Why Is Australia Trying to Push Migrants Away from Sydney and Melbourne?

Australia’s angst over its increasing population continues to produce intriguing reactions from its political actors. The latest proposal, from the minister responsible for the newly created portfolio of cities, urban infrastructure, and population, is an attempt to force migrants to Australia to live outside of Sydney and Melbourne for up to five years. The hope is that this will ease the pressure on urban infrastructure in these two cities, and also fuel greater development outside the country’s largest cities.

Australia’s two largest cities — medium-sized cities by global standards — receive the bulk of Australia’s migrant intake, while also remaining magnets for the country’s internal migration. This is consistent with global trends toward greater urbanization. With people motivated to maximize their opportunities, these cities have grown rapidly. Melbourne has added over 1 million people in the past seven years.

Yet, Australian governments (at both the federal and state level) failed to see this urbanization trend coming, and with the proposed visa restrictions still seem to lack an ability to grasp what is happening. They seem somehow ignorant about the labor demand that is driving the growth of these cities. The nature of the post-industrial economy is increasingly urban-centric. With jobs that rely on density, industry clustering, and continual access to new and niche skills, these cities are the essential drivers of innovation and increased productivity. Inhibiting these industries, especially ones that may potentially disentangle the country from an over-reliance on resource extraction and Chinese demand, seems a short-sighted move.

While politicians have talked about decentralizing away from Sydney and Melbourne, these post-industrial jobs simply cannot be shifted outside of these cities. They exist solely in the unique conditions these cities create. Furthermore, in an era of rapid economic change, where jobs are subject to significant churn, the multiple opportunities cities provide makes them even more essential to inhabit. This is the nature of cities; the more people move to them, the more advantageous it becomes for others to do likewise. In addition, many of the skills that allow qualification for Australia’s skilled visa intake simply cannot exist outside this urban clustering, making attempts to push people into regions that have no work for them counterproductive.

Despite the numerous advantages these cities bring to the country, Australian governments seem to do all they can to try and inhibit further urbanization: a negligent lack of investment in public transport, restrictive zoning laws that prevent the supply of new housing to expand, and government incentives that favor investors and existing homeowners over renters and people looking to buy a first property (both cities are in the top five least affordable housing markets globally). Yet the forces of urbanization remain so advantageous that the process has continued despite the roadblocks that governments put in its place. And any new visas the government can dream up to push people into regional areas will undoubtedly be eventually circumvented by the pull of the city.

While strengthening Australia’s regional centers is also a highly advantageous goal, this is not an either/or proposition. The country should desire both urban and regional growth. However, the reality is that if cities are unable get the skills they need due to restrictive visas, then they will simply vacuum people out of the regions instead. Ironically, that means stripping regional towns of their workforces, rather than the government’s desired goal of maintaining and enhancing them.

This new visa proposal seems driven by the anxiety that fuels much of Australia’s strategic thinking, as well as a fear about the shifts in country’s internal make-up, and a suspicion toward trends that the government feels it cannot control. But the global trend toward urbanization is not something that liberal states can subdue; it is the nature of the current economic trajectory. Therefore it is not in the interests of the country for governments to try and create new structures — or indeed shape a public narrative — that is in tension with forces beyond its control.

While commentators and politicians may fret about growth of Australia’s two major cities, the incentives for these cities to continue to grow are vastly more powerful than the tools the government has at its disposal. Any attempts to try redirect people in the country risks kneecapping many of the industries that have become major components of the country’s economic structures. Instead the advantages of more powerful and productive urban centers should be embraced and especially more keenly facilitated.