The politics of migration hides Australia's real problem - ABC News & Headlines – Australian Broadcasting Corporation

Australia's three key political parties have all offered strategies to lower population growth. (AAP: Dean Lewins)

Everyone now understands that growing the economy only by increasing the number of people, while individuals feel worse off, is a recipe for unhappiness and dissent.

Aggregate growth is a statistic, but individual decline is a vote. The political solution? Fewer people.

That's because those in focus groups and answering polling questions complain about how many people they can see, rather than the reason they are worse off: weak productivity, which they can't see.

As a result, we now have three significant political parties instead of the usual two.

The third newcomer, One Nation, is an anti-immigration party harvesting unhappiness and dissent. The other two have put on some anti-immigration clothes and have got on the grievance catwalk as well.

The starting number for the fashion parade is 300,000, roughly the current level of net overseas migration (NOM). We learnt on Thursday that population growth in the year to March was 392,700, of which 292,100 were migrants.

That is 100,000 a year more than between the Global Financial Crisis (GFC) and the COVID pandemic, and 200,000 more than in the decades before that. ABS data shows that over the past four years, population growth has averaged 400,000 a year, or 1,100 a day. The result is noticeable crowding in cities and a 23.5 per cent increase in the national median house price.

Population growth has produced average annual GDP growth since 2010 of 2.4 per cent, while GDP per capita has grown 0.5 per cent and real disposable income just 0.1 per cent and has often been negative, according to the ABC data.

All agree that we need as much, if not more, skilled migration, preferably from those who can handle a nail gun or a trowel.

That means all three plans affect farmers and universities because the only flexibility to reduce NOM lies with unskilled visitors who pick fruit and vegetables. These workers are needed because Australians don't want to do this work. Students who pay higher tertiary education fees are needed because governments have cut university funding.

None of them is what you would call a promise.

One Nation is closest, offering a pledge and a commitment. The Coalition has an elastic target tied to housing. Labor has converted a forecast into a target.

Tony Burke laid out the government's plan to cap migration at the National Press Club last week.  (ABC News: Matt Roberts)

In a media release to go with his National Press Club speech on Thursday, delayed six weeks while he presumably negotiated with agriculture and education ministers over the impact the changes would have on their constituents, Home Affairs Minister Tony Burke said the plans were "designed to deliver the Net Overseas Migration forecasts in the budget of 245,000 in this financial year and 225,000 in 2027/28".

Treasury must forecast migration for the budget every year, and they are always wildly wrong because this is the first time the minister in charge of migration has taken any notice of them.

Meanwhile, two days earlier, in an exquisitely uncomfortable coincidence, Canada announced a stunning set of policies designed to lift productivity.

It is a year since Canada announced a 23 per cent cut in temporary migration, that is, international students and temporary workers from 6.5 to 5 per cent of the population.

Australia's current stock of temporary residents is 10.5 per cent. Cutting that to 5 per cent would involve deporting 1.5 million people.

Maybe in a year's time the Australian government will also address productivity. If so, they could do worse than draw inspiration from Canada.

Should Australia consider the approach of Canadian Prime Minister Mark Carney's government? (ABC News: Matt Roberts)

It's true that Canada is responding to an emergency: the collapse in its relationship with the United States and the imposition of a 50 per cent tariff on its exports to the US. Drastic reform is neither optional nor politically unpopular.

Australia is dealing with an emergency of a different kind: a rut of low growth and low productivity, with high inflation likely to prompt more interest rate increases starting next week.

This will make life harder for people already in such hardship that they're prepared to try Pauline Hanson and Barnaby Joyce.

Canada has introduced what it calls a "Productivity Mega Deduction" (PM Mark Carney says they already used "super" last year) that expands the number of investments that businesses can fully write off for tax purposes in year one from 15 per cent to 65 per cent.

The qualifying investments include fibre-optic cable and data-network infrastructure, mining property, oil and gas pipelines and production-related capital, software, computer equipment and R&D-related assets, aircraft and vehicles, patents, rail track, bridges and roads and Canadian development expenses.

The Canadian government says this will reduce the overall effective business tax rate on new investment from 13 per cent to 6.4 per cent.

At the same time, Canada's Carney announced a broader plan to streamline approvals for major projects and supply chains, framed as: "One project. One review. One year."

The government's stated standard is that a project should face one coordinated assessment rather than overlapping federal processes and receive a decision within one year.

It sits alongside the new Build Canada Strong Act and extends the expedited approach beyond the projects already handled through the Major Projects Office.

So the tax package lowers the cost of investing, and "one project, one review, one year" is designed to reduce regulatory time and burden and uncertainty.

The key reason for Australia's low productivity is declining business investment.

Not only could the Albanese government copy Mark Carney's approach, but there are also many benefits to doing so.

Alan Kohler is a finance presenter and columnist on ABC News. He hosts the podcast That’s Business with Alan Kohler in the ABC Business Daily feed on Friday. He also writes for Intelligent Investor.