The Cost of Multiculturalism

By Stephen Rimmer
Volume 3, Number 1 (Fall 1992)
Issue theme: "Revealing the costs of immigration"

In the mid 1970s, Australian governments adopted the policy of multiculturalism. The essence of multiculturalism came to be accepted as providing all Australians - regardless of ethnic background, race and religion - equality and freedom. However, this policy has also seen the growth of government funded ethnic groups which have exerted consider-able influence over Australia's immigration program. By the late 1980s there was growing public debate in Australia about the economic and social costs of multiculturalism.

The policy of multiculturalism receives strong support from all major political parties. However, there is a considerable degree of confusion about 'multiculturalism,' because official government definitions have been changed regularly to portray the policy as being 'all things for all people.' Initially, multiculturalism highlighted the 'rights' of ethnic Australians. It has also come to be associated with affirmative action policies in favor of ethnic minorities and been used to describe cultural and ethnic diversity.

Despite such ambiguity, all opinion polls and independent studies in Australia illustrate clearly that the vast majority of the population opposes the policy of multiculturalism. Public opposition has developed primarily because multicultural policy in practice is seen by the public to be inconsistent with official government definitions.1 This policy has been implemented through growing government patronage, regardless of the political party in office. By the late 1980s, multiculturalism had come to be associated with extensive government spending and regulation of economic and cultural activities. Increasingly, Australian governments employed ethnicity as a criterion for the allocation of public goods and services for a wide range of cultural and economic activities. In addition, it had become apparent that powerful and unelected ethnic leaders and organi-zations were receiving large amounts of money - in the form of covert grants - from Federal, State and local governments. Government funding which specifically aims to attain multicultural goals is usually called 'multicultural funding.'


The policy of multiculturalism was primarily a product of government patronage during the 1970s, when selective government funding was used to assist ethnic leaders to establish ethnic organizations. The magnitude and scope of such funding expanded quickly because of competition among politicians to attract the so-called 'ethnic vote.'2 Special funds were established by governments for multicultural and ethnic activities which were not available to the majority population. This led to the development of a 'multicultural lobby' which comprises an organized network of ethnic leaders, politicians, sections of the bureaucracy and media, and other beneficiaries of government funding.

By the late 1980s, over 20 members of Australia's Federal Parliament held dual citizenship, apparently contravening sections of the Australian Constitution which disqualify persons with foreign citizenship from holding elected office. However, no legal action has been taken against such persons, most of whom are prominent supporters of multiculturalism in the Australian Parliament. In addition, due to widespread public opposition to the policy, Australian governments deliberately suppressed the dissemination of information regarding the potential economic and social costs of multiculturalism.

Criticism of multicultural policy is often met automatically by claims of 'racism,' thereby diverting attention away from informed debate of the facts and forcing individuals to justify themselves and prove their 'innocence.' For example, in the mid 1980s, one of Australia's most respected historians, Professor Geoffrey Blainey, criticized aspects of multiculturalism, claiming the policy could increase racial and ethnic tensions and threaten national security. Supporters of multiculturalism then instigated a coordinated public attack designed to undermine his reputation and standing in the community. This campaign was successful in polarizing public debate. It also led to serious threats to the personal safety of Professor Blainey.

The personal attacks on Professor Blainey were unprecedented in Australia since the early 1950s, where individuals thought to hold left-wing views were undermined through a campaign instigated by governments and pressure groups. In 1988, a similar campaign was conducted by the multicultural lobby against the then-Leader of the Federal Opposition, Mr. John Howard, who expressed concerns about multicultural policies. This campaign resulted in Mr. Howard's being replaced as Leader of the Opposition by a supporter of multicultural policies, Mr. Andrew Peacock.

'Federal, State and local

governments [in Australia] are

likely to spend over

A$100 million each year

simply promoting, supporting

and justifying the policy of


By 1988 it had become apparent that habitually calling people 'racists' had undermined support for the policy of multiculturalism, even among potential supporters. Indeed, the Federal government had developed more subtle means of regulating and controlling public debate about multiculturalism, through allocating supervised funding and grants to the multicultural media, pressure groups, university centers for multicultural studies and individuals supporting current policy.

