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Businessman Dick Smith says reopening immigration to skilled migrants will keep wages down

The opening of Australia to thousands of skilled migrants from next week for the first time in almost two years could stop many workers from getting a decent pay rise.

Millionaire businessman and philanthropist Dick Smith says Prime Minister Scott Morrison’s reopening of the borders on December 1 is designed to push down labour costs for businesses.

‘It will keep wages down: that’s the main idea that the wealthy want to bring more people in,’ he told Daily Mail Australia.

‘It’s called the marketplace: having more and more people applying for the available jobs.

‘They can train up Australians to do many of these jobs but that’s expensive whereas it’s so much cheaper to bring them in from overseas.

‘You can bring them in basically for nothing, if you’re one of the billionaires, it’s the easiest way of increasing your wealth, which is what they’re all about.’

 

The opening of Australia to thousands of skilled migrants from next week for the first time in almost two years could stop many workers from getting a decent pay rise

From Wednesday next week, fully-vaccinated foreigners with a working or student visa will be allowed into Australia again. 

Who will be allowed in from December 1?

Fully-vaccinated visa holders

They include skilled migrants, international students, humanitarian program recipients, working holiday visa holders and provisional family visa holders

Visitors from South Korea and Japan won’t have to quarantine 

‘The return of skilled workers and students to Australia is a major milestone in our pathway back,’ Mr Morrison said.

‘It’s a major milestone about what Australians have been able to achieve and enable us to do.’

By January, the federal government is expecting 200,000 skilled migrants and international students to have arrived.

That number, in less than two months,  surpasses Australia’s net annual immigration rate for an entire year before the pandemic.

Vaccinated citizens of Japan and South Korea will also be allowed in without quarantining, as well as people on humanitarian visas.

The government is selectively admitting some tourists but has not decided when they will all be admitted.

Australia has since March 2020 been closed to non-residents and non-citizens.

Last year, the population shrunk for the first time since 1916, with deaths outnumbering births in the absence of immigration.

Net annual migration in the 2020-21 financial year was forecast by Treasury to fall by 71,600, marking the first negative number since 1946, when departures were subtracted from arrivals.

For a university or high school student working part-time, putting in 15 hours a week on the minimum wage of $20.33 an hour works out at $305 a week, compared with $315 a week for JobSeeker unemployment benefits (pictured are Surry Hills cafe owners in October)

For a university or high school student working part-time, putting in 15 hours a week on the minimum wage of $20.33 an hour works out at $305 a week, compared with $315 a week for JobSeeker unemployment benefits (pictured are Surry Hills cafe owners in October)

Yet, despite the closure of Australia’s border, wages growth has remained weak, growing by 2.2 per cent in the year to September, equaling the level of March 2020 after dropping late last year.

Pay growth is below the decade-average of 2.4 per cent and has been below the three-decade average of 3 per cent since mid-2013, Australian Bureau of Statistics figures show.

Hospitality wages grew by a slightly better-than-average 2.5 per cent, even though the Fair Work Commission delayed minimum wage increases in the food and accommodation sectors until November 1.

Mr Smith, the 77-year-old founder of an electronics chain, said many young people are better off on welfare than taking a minimum-wage job in a cafe, so many business owners have been crying out for staff in the absence of foreigners – who are ineligible for the same welfare.

‘They have a genuine problem: they can’t get many Australians to work in their organisations so they’re going to ask to get the immigration up,’ he said.

‘Many Australians just don’t want that type of job and our social services are high enough – they’re not well off but they’re obviously well enough off to not have to go and get a job.’

Millionaire businessman and philanthropist Dick Smith has slammed Prime Minister Scott Morrison's plan to reopen the floodgates to immigration on December 1, arguing it would keep wages down and keep billionaires happy

Millionaire businessman and philanthropist Dick Smith has slammed Prime Minister Scott Morrison’s plan to reopen the floodgates to immigration on December 1, arguing it would keep wages down and keep billionaires happy

For a university or high school student working part-time, putting in 15 hours a week on the minimum wage of $20.33 an hour works out at $305 a week, compared with $315 a week for JobSeeker unemployment benefits. 

