Assessing the Liberal Party's policy-making capacity
Assessing the Liberal Party's policy-making capacity
Michael Keating

Assessing the Liberal Party's policy-making capacity

Good policy should be evidence-based. But this is not the case with the Liberals energy policy and seems unlikely with their migration policy.

The Liberals have abandoned their commitment to reach net zero carbon emissions by 2050, even though it was originally introduced by a Coalition Government led by Liberal Scott Morrison.

The Liberal Party’s justification for this major policy change is their priority is to ensure that electricity is “affordable”. But there is no explanation of why increasing gas, nuclear and even coal in place of renewables will help to reduce power prices. Instead, as everyone who has examined the evidence knows, renewable energy is the cheapest source of power.

Nevertheless, in a pathetic attempt to justify this policy change, the Liberals like to blame renewable energy for the increase in electricity prices over the last few years, But again this defies the overwhelming evidence that all the increase in power prices in the last four years is entirely explained by the increase in coal and gas prices, not the cost of renewable energy.

But now, having torn themselves apart over carbon emissions and climate change, Sussan Ley is seeking to reunite the party with a new migration policy that will involve fewer migrants, although she won’t say how many yet.

What Ley is inviting the public to believe is that migration has been far higher under Labor and is effectively out of control. But again, this argument is not supported by the evidence.

The fact is that migration was massively reduced during the Covid pandemic, resulting in population growth of only 0.1 per cent in 2020-21 – the lowest growth in over a century. Indeed, over the four quarters ending in March 2021 there was a net emigration of 94,326 people.

According to the Treasury, “By the time the border restrictions were lifted at the end of 2021, net overseas migration was cumulatively almost 500,000 lower than expected prior to the pandemic.”

As was always to be expected, when those restrictions on entering Australia were removed, there was a rebound in migration. But since the peak, towards the end of 2023, the numbers of net overseas migrants have been falling.

Even today, the cumulative total of net overseas migration has not yet caught up with Treasury’s pre-pandemic forecasts and will not do so for another year or two. But those pre-pandemic forecasts reflected the then Coalition Government’s policies.

So why have they changed? What is unacceptable today, that was acceptable then?

Looking further ahead, the forward population projections by the Treasury in its 2023 Intergenerational Report project that the average population growth over the next forty years will be 1.1 per cent, lower than the average annual growth of 1.4 per cent over the previous 40 years from 1982-83 to 2022-23.

In both its 2021 Intergenerational Report, under the Coalition Government and its 2023 Intergenerational Report under Labor, Treasury has assumed that net overseas migration will remain fixed at 235,000 people over the long term. In other words, Treasury has not detected any significant change in what used to be the Coalition’s migration policy since Labor took over the government.

Under the Coalition, this forecast migration of 235,000 people by Treasury was based on then current Coalition government policy, with annual planning levels of the permanent program continuing at 190,000 and the humanitarian program continuing at 13,750, with the remaining temporary migrant numbers not being subject to the same government planning and controls.

By comparison, today Labor’s target for the permanent migration program in both 2024-25 and 2025-26 year is 185,000 places. In both years this figure is composed of a skill stream (132,200 places), a family stream (52,500 places), and a special eligibility stream (300 places).

But what is perhaps of most interest in the present context is that Labor’s target for permanent migration is in fact slightly lower than under the previous Coalition government.

So why does the Coalition want to change their previous policies and what is the evidence to support any such change?

In addition, it is questionable how much room the Coalition has to reduce migration. First, we rely on migration to augment our skills, and perhaps especially in the building industry. Second, the ageing population is increasing budgetary pressures, and immigrants are the main way of restraining the ageing of the population. There are significant negative economic impacts from lower migration.

Both the Liberal’s energy policies and now migration seem to reflect a triumph of prejudice over any examination of the evidence. For a party that has always asked us to believe that it was the more competent economic manager this seems like a betrayal of their historic traditions.

Just as business groups are pointing out the confusion that the Coalition has introduced into energy policy, it seems likely that the Coalition will promote a debate about migration that results in little change in the actual number of migrants. The confusion generated, though, will cause considerable damage to social cohesion and the economy.

 

The views expressed in this article may or may not reflect those of Pearls and Irritations.

Michael Keating