The criteria and terms of reference of multicultural funding are usually designed to highlight supposed benefits to Australia from multicultural policy. Such funding has led to a proliferation of thousands of reports, books, and monographs supporting this policy. The modus operandi would usually start with governments funding research projects which would 'discover unmet needs,' recommending more government funding and patronage for the multicultural lobby.

When specific criticisms are made of this policy, researchers and academics are usually commissioned by government organizations such as the Office of Multicultural Affairs (OMA) - which reports directly to the Prime Minister through the Department of Prime Minister and Cabinet - to undermine and refute claims critical of this policy. The effect of such funding has been to distort and manipulate public debate.

Federal, State and local governments are likely to spend over A$100 million each year simply promoting, supporting and justifying the policy of multiculturalism. It includes the subsidizing of the multicultural media; academics and researchers who support this policy; and 'education' programs for children, students and the community. However, the full extent of multicultural funding is unknown, partly because it is often allocated in a covert manner. During the late 1980s, an investigation of the fiscal impact of multiculturalism discovered extensive covert government funding.3 In response, various government-funded academics, such as Dr. James Jupp, denied covert payments were made.4 However, Federal government documents leaked to The Age newspaper in 1990 proved that governments were involved in substantial covert funding of ethnic groups and their leaders.5

By the late 1980s, the multicultural lobby in Australia turned its attention to modifying the legal system. Various ethnic groups have lobbied - with some success - for special treatment within the legal system for 'ethnic' Australians. Indeed, newspapers such as the Australian Muslim Times recently claimed that different ethnic and religious groups should have their own legal system. The Australian Law Reform Commission, which oversees changes to Australia's legal system, has also recommended changes to the legal system which would change fundamental legal principles, including the concept of equality before the law for all citizens and the principle of 'ignorance is no excuse'.

The implementation of multiculturalism in Australia illustrates how democratic processes, the legal system, and even the Constitutions can be circumvented and manipulated by powerful vested interest groups.


The implementation of multicultural policies has imposed a number of social and economic costs on Australia.

* Wasteful targeting of government goods and services. Over the last fifteen years governments have developed extensive criteria for categorizing all Australians according to their ethnic background, and using such categories for allocating public goods and services. The most common method of ethnic categorization used by governments is language rather than racial background. Australian governments indiscriminately classify all non-English-speaking background (NESB) persons as 'disadvantaged.' Persons and groups classified as 'disadvantaged' receive preference in almost all government programs, funding and recruitment. Therefore, governments are able to discriminate in favor of some Australians and against others on the basis of ethnicity, while at the same time claiming to be helping only those in genuine individual need.

Targeting individuals for affirmative action and preference on the basis of language background - as distinct from ability to speak English - is a highly inefficient, wasteful and inequitable method of service provision.

* Transaction costs of multicultural regulations. Transaction costs are incurred within an organization through writing reports, undertaking research and other administrative functions. The policy of multiculturalism increases these costs. For instance, Federal government multicultural regulations such as the 'Access and Equity' plan require all government departments to establish contacts with the multicultural lobby, to insure that they influence policy formulation and implementation. These regulations also require all departments to classify employees according to language background and provide preference in recruitment to NESB applicants, therefore abandoning recruitment based on individual merit.

Those departments which do not attain quotas established by the Federal government's 'Equal Opportunity Unit' are assumed to be 'guilty' of discrimination and receive special attention from this unit and the OMA until targets are achieved. Yet most independent Australian research into the issue of workplace discrimination illustrates that migrants in Australia rarely - if ever - encounter workplace discrimination and statistically obtain employment consistent with their level of education and experience.6 Such studies are usually ignored by the multicultural lobby.

'The lack of English language skills

in the workplace imposes substantial

economic costs in the form of

lost productivity and reduced

international competitiveness.'

