A new Lowy Institute discussion paper by Leon Berkelmans and Devpolicy alumnus Jonathan Pryke promotes the development benefits of expanding Pacific access to Australia’s labour market and suggests a path forward to realise these benefits. In another signal Pacific labour mobility is attracting renewed attention, the authors posit if Australian Prime Minister Malcolm Turnbull is serious about a ‘step-change’ in the relationship between Australia and the Pacific built on fresh ideas, tackling labour mobility should be a high priority.
Berkelmans and Pryke find allowing just one per cent of the Pacific’s relatively small population to work in Australia each year would be a greater economic contribution than Australia’s entire current aid budget to the Pacific. A more expansive ‘open access’ regime could generate migrant income up to $25 billion by 2040 (2005 PPP adjusted US$). The magnitude of this finding outstrips that in the World Bank-ANU Pacific Possible Labour Mobility report [pdf] but echoes the same sentiment: every additional Pacific migrant who can work in Australia will create economic benefits for themselves, their families and communities.
The paper raises possible risks associated with the proposal and rightly suggests these can be mitigated by effective policy design. The only major question I have is how best to model a future flow of migrants under an open access regime. The authors base their projections primarily on historical migration outcomes under the Compact of Free Association, where Micronesian countries, Palau and Marshall Islands enjoy access to the United States. The projections appear on the low side to me, particularly as a more mature diaspora community develops and acts as a long-term pull on potential migrants. To give the authors credit, getting the number exactly right is not the intention. Predicting migration flows is inherently difficult [pdf] due to large unknown factors and future events that may ‘shock’ flows. In the Pacific, natural disasters are the obvious candidate, however others may include political unrest and climate-induced environmental changes.
Therefore any quibbles on technical assumptions should not detract from the larger message, which is emphatic. Pacific labour mobility would have a substantial economic effect for Pacific households while the effects in Australia can be largely accommodated. As the authors note, many Pacific countries face intimidating development challenges and labour mobility represents a practical policy to overcome some of these. If the Turnbull Government can realise a ‘step-change’ in Australia’s relationship with the Pacific, then the questions posed by this report are among the most important to be considered.