An immigration lesson for ignorant Australian journalists

Australian journalists and economists recently criticized One Nation's proposal to reduce the number of temporary migrants back to pre-pandemic levels. Journalist Hugh Riminton dismissed the argument as "asinine" and "ignorant." He pointed out that Australia's population has grown at more than twice the OECD average since 2000, yet it still faces skills shortages.

The aging population is largely due to migrants who arrived in Australia during the 1950s and 1960s, who now constitute over one-third of older Australians. The notion that an aging population is bad for the economy is also absurd. Dr. Cameron Murray's research showed that every advanced economy has a higher share of workers today than in the 1970s, despite rapidly aging populations.

Australia's population has exploded, while Japan's has shrunk. Despite this, Japan has a higher working population than Australia. The World Bank data debunks the argument that Australia needs to run one of the world's largest immigration programs to ensure enough workers. Instead, Australia should aim to use its existing labor force more efficiently.

One way to do this is by abolishing the income test for the aged pension to encourage older Australians to work. This would allow seniors to work without facing punitive tax rates, as the current rules discourage it. New Zealand has one of the highest workforce participation rates among those aged 65 and over in the OECD, largely due to a non-means-tested pension.

Australia's labor force participation rate for those over 65 is 10% lower than New Zealand's. Australia could gain over 500,000 workers if its labor force participation rate for those over 65 matched New Zealand's, boosting the economy without increasing demand for housing, infrastructure, and services. Journalists should instead lobby for practical policies like these instead of spreading myths about immigration solving population aging and labor shortages.