Australia slashes immigration as recession looms

Mon Mar 16, 2009 3:56am EDT
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By Rob Taylor

CANBERRA (Reuters) - Australia will cut its intake of migrants for the first time in a decade, the government said on Monday, amid concern that skilled foreign workers could stoke resentment by taking jobs at a time of rising unemployment.

With a recession looming and the center-left government expecting unemployment to reach 7 percent by mid-2010, Immigration Minister Chris Evans said the intake of skilled migrants would be reduced by about 14 percent.

Australia goes to the polls in late 2010 and immigration has been a charged issue in past polls, particularly following economic downturn.

A leading migration expert, former government official Bob Kinnaird, said record recent migrant arrivals in a fast shrinking job market were leading to "highly combustible" conditions in regional areas, where many new arrivals had settled.

Australia is a nation of immigrants and has been enjoying a boom in new arrivals for the past decade to help meet labor shortages as a China-fueled mining boom drove unemployment rates to 30-year lows.

But six of Australia's major trading partners are now in recession and economic growth has stalled. The country moved a step closer to recession this month with the first contraction in eight years and the economy shrinking by 0.5 percent.

Australia's jobless rate spiked to 5.2 percent from 4.8 percent last month with the biggest impact felt by full-time workers. Some economists fear unemployment levels could go as high as 10 percent.

Evans said the immigration intake next year would be cut to 115,000, from 133,500 in 2008-09.   Continued...