Increasingly, Australian governments also provide information in dozens of 'community languages' requiring additional spending on translation, interpretation and printing services. Multicultural regulations require the employment of yet more staff to carry out functions such as filling out forms, working with multicultural groups, preparing submissions to regulatory organizations within government, and categorizing staff according to language-background categories developed by governments. These costs (known as 'paper burden' costs) increase the running costs of government - including salaries, administration expenses, and minor capital works / equipment. Even if one were to assume that additional 'paper burden' costs imposed on governments by multicultural regulations were only a small proportion of these running costs, across all government departments the total cost would be substantial. These costs are not identified separately in government budget papers and are therefore effectively hidden from the public in larger categories of administrative expenses, such as personnel management and training.

* Efficiency, productivity and international competitiveness. Throughout the 1980s, Australian governments reduced emphasis on the ability to speak and read English in the selection of new immigrants and the recruitment to the public service. The lack of English language skills in the workplace imposes substantial economic costs in the form of lost productivity and reduced international competitiveness. For example, in 1989 the OMA estimated the poor English language skills cost Australia A$3.2 billion each year in additional communication time needed in the workplace.7 This estimate was used to justify more government spending on English language training. In addition, it was claimed in a report published by the Federal government-funded Bureau of Immigration Research that lost output owing to unemployment caused by lack of English language skills could be as high as A$1.6 billion per year.8 The lack of English language skills also increases workplace accidents. In addition, increased welfare spending for immigrants who could not speak English and were unemployed in 1991-92 was estimated by the prominent academic Dr. Bob Birrell to be A$340 million.9 While the total cost of English language training is unknown, the Federal government in 1990-91 allocated approximately A$300 million directly for English language training. In all, the lack of English language skills in the workplace could cost Australia over A$5.4 billion per year - equal to 1.5 per cent of Gross Domestic Product (GDP).

'Until accurate information about

government spending on multi-

culturalism is made available by

governments, an informed public

debate ... will not be possible.'

However, this estimate of the economic cost of lack of English language skills does not include spending by State and local governments for language training of employees who have difficulty communicating in English. Nor does it include substantial spending on language training by commerce and industry.

* Industry assistance. Governments often provide industry assistance to firms and industries which are associated with multicultural goals, such as the creation of ethnic diversity. However, such assistance has resulted in the loss of tens and possibly hundreds of millions of dollars of public funds, through various schemes such as the failed 'Darwin Trade Development Zone' (cost A$62.0 million) and an Islamic Abattoir (cost A$5.5 million). Despite such failures governments appear to believe that they can still 'pick the winner' and attain multicultural goals through the development of a new high technology city, called the 'Multi-function Polis.' This project will involve substantial financial and planning input from the Japanese government and businesses. It will also involve some A$250 million in public spending for basic infrastructure.

* Direct government spending. The full extent of government multicultural funding is unknown. For example, detailed information is publicly released each year highlighting Federal Government spending on women and Aboriginal affairs. However, to date no detailed information has ever been provided about multicultural spending.10

Until 1991 there was a systematic attempt by governments to hide the full fiscal costs of multiculturalism by incorporating multicultural spending into larger mainstream programs. Thus, most multicultural programs are not identified separately in publicly available government budget papers. However, in 1991 it was claimed in the book The Cost of Multiculturalism that the fiscal cost of multiculturalism was approximately A$2.0 billion per year, with an additional A$300 million being allocated to pay for the direct costs of Australia's immigration program.11

Following publication of this book, a number of conflicting estimates of the fiscal cost of multiculturalism were made. First, a senior journalist with the government-funded multicultural media claimed that the cost was only A$93 million per year.12 Second, an estimate of the fiscal cost of A$140 million was made by the Federal 'Opposition Minister for Immigration and Ethnic Affairs.'13 This was followed by an investigation by an Australian newspaper, which claimed that the cost was A$500 million per year.14 With a growing public debate about the fiscal cost of this policy, the Federal government provided, for the first time, limited information about the fiscal cost of multiculturalism which was estimated to be A$300 million per year.15 However, this estimate was inaccurate because it ignored various multicultural programs which are effectively hidden in larger 'mainstream' programs as well as spending by State and local governments. It was this funding which places the estimated fiscal cost of multiculturalism at over A$2.0 billion per year.

