Australia’s immigration Ponzi scheme

Australia has announced plans to restrict some skilled migrants from living in its largest cities.

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Sydney: Australia's top destination for migrants
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Australia has announced plans to restrict some skilled migrants from living in its largest cities in an effort to "ease urban congestion and encourage skilled workers into struggling towns", says the Daily Telegraph. The proposal which critics say may not be legal or enforceable would add visa conditions that prevent some new arrivals from settling in Sydney, Melbourne or Brisbane for up to five years. Last year, 186,000 migrants arrived in Australia, of whom most moved to Sydney or Melbourne. Around 40% would be affected by the new rules.

The issues behind the proposal "bursting cities, uneven migration patterns" are not unique to Australia, says Henry Grabar on Slate. Canada, where "immigrants have long clustered in just a couple of cities", employs province-based visas to draw arrivals to less populated places. But many economists say that sending migrants to low-growth areas makes little sense and that they move to fast-growing regions with high-paying jobs. The evidence suggests cities function better when they are larger, since they are "strengthened by the increasing potential interactions between people and jobs".

Regardless of this proposal, it's clear that Australia needs to overhaul its approach to immigration, says Salvatore Babones in Foreign Policy. Its population has grown by nearly 45% since 1991. "No other major developed country even comes close to that rate."This has boosted growth, but a continued reliance on adding more people "to float the economy and fund government budgets" risks creating "a giant immigration Ponzi scheme".

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Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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