Activity 12(j)

1.  Australia’s population has been growing on average at 1 1/2% per year and it has helped to prevent Australia experiencing a recession experiencing a recession because immigration has benefited both the supply and demand sides of the economy. On the supply side, immigrants have added to both the quantity and quality of human capital,increasing aggregate supply and productive capacity. In addition, immigrants have added to aggregate demand via their spending on goods and services (e.g. consumption and investment).

2. Human capital refers to the quality embedded in labour (e.g. skills possessed by members of the labour force) in terms of the contribution that labour makes to productive effort. The influx of immigrants of the many years has added to the quality of human capital in Australia particularly because many of the immigrants are skilled – meaning that they possess training and quélifications gained abroad that improves their capacity to contribute to production in the economy.

3. Given that most of Australia is immigrants are under the age of 30 it helps to reduce the age profile of Australia’s population and delay the onset of problems that Australia will experience as a result of an aging population. This means that the shrinking in the size of the labour force will occur later as will pressure on the size of the government’s budget deficit to finance both pensions and a more costly health system.

4. Immigration that is excessive will tend to increased pressure on infrastructure,such as more congested roads and highways as well as public transport and greater pressure on the health and education systems. in relation to housing, immigration exerts immediate pressure on the demand for houses which typically add strips the ability of the nation to supply (i.e. construct) houses, which creates a disequilibrium and upward pressure on house prices.

5. Immigration adds to social diversity because Australians will be exposed to a whole range of different cultures, religions, customs, dress, food, etc. In addition, it can promote a more dynamic economy given that migrants tend to have a strong work ethic and are by nature more risk taking and perhaps entrepreneurial, with strong links to foreign markets and different ways of doing things.