build up of the non public interface personnel and State Governments will be encouraged to do likewise.

5. In doing this, there will be meaningful talks with state governments in respect to merging responsibilities where overlap occurs between Federal and State in order to down size government in total.

6. In keeping with Federal/State mergers, that process will not be done with eastern states alone nor will the NDNW program but the eastern seaboard is recognised as the most populous area of Australia and also where there is most potential for water harvesting and thus initial plans will be more focused on the region.

7. To avoid the development of new communities getting bogged down in multiple layers of government, the Federal/States Initiative is to declare Crown lands involved as exempt from Local Government planning and it is expected where modelling is developed for streamlined town planning, functioning and services that Local Governments may want to follow suit with in their own areas.

 

The ultimate vision for Australia is

. A well watered diversified community that will minimise transport activities that currently clog capital cities of Australia and likewise the massive cities around the planet.

. Our citizens will have a more reliable supply of that fist staple of life - Water and will benefit from living in less polluted surrounds.

. The water channelling from the north and development of regional water storages will allow local produce areas to be established, thus entailing a further reduction of transport needs.

. Regionalisation of our communities will hopefully also allow for younger people to be enticed into agricultural careers to supplement our rapidly ageing farmers.

. Not only may this be a great bonus for all Australians given uncertain life expectancy of the planets oil supplies but there will be obvious impact re less pollution and carbon emissions.

. Fires! and again the danger to Australians is well known; planning of communities will take account of the necessity to develop clear areas and fire breaks about community areas, fire prevention not being the sole benefit but there will also be managed harvesting of timber for building and manufacturing along with cleared areas being used for agricultural purposes with minimal flammability potential.

 

. In all of the above activities, the planning, earthworks, community establishment there is great potential for employment of many and special training sections will be established to integrate our indigenous peoples into all activities and in keeping with what has been acknowledged as a way of life for some indigenous people it is foreseen that some may decide to follow a career path into forests management so that far greater forest floor fuel management activities may prevail.

 

Meanwhile Simon, we have a residential property market in Australia which has average property price to annual earnings ratio at something like twice that of a few other developed countries and that is unsustainable and will with rising interest rates see the bubble pressure rising - our Toxic debt just waiting on an implosion.

Releasing land close to capitals is short term mickey mose stuff and perhaps the Krudd is being shared around up that horses A.

[Guest SimonB]

Yeh but let's keep it real wanderer. We've all heard of rising property but who has heard of this seismic water plan.

 

Are you living in the eagle's nest?

[Guest wanderer]

Yell, well lets not hope it's Simon Says,

Yeh but let's keep it real wanderer. We've all heard of rising property but who has heard of this seismic water plan.

 

Are you living in the eagle's nest?

 

Or at lets least say, land being provided for development in the backwoods of Capitals has been trotted out as a policy idea well before now and first thing that has to be asked - is it necessary? When:

. Splitting 1/4 acre blocks will minimise additional infrastructure costs.

. Getting out of your own nest and having a drive about the capitals outskirts over a few weekends will have you finding heaps of available building options.

. Develop special areas without doing it properly and you'll have new isolated problem suburbs with minimal services - Sydney has plenty already.

. The cost of development with state/local government red tape just adds to exhorbitant costs of what extending services will be.

 

Without looking at the bigger picture from the eagles nest, it is far from vision of any merit whatsoever.

And have you read of Sydney's rising damp?

 

There has been mention of harnessing northern waters for southern flow since probably a century back, at least in regards to some dams for northern Queensland to get a flow back over the divide, something else again.

 

Study up on meterology and see the basis of out wet weather patterns.

. We currently have east coast towns that get regularly flooded and governments never step in and say enough is enough and worse still we've built the towns on rich alluvial river flats, best place for food growing.

. Sure weather patterns are changing but if tropically monsoonial driven rains fail, we'll have huge problems well before then and the earth in deed will be a very differnt place.

. Fly out of your own nest and study [Google Earth ideal] and you might just see that getting a southern flow of northern monsoon waters is not such a big deal in way of technology compared to something like the Snowy, great opportunity for industrial level nature friendly power development too.

. Also look at what the Snowy did for the socio-economic structure of Australia and what is happening 50 years later, manufacturing industry being stuffed by cheap labour countries and no wonder employment will be an issue as we have the visionary Krudd penalising our industry still further as he sings and dances his way across the global stage.

