The Macrobusiness.com.au article by Leith van Onselen (published March 15, 2026) makes a sharp case that high immigration has no place in a modern economy — especially one entering the AI and automation age. The piece (partly paywalled, but with clear free excerpts and tied to the author's recent series) dismantles the standard pro-immigration growth narrative using Australia's own post-2000s experience as Exhibit A.

It builds on two companion arguments from the same outlet:

"Why high immigration harms productivity and living standards" (March 8)

"With AI taking jobs, why do we need immigration?" (March 11)

Together they form a coherent takedown. Below is a structured outline of the key myths peddled by mass-immigration advocates and the fallacious pro-growth arguments that collapse under real-world data.

Myth 1: "High immigration fixes labour shortages and the ageing population crisis."

The claim: Migrants fill skills gaps, support aged care, construction, healthcare, etc., and keep the dependency ratio sustainable.

The reality (whack-a-mole effect): Australia has run one of the largest migration programs in the developed world this century, yet labour shortages remain chronic and persistent. Importing workers for one sector simply creates shortages in another. Classic example: migrants brought in for aged care → shortages appear in construction. The article calls it "migration whack-a-mole." Record net overseas migration (NOM) has not solved shortages — it has merely shuffled them around.

In the AI era this becomes even more absurd: technology is already automating routine and even semi-skilled jobs. Why fly in hundreds of thousands of extra workers when machines can do the work without adding permanent population pressure?

Myth 2: "Immigration boosts productivity and lifts living standards for everyone."

The claim: Migrants are "better educated and more highly skilled than the average Australian," so they raise overall productivity. Pro-immigration lobbyists and Treasury-style modelling always "prove" this.

The fallacy exposed: This relies on spurious modelling that assumes skill levels magically translate into higher output per worker. It completely ignores empirical evidence.

What actually happened after NOM more than doubled since the mid-2000s:

Labour productivity growth (GDP per hour worked) and per capita GDP growth slowed dramatically.

Australia suffered capital shallowing — the capital-to-labour ratio fell because population (and workforce) growth far outpaced investment in machinery, equipment, housing, roads, schools, and hospitals.

Result: each new worker has less capital to work with → lower output per hour → lower living standards per person.

Charts in the related Macrobusiness analysis (from IFM Investors chief economist Alex Joiner) show the correlation perfectly: the immigration surge lines up exactly with the productivity and per capita GDP slowdown. Former RBA Governor Phil Lowe nailed it: "If you get more people, but fail to provide them with the same capital equipment… everyone's standard of living goes down, not up."

Headline GDP might look bigger (population Ponzi), but per capita metrics — the ones that actually matter for wages, living standards, and quality of life — have been hammered.

Myth 3: "Mass immigration is essential for economic growth in a modern economy"

The claim: Bigger population = bigger economy = win for all.

The fallacious logic: This confuses aggregate growth with per-person prosperity. It pretends infrastructure, housing supply, and capital investment can magically scale instantly with population. In reality, rapid immigration-driven population growth has:

Crushed housing affordability

Strained infrastructure

Depressed per capita investment

Slowed multifactor productivity

In a genuine modern economy (AI, robotics, automation), labour shortages are increasingly temporary and technological. Importing low-to-medium skilled workers at scale is the 20th-century solution to a 21st-century problem. It dilutes capital per worker at the exact moment technology offers a path to genuine capital deepening and productivity gains.

The Bottom Line from the Article

High immigration in its current form is not a growth engine — it is a growth illusion that masks declining per capita living standards. The evidence from Australia's own experiment is clear: after two decades of world-beating migration intakes, productivity and real wages have stagnated while housing and infrastructure crises have intensified.

Real solutions proposed:

Significantly smaller, better-targeted migration program (focus on genuine skills gaps only).

Aggressive incentives for private investment in machinery, equipment, and infrastructure.

Let AI and automation handle routine labour needs instead of importing more people.

The pro-mass-immigration lobby keeps repeating the same modelling fairy tales. Macrobusiness (and the empirical data) keeps showing the real-world outcome: slower productivity, lower per capita GDP, and falling living standards. In the age of AI, the old "big Australia" model doesn't just look outdated — it looks actively harmful.

Australia has a choice: keep playing the population Ponzi game and accept permanently lower living standards per person, or shift to a high-productivity, capital-deepening, technology-driven model with much more modest immigration levels. The article is blunt: high immigration has no place in a modern economy. The data backs it up.

https://www.macrobusiness.com.au/2026/03/high-immigration-has-no-place-in-a-modern-economy/