Immigration and the Management of Australian Cities: The Case of Sydney

Abstract

Immigration to Australia surged from a trough of 55 000 arrivals in 1976 to a peak of 145 000 in 1988-89. Community debate was ignited in the late 1980s about the costs and benefits of immigration. A key issue was the impact of immigration on Australian regions, especially the major cities where immigrants predominantly settle. Thus between 1981 and 1986, 56 per cent of immigrants settled in Sydney and Melbourne, with a further 25 per cent choosing the other mainland state capitals. In common with other western industrialised nations, the capacity of governments to finance urban infrastructure by traditional means deteriorated during the 1980s. But there was little evidence that state governments, which are largely responsible for providing urban infrastructure, faced pressing difficulties in meeting basic needs. Local government, which in Australia is responsible for a quite limited range of services, does suffer from financing difficulties owing to limited revenue-raising powers, but this is a chronic rather than cyclical problem. The immigration boom also coincided with rapidly accelerating housing prices, and concomitant decline in housing affordability. Whilst immigrant demand for housing certainly affects prices in the short, and possibly longer terms, there are clearly other supply and demand factors which reduce affordability. The fact that housing is least affordable in Sydney, the preferred choice of immigrants, heightens the intuitive sense of a causal connection. The already parlous state of urban environments also became a moral panic in the 1980s. The apparent association between immigration, population growth and environmental decay was strongly publicised by environmentalists. Infrastructure finance, housing affordability and environmental quality are major concerns, but whilst immigration may exacerbate such problems, this need not be the case. More appropriate policy tools than control of immigration are available. It may even be argued that the pressure of immigration forces politicians and policy-makers to implement those solutions.