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Drop in immigration numbers this financial year due to introduction of new selection system is not considered to be long term.

PRU GOWARD: Well, immigration to Australia has slumped steeply. It's dropped by 17 per cent so far this financial year, while the number of Australians permanently leaving our country has risen by 30 per cent. Well, immigration officials are wont to blame the new point system for this drop. But joining me now, immigration analyst from Monash University, Dr Bob Birrell.

Good morning, Dr Birrell.

BOB BIRRELL: Good morning.

PRU GOWARD: Dr Birrell, how much of it do you think would be the new point system, and can you explain how it would have caused a decline?

BOB BIRRELL: Well, I don't think you can put much store in these short-term figures. I think they're a temporary aberration which is largely attributable to the introduction of a new selection system and that, I think, explains why there's been a temporary downturn in the arrivals.

As far as the exiters are concerned, that I think reflects the very high numbers that have come to Australia over the last few years. We're now getting the inevitable exodus of some of those who have arrived in recent times. So, I wouldn't .. I think the situation at the moment is that we still have a very high immigration intake, and unless there's a change in government policy, it'll continue.

PRU GOWARD: When you say `high', high by what standards?

BOB BIRRELL: Well, it's high almost by historic standards. We have .. last year we had around net 140,000. That's nearly one per cent. That's a very high rate of growth. Perhaps the best way to express it for listeners is that in the last three years, mid-86 to mid-89, we've had an increase - the last four years, sorry, '85, '89, we've had an increase of one million people in Australia, just over half migrants.

PRU GOWARD: And where are they coming from, Dr Birrell?

BOB BIRRELL: Well, about half of them are coming from Asia and the rest from .. some from the Pacific and ....

PRU GOWARD: And under what schemes?

BOB BIRRELL: Britain is the main, one of the main sources, and New Zealand.

PRU GOWARD: Right. And that's still the family reunion scheme that's bringing them in?

BOB BIRRELL: Well, about half of the intake at the moment is through family reunion, and that is disproportionately Asian, Asia-Pacific. The independent program tends to be more British oriented. We have a very substantial business migration program. That's almost entirely Chinese from Taiwan and Hong Kong.

PRU GOWARD: And explain, just briefly, how the new selection system has slowed down.

BOB BIRRELL: Well, the Government has been trying to introduce a sharper economic focus, and it changed the rules in '87, '88 to try and produce more people with scarce occupational skills here. And then in mid-89, it's introduced a new system which again is oriented to doing that and it's .. what they're doing is they've got a floating pass mark in which they try to take the best. And they keep the pass mark fairly high, but if they don't get the numbers for their program then later on they'll lower the pass mark, and that's why this slowdown perhaps reflects the introduction of a new system. The Government has a program of 140,000 and it will get that 140,000 since it will simply lower the pass mark if the numbers aren't coming in according to expectation.

PRU GOWARD: As you say, an historically extremely high level of immigration, a million people, half ... increase in population, half of them are migrants. Is it doing us much good economically?

BOB BIRRELL: Well, the problem at the moment is that this high rate is running directly counter to the Government's concern to slow down demand. If you have a rate of population growth approaching 2 per cent, really, you are generating substantial demand, particularly in the urban area in housing, and that runs counter to the concern to reduce demand.

PRU GOWARD: So it actually could be exacerbating the balance of payments problem?

BOB BIRRELL: Well, in the sense that the increased numbers certainly add to demand pressures, yes. There's no direct linkage between the arrival of migrants and our export revenues. I think one of the perhaps more serious long-term problems associated with this boom in numbers, and particularly the huge growth in cities like Perth and Sydney, is that this has helped fuel the boom in urban city building, in offices and housing, and of course siphoned off much of our scarce capital into those industries. So, in that sense, the boom in numbers runs counter to our concern to try and streamline our economy, specialise and increase the productive base.

PRU GOWARD: Dr Birrell, thank you for your time. I'm sorry, we'll have to leave it there. Dr Bob Birrell from Monash University, immigration.