There are no solutions in economics, only trade-offs. It's a great quote from economist Thomas Sowell, and it highlights the dishonesty we are seeing in Australia's immigration debate.

Subscribe now for unlimited access.

Login or signup to continue reading

A bunch of politicians, particularly in One Nation, have talked endlessly about the need to slash immigration.

And yet, despite the sheer number of hours they've spent discussing the topic, they rarely if ever mention what the costs might be from doing this.

So let's run the thought experiment. What would happen if we slashed immigration to zero? And what wouldn't happen?

The first thing that would happen is that Australia would quickly go into recession.

A recession is commonly defined as two consecutive quarters of negative GDP growth. Australia has had five negative quarters of GDP growth over the last 20 years. The only time they've occurred consecutively - a recession - was during COVID-19.

When we look at GDP growth per person, however, we see a very different story.

Over the past 20 years we have had dozens of quarters of negative GDP growth per capita, and have had multiple "per capita recessions" - where per capita GDP goes backwards for at least two consecutive quarters.

Australia had a per capita recession around the time of the global financial crisis.

We had another before COVID-19, another during COVID-19 and a long per capita recession between 2023 and 2025.

What does this have to do with immigration?

Simple: If GDP is growing while GDP per capita is shrinking, then this means that the only thing keeping the economy out of recession is that the number of people is going up.

This isn't really economics at all. It's maths. If Australia cuts immigration while fertility rates remain low, Australia goes........

© The Examiner