Irish people fleeing recession find safe haven in Australia

SYDNEY LETTER:Unemployment remains steady at under 6 per cent, less than half the rate in Ireland

WHEN AUSTRALIA’S treasurer, Wayne Swan, heard the country’s economic growth figure for the first quarter of this year, he just said one word. It begins with “f” and has four letters.

He said it in relief, not despair. The economy had recorded negative growth in the final quarter of 2008, but positive growth in the following quarter meant Australia avoided going into “technical” recession.

While Ireland’s unemployment rate is 12.5 per cent, the rate in Australia remains steady at 5.8 per cent. Only six developed countries have a lower rate.

US exports dropped by 15 per cent in the last financial year, and Japan’s slumped by 29 per cent, but Australia’s exports, buffered by the still rampant Chinese and Indian demand for resources, fell by only 0.2 per cent.

So what has gone so right for Australia? The reserve bank played a big part by cutting interest rates to their lowest since the 1960s. The official rate of 3 per cent is still higher than in most other countries, but the cuts were enough to prevent a collapse in house prices.

A greater contributor has been the government’s $42 billion (€25 billion) economic stimulus package. In the first stage, last December, families got $1,000 for each child and low-income earners got payments of up to $1,400. A second tranche saw anyone who filed a compulsory tax return last year get an extra $600 to $900, depending on how much tax they paid.

The feelgood factor of cash handouts has been compounded by public spending on what have been called “shovel-ready” projects. This will result in, for instance, every school in the country getting a new or upgraded building.

The just released Organisation for Economic Co-operation and Development (OECD) Employment Outlook 2009 report says the stimulus package has saved up to 200,000 jobs.

“Estimates in the OECD suggest employment in Australia is likely to decline by between 1.4 per cent and 1.9 per cent, or around 150,000 to 200,000 jobs, less by the end of 2010 than if no fiscal measures had been taken.

“This is due to both the relatively large size of the fiscal package and the degree to which employment responds to fiscal stimuli such as tax cuts or public expenditure,” the report says.

The enormity of the government’s spending is possible because the economy was in good shape directly before the global financial crisis hit. And though Swan and Australian prime minister Kevin Rudd have been quick to accept praise for their handling of the economy, Labor was in power for only 10 months before the crisis started. The fact that it was handed a strong economy after almost 12 years of the Liberal- National coalition under John Howard has gone unmentioned.

This has angered the Liberals, but the impotence of opposition has left them sniping from the margins. “We will be paying the price of the stimulus package for many, many years to come,” said Liberal frontbencher Tony Abbott.

Australia has become a safe haven for many people escaping the recession in Ireland. The number of Irish people getting a one-year working holiday visa – available to those aged 18 to 30 – is up by a third in the past year.

Some 22,788 visas were issued in the year to June 30th, up from 17,120 in the previous 12 months.

Barry O’Brien (27), from Midleton, Co Cork, arrived in Sydney in July.

“I was made redundant at the start of May. We were told in June 2008 it was likely to happen, so I had some time to prepare myself for it,” he says.

“The economy in Ireland was going downhill and I decided I wanted to get out. Australia seemed to still be a good place to go. My redundancy was enough to get me to Australia on a one-year visa. It took me six weeks to find work and it’s similar to what I did in Ireland. I was in field sales in Ireland and I work in advertising sales here.”

O’Brien adds: “It’s been a good move for me economically and I’ve got to enjoy some hot weather too.”

Dubliner Seán O’Callaghan (29) is on his second Australian 457 visa, which covers foreign workers with specific skills, such as engineering, computing and some building trades.

He works in information technology through a Sydney-based agency which sponsored his visa. The visa application costs about $1,000 regardless of whether you get it or not, and the agency gets 14 per cent of the gross daily rate he gets from his end employer. But O’Callaghan is happy with the process.

“The regulations changed between my first and second visa and the fee taken jumped from 4 per cent to 14 per cent,” he says. “But the agency helps secure your visa so at the end of the day it’s a small price to pay to be in Australia rather than home in Ireland in the recession.”