House prices keep surging in Australia

SYDNEY: Up 30.4 per cent to $1,333,767

MELBOURNE: Up 19.5 per cent to $972,659

BRISBBANE: Up 24.8 per cent to $731,392

ADELAIDE: Up 22.5 per cent to $591,558

PERTH: Up 16.7 per cent to $550,044

HOBART: Up 27.2 per cent $726,955

DARWIN: Up 17.1 per cent to $567,056

CANBERRA: Up 29 per cent to $985,040

Source: CoreLogic data in median house price increases in the year to October 2021

Reserve Bank of Australia Governor Philip Lowe isn’t expecting the wage price index to hit the 3 per cent mark until 2023, even though unemployment is expected to drop to 4 per cent for only the second time since 1974.

Westpac senior economist Justin Smirk said the slight uptick in wages was because pay levels were frozen during the national Covid lockdowns of last year.

‘A large share of the recent boost to wage increases appears to have a component of catch-up from the wage freezes of 2020,’ he said.

‘Wage are being boosted in sectors where labour shortages are more pronounced. 

‘However, we are yet to see broader wage gains.’

Mr Smith said house prices surged, in the absence of immigration, as investors and owner-occupiers alike anticipated population growth to climb again and underpin real estate values.

‘One of the reasons that house prices remained high is that everyone is convinced that the government – whichever government’s in – is going to increase immigration because they’re completely addicted to it,’ he said.

‘Many of the wealthy, I’d say most, have no interest in whether a young couple can afford a house or not.’ 

Despite the absence of immigration, house prices have surged to record highs, with Sydney’s median value climbing by 30.4 per cent in the year to October to an even more unaffordable $1.334million, CoreLogic data showed.

Australia’s biggest city had been particularly dependent on immigration before the pandemic but demand for houses still soared, thanks to the Reserve Bank cutting interest rates to a record-low of 0.1 per cent. 

Across Australia, house and unit prices have risen by 21.6 per cent in a year, marking the sharpest annual rise since early 1989.

By January, the federal government is expecting 200,000 skilled migrants and international students to arrive. That number, in less than two months, would almost surpass Australia's net annual immigration rate for an entire financial year before the pandemic (pictured are students outside the University of New South Wales)

By January, the federal government is expecting 200,000 skilled migrants and international students to arrive. That number, in less than two months, would almost surpass Australia’s net annual immigration rate for an entire financial year before the pandemic (pictured are students outside the University of New South Wales)

The mid-point price of $686,339 is now so expensive an Australian on an average, full-time salary of $90,329 would be in mortgage stress paying off a $550,000 loan with a 20 per cent deposit.

Australia’s population growth

1881: 2.3 million

1918: 5 million

1959: 10 million

1981: 15 million

1991: 17.4 million

2004: 20 million

2013: 23 million

2016: 24 million

2018: 25 million

2020: 25.7million

2061*: 38.8million

* Treasury Intergenerational Report, 2021 forecast

Source: Australian Bureau of Statistics

The Australian Prudential Regulation Authority considers a debt-to-income ratio of six or more to be risky.

Before the pandemic, Australia had a net annual immigration rate of 239,700 in 2018-19.

This fell to 154,100 in 2019-20, with the period covering the first three months of the pandemic.

The past 40 years have seen Australia’s population grow at an average, annual pace of 1.4 per cent – among the highest in the developed world.

Australia’s population surpassed the 20 million mark in 2003, hit the 23 million mark in April 2013 and reached 24 million in February 2016.

The 25 million milestone was reached in August 2018, 24 years earlier than Treasury anticipated in its inaugural Intergenerational report of 2002.

But the pandemic interrupted that trajectory. 

Between June and September last year, Australia’s population fell by 4,200 people or 0.02 per cent, as more people left than arrived and births failed to make up the shortfall.

This was the first population decline since 1916.

Covid bans on immigration are expected to reduce population growth to 0.1 per cent in 2020-21, the lowest in more than a century. 

But that is set to change, with Mr Smith blaming billionaires in particular for successfully lobbying the government to revive immigration to boost their profitability and wealth. 

‘It’s just about showing off,’ Mr Smith said. 

House prices have surged to record highs, with Sydney's median value climbing by 30.4 per cent in the year to October to $1.334million. Mr Smith said house prices rose, in the absence of immigration, as buyers braced for population growth to surge again (pictured is an auction at Strathfield)

House prices have surged to record highs, with Sydney’s median value climbing by 30.4 per cent in the year to October to $1.334million. Mr Smith said house prices rose, in the absence of immigration, as buyers braced for population growth to surge again (pictured is an auction at Strathfield)

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