. Talking more on vision, how about water buy backs of water that may even not find its way into the Darling/Murray and then more from Murray region farmers [great for ageing farmers to get a retirement fund I do not begrudge them].

But then Senator veryWrong when asked what the plan is to keep growing suficient food for the nation, says head down we'll be looking at that!, and whether you begrudge that or not, what hopeless vision!

. And then some bright Labour spark says we'll move agriculture north to Queensland and aside from the fact that bright visionaries are probably little aware of what extent is there already and some getting affected occasionally by cyclones, I bet they have little understanding of what can be grown where depending on tropics/temperate climate and do they expect a huge migration north or have some master plan re massive transport and associasted costs if fuel is available.

 

. Meanwhile we have the Great Artesian Basin that has been the source of agricultural water for many decades, only problem being that it may have taken hundreds of centuries and more to get filled and is getting nearer empty.

 

Australia is a young country as far as developed nations go and whilst a lot of European farming practices were easily enough transferred in the NH, the pilgrims heading across the alantic and the US landscape not having such a quantity of arid land, it is widely acknowledged that Australia is something else.

 

Great vision would identify the shortcomings that we have and formulate a plan to improve everybody's lot on basic survival needs of water, food and shelter, the rest of life being trimmings that'll come along in any case.

 

But then the Liberals do not have a monopoly on vision either and do not take too well to being motivated past feathering their own nests as much most politicians and greedy people will.

[Guest SimonB]

Strewth Wanderer (or should I say Neptune) you really like this water idea.

 

Will it do anything to alleviate the housing bubbble? The great water pipeline idea has been going around for centuries (I also used to live in Queensland) but I think it is logistically imposssible. You have spent a lot of time researching this so do you have you any cost indications or exisiting implementation examples on this magnitude?

 

One way ticket, One way ticket.... Boney M

[ottg]

Don't read too much in the economic figures and unemployment figures. The stimulus packages skewed the statistical results. However, with $400b approved projects in the pipeline it will just be a matter of time before you will the biggest boom ever. Be ready, be there and be part of it as quickly as possible

I have just updated our website to reflect market segmentation for WA

See Perth Business Services - Home

Regards

[Guest SimonB]

You obviously believe what you read or hear in the mainstream Australian media.

 

Hey look! There's a bloke over there with a couple of mirrors and a smoke machine..

[Guest wanderer]

Simon,

Will it do anything to alleviate the housing bubbble? The great water pipeline idea has been going around for centuries (I also used to live in Queensland) but I think it is logistically imposssible. You have spent a lot of time researching this so do you have you any cost indications or exisiting implementation examples on this magnitude?

 

Water is life and diversification of harnessing/supply is a basis for decentralisation.

Decentralise and you take the pressure away from Capitals and properly planned, new cities and towns is what will alleviate the housing bubble costs.

 

Why is better management of water sources impossible?, when you look at other infrastructure projects and look at the alternatives - more food imports while that is feasible.

Major dams with extensive pumping/gravitation and pipelines have been developed for capital and regional cities covering hundreds of kilometres in the past and some are still underway.

 

Cost wise, of course I've not individually developed anything, but do you reckon there was ever any real idea of previous major infrastructure costs within Australia or abroad.

In Queensland alone, major capital works currently underway have had cost estimates blown out by just the odd 100% or so

 

And for alternative water supply, look at the billions that are being thrown at desalination plants that aren't working too well.

 

One of the largest ever attempted at Tampa Bay in Florida has only been back to the drawing board about three times and at latest count after about 12 years of construction and re-construction still wasn't commissioned.

California has two put in mothballs by the Governator because of the expense of running them - massivly high energy consumption/costs.

 

The Queensland GC one ain't exactly flying along either, faults developed in commissioning and that still isn't complete as far as I know after 12 months, and if you've ever had anything to do with process plants, you'd know that even that time lying dormant is going to create another set of problems.

 

Meanwhile the Kruddy vision when he can see past his nose is to spend $45B on BB roll out and ask anybody in any street in hobart where his trial is and they'll say WTF Kev!, piss off if you think we'll be paying $200/mth.

 

Don't know what ottg is referring to re $400B but

1. a lot of capital works is always in the pipeline, Federal and State, but will be reduced while we have deficit budgeting.

2. oh so bloody visionary to say every school will have a new library or whatever if they need it or not and what a frivolous waste if they don't, just like giving every kid a laptop BS.

