Migrants a fillip for our economy
Migration is having a significant positive impact on Australia’s economy and boosting living standards, according to a raft of recent research papers.
A recent study by consultants KPMG Econotech found that the continuation of Australia’s current Migration Program compared with not having a program will make the average person $852 better off by 2021.
The study cites the ‘Skill Stream’ as the major driver of this benefit. The ‘Skill Stream’ consists of categories of migrants whose particular occupational skills, outstanding talents or business acumen is in demand in Australia.
According to Monash University researcher Professor Bob Birrell, this has resulted in a ‘brain gain’ for Australia with more people in major or critical occupations coming to Australia than leaving.
“There has been rapid growth in skilled persons coming into Australia,” Professor Birrell said. “The net gain has been double for tradespeople since 2005-06 and for professionals since 2001-02,” he said.
In another study, Access Economics modelled the input of Sponsored Temporary Business (STB) migrants on the living standards of existing Australian residents. The study found living standards would rise by 5.4 per cent over 20 years as a result of the STB program.
Research by Westpac on new Australians, released to coincide with Australia Day this year, reveals migrants contribute $20 billion to the Australian economy annually and almost one quarter are in jobs earning more than $70,000.
Yet another piece of research by the Productivity Commission found that 50 per cent increase in skilled migration would deliver a 4.5 per cent larger economy by 2024. The Commission also found that migration would be unlikely to have a negative impact on income per capita because the annual flow of migrants is small relative to the number of existing workers and because migrants are not very different from existing residents.
Students and backpackers also generate significant economic benefits. Students contribute more than 12 billion in export earnings each year. Research suggests that based on 80,000 arrivals of Working Holiday Makers, a net gain of about 8,000 full-year jobs is achieved and an estimated $1.3 billion is created in export earnings.
Overseas, there is a plethora of research pointing to the benefits of migration.
The Manhattan Institute for Policy Research in the US concluded that migrants increase economic efficiency because they reduce labour shortages. In a recent briefing paper, the institute said that a more flexible immigration system could dramatically improve labour market issues and help reduce the US’ $16 trillion public debt.
The economic contribution of migrants to the UK has been “substantial”, according to a study by University College London. The study found migrants were 45 per cent less likely to receive benefits than UK natives, they were three per cent less likely to be living in government subsidised housing.
It said migrants arriving in the UK since 2000 had made a net contribution of 25 billion pounds to public finances.
With almost 25 per cent of Australia’s current population born overseas, and a recent US study suggesting that immigrants are four times more likely to become self-made millionaires, it’s not surprising that Australia is home to so many successful migrants.
Frank Lowy, as the nation’s richest person, is arguably Australia’s most successful immigrant.
The shopping mall magnate spent part of his childhood in a detention camp in Cyprus and a detainee camp in Palestine. He joined his family in Australia in 1952 and – along with John Saunders (another Hungarian immigrant) – developed his first shopping centre at Blacktown in Sydney in 1959.
BRW magazine assessed Lowy’s wealth at $5.04 billion in 2010. Nowadays, the Westfield Group operates one of the world’s largest shopping centre portfolios, with 104 shopping malls across the world.
John Hemmes left Holland following World War II with just $20 in his pocket, given him by his father.
He first settled in New Zealand and then migrated to Australia in 1952, where he met his future wife Merivale, and together they built the Sydney-based John and Merivale clothing chain.
Initially they lived in a garage at the rear of Merivale’s parents’ home. The garage also doubled as their sewing workshop. Nowadays, Hemmes lives in a sandstone mansion on Sydney Harbour. He is the patriarch of a billion-dollar entertainment empire that includes Establishment and Ivy.
“It’s not being an immigrant that makes you succeed,” he says. “Whatever country you live in, or are born in, or immigrate to, the key is having a hunger and passion to make the best of your life,” Hemmes told The Age newspaper. “One job I had was working at the abattoirs in New Zealand – that is a job that can be soul destroying, but I convinced myself it was for the best, because I needed to survive. I was a young boy not long out of a Japanese concentration camp and did not understand English.”
Zhenya Tsvetnenko is one of the most inspiring immigrant success stories of recent years.
The Russian-born IT entrepreneur is still in his 30s but his net worth is estimated at more than $100 million. It wasn’t always like that. He arrived in Perth as a 12-year-old, speaking little English. His parents had two suitcases and just $6000 to start a new life with their son.
Later, Tsvetnenko married and dropped out of university. In 2005 he launched an SMS Gateway service from his bedroom, living on two-minute noodles and his wife’s wage. In less than two years he was turning over more than $4 million a month.
Tan Le was the 1998 Young Australian of the Year. She co-founded SASme Wireless Communication, a pioneer in providing messaging platforms to telecommunication carriers and content aggregators, and one of the companies responsible for the creation of Australia’s SMS application market.
She helped grow SASme to thirty-five employees and multiple locations worldwide. Tan arrived in Australia as a Vietnamese refugee in 1982.
Huy Truong is a Vietnamese refugee who arrived in Australia as a child and went on to become one of the country’s most successful IT entrepreneurs.
Truong founded online retailer Wishlist with his wife Cathy and two sisters. They sold it to Qantas and he is now a private equity investor.