While the Federal Opposition continues to support the policy of multiculturalism, it was conceded that there was a 'need for the Government to present a detailed budget on expenditure for multicultural programs to ensure that monies are being allocated in a responsive and responsible way.'16

Until accurate information about government spending on multiculturalism is made available by governments, an informed public debate and analysis of the costs and benefits of multiculturalism will not be possible. While the suppression of informed public debate about multiculturalism might be a key goal of a section of the Federal Government, it is not consistent with the principle of accountability which forms the basis of Australia's system of democratic government.

* Lack of accountability. While governments in Australia have traditionally implemented policy in an open and accountable manner, it is now beyond dispute that multicultural policy implementation is neither accountable nor open to the public. The existing mechanisms designed to ensure accountability have failed to provide accurate information about multicultural policy in practice.

Because of the extension of the policy of multiculturalism to most areas of government activity, a growing proportion of government administration is now beyond detailed analysis and scrutiny. It is unclear whether funding is directed to ethnic leaders, or to organizations that democratically represent entire and diverse ethnic populations. In addition, multiculturalism has had an important impact on Australia's immigration program. According to the Former Minister for Finance, Senator Peter Walsh, Australia's immigration program during the late 1980s was dramatically expanded - primarily because of pressure on the Federal Government by ethnic leaders. By the late 1980s, immigration had imposed massive economic costs on Australia. High levels of immigration increased annual population growth to over 1.5 per cent, the highest in the developed world. According to Mr. Stephen Joske, an economist with the Australian Parliamentary Library, immigration increased demand for basic infrastructure - such as housing, hospitals, roads, and schooling. Because of Australia's low levels of domestic savings, investment capital for such infrastructure had to be imported from overseas, adding up to A$8.0 billion each year to Australia's current account deficit.17

By the early 1990s, Australia - with a population of only 17 million - had accumulated a foreign debt of over A$140 billion, equal to 40 percent of GDP and exceeding other major 'debtor' countries such as the former Soviet Union. A key cause of this debt 'blowout' was the high and unsustainable levels of immigration during the late 1980s.

'... the growing ethnic diversity of

society makes the quest for unifying

ideals and common consensus all the

more urgent during the 1990s.'

There are other social and economic costs created by mismanagement of Australia's immigra-tion program in the 1980s. For example, since the mid-1980s many health professionals have expressed concern about ineffective health screening of migrants for infectious diseases such as tuberculosis, hepatitis B and even leprosy. These concerns have consistently been ignored by the Federal Govern-ment, despite the fact that the additional social and economic costs to Australians of the introduction of infectious diseases could be substantial.

These concerns were again expressed in the book The Cost of Multiculturalism.18 Specifically it was claimed that migrants were not always tested for some diseases such as hepatitis B and that even for diseases tested, such as AIDS and tuberculosis (TB), testing was often ineffective. This was shown by the fact that in 1990 over 70 per cent of cases of TB in Australia were migrants. In addition, leading Australian health experts such as Professor Clem Boughton claimed that, in the mid- to late-1980s, some 10 percent of Asian migrants arriving in Australia each year carried the hepatitis B virus. Not surprisingly, sections of the multicultural lobby attempted the usual 'cover-up.' The Office of Multicultural Affairs - in response to this claim - affirmed that all migrants were screened for infectious diseases.19 However, the claim was finally confirmed as accurate in Federal Parliament by the Deputy Prime Minister, Mr. Brian Howe.20

* Social cohesion. The 1990s herald a new period in world history. As outlined by Arthur Schlesinger Jr., ethnic and racial conflict, rather than ideological conflict, is the most divisive and explosive issue of our times.21 On every continent ethnicity is breaking up nations, causing civil wars and social tensions. This raises the question how can multi-ethnic countries such as Australia respond to these changing circumstances?

Severe and deeply rooted economic difficulties currently facing Australia require all citizens to have a strong sense of nationality and shared common purpose. In addition, the growing ethnic diversity of society makes the quest for unifying ideals and common consensus all the more urgent during the 1990s. Multiculturalism does not attain such goals and only serves to divide countries into separate ethnic groups.

Countries which have implemented multi-cultural policies cannot afford to ignore the warning signs which suggest that multiculturalism only serves to increase ethnic and racial tensions. Multiculturalism also reduces international competitiveness vis-a-vis countries such as Japan, where one language is spoken in the workplace and businesses are highly adaptable and dynamic. Importantly, support for multiculturalism in other Western countries such as Canada has diminished significantly in recent months.