3. Krudd backing some grandiose plan for WA ports that was going to have potential for employing 50,000 indigenous people - 50 have employment doing something or other.

 

As I've said, the punce is a twitter flitter without a clue.

[Guest SimonB]

Strewth Wanderer (or should I say Neptune) you really like this water idea.

 

Will it do anything to alleviate the housing bubbble? The great water pipeline idea has been going around for centuries (I also used to live in Queensland) but I think it is logistically imposssible. You have spent a lot of time researching this so do you have you any cost indications or exisiting implementation examples on this magnitude?

 

One way ticket, One way ticket.... Boney M

 

So you don't have any cost indications or implementation examples of piping water the huge distance south.

 

Water Commission fuelled Qld's 'terrible financial state' - ABC News (Australian Broadcasting Corporation)

 

Desal works (there are some excellent standards and international benchmarks in this technology adopted in Australia) but it is not culturally acceptable by ultra conservative local government.

 

Anyway, back to this property boom that is out of control..

[connaust]

I digress, just wanted to add that there has been one intangible element in the migration policy debate of late in Australia, which has been highlighted in the news by Australian letter writers... old wolves in sheeps clothing, "white Australia" attitudes dressed up as feigning concern for Australia.

 

This has been promoted by various groups and individuals whom, under the guise of concern for environment, unemployment, rising property prices etc. have been highlighting factoids such as alarming rates of population growth, Australia open to anyone in a boat (from Asia), (Asian) students rorting study for PR, etc. etc.

 

Unfortunately, politicians pay too much attention for fear of upsetting a demographic or marginal vote....

[Guest wanderer]

Simon,

So you don't have any cost indications or implementation examples of piping water the huge distance south.

 

Do you think anybody had total cost ideas on:

. The Snowy Hydro Electric Scheme when they thought about it?

. When the Taswegians started on their Hydro Scheme?

. When Victoria commenced development of LV Brown Coal?

Of course they didn't because they were major development projects and if you do not have any experience with even smaller ones, you'll have no concept and may have decided not to read about Qld. government overruns on just about everything, just as happens with all major government projects and even many of private industry, Iron Ore Billets plant in WA being a prime example.

Water Commission fuelled Qld's 'terrible financial state' - ABC News (Australian Broadcasting Corporation)

 

That is a stupid misjointed article describing two different things to do with water:

The Queensland Opposition says expensive water projects in the south-east have failed to deliver and left the State Government struggling financially.

State Parliament has passed new laws changing the structure of the Queensland Water Commission (QWC).

There will be one commissioner instead of three and some responsibilities will be transferred to government departments.

1. The statement about opposition says back in June!, just confirms what I've already told you about overruns

2. Commissioners had more to do with turning sprinklers on and were not in the decidion making train on water infrastructure.

Desal works (there are some excellent standards and international benchmarks in this technology adopted in Australia)

There's plenty of desal plants about the planet that do work if designed and built properly in right places with right materials without attempting to cost cut and maintained to extremely high standards against the marine environment corrosion so as they can be run continuously at extremely high cost.

 

You shut them down for extended periods and your marine environment will do wonders! [you do not want]

but it is not culturally acceptable by ultra conservative local government.

 

A load of frogs for there is a local government in Qld hell bent on building one at a cost approaching $50M for a population of some 1000 people - what a waste a lot of the population say who do not want it but LG have their sights on tourism/expansion like the morons most are.

 

Be interesting to see just when the GC desal plant operates if it ever does and what the costs will be, whether the contractor goes bust or whether the plant goes bang because they have decided not to use it for X years because of good rains.

 

 

Anyway, back to this property boom that is out of control..

And if the extent of your thinking powers is a measure generally being akin to those in power who think a land release is an easy fix, no small wonder Australia will always have issues to deal with,

The huge one being more and more people living sub the standard that had been established post WW2 up to turn of the century as the country drifts backwards.

 

And not because of immigration Andrew

 

 

You can get racists in any society, Europe, Russia, UK, US, Australia, NZ, Fiji, Asia, you name it, but if you want to take letter writers as a measure of what is happening in a country, yep, it sure is a wonderland.

[Guest proud2beaussie]

OK guys,please keep the thread polite,it is not appropriate to make personal remarks simply because you disagree with someones point of view.

Keep it nice or the thread will be locked.