An article by Gregory Hywood argues that the immigration process needs to be de-regulated as Australia is just one of many countries that are competing for skilled labour on the world market for skills. One of the pressures on Australian business is the large number of white and gold collar workers that are leaving Australia in record numbers as part of the Australian Diaspora.

Competing For Skills

Australia allows in about one hundred thousand immigrants a year based on skills, family and other criteria. In addition about ten thousand refugees seek asylum each year as well. This is balanced by the Australian Diaspora whereby approximately one hundred and twenty thousand Australians leave our shores permanently or long-term. Hywood argues that the draws in the past - a prosperous economy and golden beaches - are no longer unique when appealing to skilled labour overseas;

There is emerging evidence, however, that in the quest for skilled migrants - those who make crucial and immediate contributions to economic activity - we are operating in an intensely competitive market. Australia's natural attributes may not over coming years be enough to attract the quality of people the nation needs to guarantee its prosperity.

One overlooked means with which to replenish Australian skills that are being lost to the diaspora is by increasing education and making it more palatable and useful to those that seek fiscal and social mobility through it. I have covered this issue in the past .

Canada and New Zealand both have highly mobile diasporas due to having a larger economic neighbour with a positive work visa and immigration policy toward their countries. Many Canadians move south and work in the United States, while many New Zealanders do the same with Australia. It is no surprise as salaries and opportunities are greater in the larger economy.

If Australia seeks an influx of skilled workers into its shores, then it only need to look north. Indonesians would love the opportunity to work in the Australian economy. The Australian government should establish a trade and labour agreement with Indonesia which liberalises the movement of goods, capital and people between the two countries. It is a holistic benefit, where both Australia and Indonesia benefit as a group more than they do as individuals.

Offshore Pursuit of Money

I wrote an article on kuro5hin in May of 2003 titled, "The Changing Australian Diaspora" . Which looked at how the diaspora is no longer the backpackers, but highly skilled professionals. The most common reply was that people intended leaving in order to pursue greater remuneration overseas. For instance one comment contained ;

Wages here are crap. I could make what I make in Australian dollars in US dollars if I moved off shore, easily doubling my salary.

This is very true. If Australia does want to compete in the world market for skilled labour, then it is competing against American salaries, which are double Australian salaries when the exchange rate is taken into account. Why would a highly skilled professional who can demand a premium in high-tech economies, want to work in Australia when they can double their worth in the United States. From the Lowy Institute study on the Diaspora ;

The Emigration Survey also confirmed that Australia's expatriates are highly valued on the international labour market, finding that 22% of respondents earned more than A$200,000 per year. ..... Over half the respondent expatriates had a total household income of greater than A$230,000 (54%), while another 45% had a household income between A$110,000 and A$229,000.

Salary wise, we are a backwater and I suspect many of the diaspora moved overseas in pursuit of more money and greater opportunities than the Australian economy can offer.

The Commodity Economy

Through the 50s to the 70s Australia was known as a "Sheep's back" economy, reliant on commodities for its wealth. We are not much different today. Courtesy of the growth of India and China, the ongoing demand for our commodities has meant that we are now a "hole in the ground" economy. We are not even a regional technological centre, competing as we do with Japan, South Korea, Taiwan, China and India.

This point was rammed home the other night when I rang a mate of mine in Australia. I had bought the Stone Roses "Fool's Gold" off of iTunes, partly because I recalled him playing it for me on vinyl in the early 90s in his Newtown flat. His first question was what is iTunes and how do you buy stuff with it? The iTunes store currently only extends to the United States and Europe.

The United States is the world's R&D engine. American business is remarkably good at converting an R&D dollar into a product that is a brought to market. Those that live in the US not only get higher salaries but first exposure to all manner of new technologies - many that are life and culture changing. Australia cannot make this claim.

Australian medicine is well recognized and this is due to the consistent and on-going funding it has received through the health system. The United States has a powerful applied science and engineering sector which draws a good chunk of its long term funding from US military spending. This is one area where Australia is completely lacking. Our defence industry is predominantly integration - not creation or innovation.

Australia should increase its military funding by a third which is entirely devoted to R&D and the creation of new communications and technological systems. A seven billion increase is very affordable and will have large ongoing benefits. The last technological boom - the internet - came from US engineering investment in DARPA and European science investment in CERN. If Australia is to be a regional gravitational centre for technology and hence external investment, it will need this support from the Australian military budget.

Increasing Immigration

Western economies max out in productivity per person unless availability of capital is high. For this reason, if Australia is to rival the economies of Britain, France and Germany, then it must increase the number of economic actors in Australia. This should be done with increased immigration. Australia can increase to the sixty million mark within forty years if it ups its immigration rate to one million per year.

This will put all sorts of pressure in Sydney and Australia's ability to supply fresh water to an increasing population, but these will be solved through innovative technological solutions. I have complete faith in the Australian applied science and engineering industries here. For instance China is pursuing new nuclear technologies to reduce their reliance on exported oil. Facing immigration pressures will cause Australia to seek new partnerships, relations and pursue new technologies.

It will also offer new opportunities for the north to take away the weight of economy and population from South-Eastern Australia. An increased economy will also enable Australia to act independently in economic, political and military matters. Currently the foreign policy that both major parties pursue limits Australian independence.

The "Great and Powerful Friends" doctrine is an inherently sub-servient and limiting doctrine. An increased economic power-base will empower Australia's feeble politicians to assert themselves far more independently than they currently do. Increased economy will also mean increased wealth making Australia an even more appealing place for new immigrants.

Conclusion

Nation-states hinder labour movement, which is ironic as they have opened up capital and trade movement. Bi-lateral agreements which free this barrier are beneficial, especially for the primary economy in the agreement. Examples of this are Canada-USA and Australian-New Zealand. Australia needs to become a stronger economic power based on a powerful domestic consumer economy and technological advance rather than commodities. It is through this that Australia will become a draw for skilled immigration. The Australian Diaspora is a good example of the Australian economy not being able to hold those that seek greater remuneration and opportunities elsewhere.

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