In Australia the policy of multiculturalism is more than just a description of ethnic diversity. It is a policy supported by substantial government spending and regulation of society, including the restriction of public debate. Over the last fifteen years there has been a systematic attempt by sections of the Federal and State Governments in Australia first to hide, then to distort, the real costs of multiculturalism.

While the precise magnitude of these costs is unknown they are quite clearly considerable, with direct costs likely to be on the order of A$7.5 billion, or 5 percent of GDP. [See box.]

In addition, there are indirect costs such as Australia's immigration program's being effectively controlled by the multicultural lobby. This led to a 'blowout' in the current account deficit of A$6 - 8 billion per year during the late 1980s, which in turn led to a rapid increase in Australia's foreign debt. Moreover, there is a growing body of evidence which suggests that the policy of multiculturalism is a major cause of Australia's relative economic decline and reduced international competitiveness. Multiculturalism increases the costs of government through higher spending and poor targeting of service provision. Multiculturalism, by downgrading the importance of English language skills in immigrant selection, has increased costs for commerce and industry, resulting in lower productivity and competitiveness.

Throughout the world, ethnic and racial conflict, rather than ideology, has become the explosive issue of the 1990s. Governments around the world are responding by abandoning multicultural policies and highlighting common and popular core values which unify people of different ethnic backgrounds. 


1 Betts, K. 1991, 'The Politics of Growth,' in Smith, J.W.(ed), Immigration, Population and Sustainable Environments The Limits to Australia's Growth, The Flinders University of South Australia, Bedford Park, Chapter 21.

2 Sestito, R. 1982, The Politics of Multiculturalism, The Centre for Independent Studies, St. Leonards, 1982.

3 Rimmer, S. 1988, Fiscal Anarchy The Public Funding of Multiculturalism Policy Paper No.15, Australian Institute for Public Policy, Perth.

4 Jupp, J. 1989, '...and Statistics,' Australian Society, March.

5 House of Representatives, Weekly Hansard, 12 November 1990.

6 Research School of Social Sciences 1988, 'Migrants - do employers discriminate?', Australian National University 'National Social Science Survey Report,' 1(2).

7 Office of Multicultural Affairs 1989, National Agenda for a Multicultural Australia, Australian Government Publishing Service, Canberra, July, p.39.

8 Strombeck and Preston 1990, The Cost of Low Levels of English Proficiency among Immigrants in the Work Force, Australian Government Publishing Service, Canberra, p.16.

9 Birrell, R. 1991, 'Immigration and the Recession,' Robert Birrell, Sociology Department, Monash University, Melbourne, June, p.4.

10 Rimmer, S. 1991a, 'The High Cost of Migration' The Bulletin, 28 May, p.78.

11 Rimmer, S. 1991b, The Cost of Multiculturalism, Belconnen, Australian Capital Territory.

12 Totaro, P. 1991, 'Face the Press' Special Broadcasting Service Television, 27 June.

13 Ruddock, P. 1991, 'The Cost of Multiculturalism,' Media Statement, 15 July.

14 Richardson, N. 1991, 'Experts Split Over Worth of Racial Mix,' The Weekend Australian, 22/23 June, p.9.

15 Office of Multicultural Affairs 1991, 'Mr. Rimmer's Claims About the Economics of Multicultural Australia,' Media Release, Canberra, July.

16 Ruddock, 1991, op.cit.

17 Joske, S. 1989, 'The Economics of Immigration Who Benefits?,' A Background Paper for the Legislative Research Service, Australian Parliamentary Library. Canberra.

18 Rimmer, 1991b, op.cit.

19 Office of Multicultural Affairs 1991, op.cit.

20 Howe, B. 1990, (Minister for Health, Housing and Community Services), 'Answer to Question 830 Tuberculosis,' House of Representatives, Weekly Hansard, Australian Government Publishing Service, Canberra, 20 August, pp. 114-115.

21 Schlesinger, A. Jr., 1991, 'The Cult of Ethnicity, Good and Bad,' Time, 8 July, p.14.