Australia has an open-borders arrangement with New Zealand and, despite what they say, we are just not being over-run by Kiwis. They don’t even share our cultural values — they play rugby union. It is simply ridiculous to imagine that we will be “over-run” by anyone else.

It is just not credible to label the current hysteria as being an “immigration debate”. The Rudd government’s Indonesia policy is a total shambles and but for the magnitude of the human tragedy and loss of life the sight of Rudd being hoist on the petard of hypocrisy would be one of the all-time great moments of schadenfreude.

Refugee policy stupidity is bipartisan; the only party that has had a consistent and sensible approach to illegal immigrants and refugees has been the Greens. Both the ALP and the Coalition has tried to gain the high moral ground while peddling xenophobia as viable policy.

Australia has a deep and ugly xenophobia running through its psyche. This manifests itself in many ways: the Foreign Investment Review Board operates to vet foreign investment, AQIS protects Australia from foreign agriculture and the phobia towards boat arrivals borders on racism. This all fits into the anti-foreign bias that Bryan Caplan talks about in his book The myth of the rational voter: Why democracies choose bad policies. People tend to systematically underestimate the benefits of dealing with foreigners.

This phenomenon goes all the way back to the White Australia Policy and should be seen in the same light. There are many more visa over stayers in Australia than there are boat people, yet it is the latter who cause all the kerfuffle. “Illegals” are more likely to have arrived in Australia through Sydney airport from Europe than by boat. There is almost no discussion of those people — after all, they are probably good for tourism and picking fruit.

Accepting more refugees and boat people into the country is one of the greatest contributions Australia can make to improving the world around us and enhancing our own living standards. Rather than accepting people because we have an “obligation” under international law, why not accept people because we have an opportunity to improve living standards?

Most of our foreign aid dollar is probably wasted. Remittances back home are going to do a lot more for the region (and even beyond) than tax-dollars will ever do. Allowing more people into Australia to work and improve their lives will have massive spillovers on the lives of their families and friends back home. Why let Canberra waste our tax-dollars on foreign aid, when people can and want to help themselves?

Perhaps the greatest furphy is the argument about the welfare state. The notion that refugees come here simply because they want to get on to welfare is often heard. Milton Friedman once argued that an open borders policy was inconsistent with a welfare state. Perhaps. But why define ourselves by welfare; what about the rule of law, freedom of contract, freedom from persecution and so on? Our welfare policies have not made us comfortable, rich and prosperous, rather our work-ethic and our “propensity to truck, barter, and exchange one thing for another”.

We also hear that terrorists may enter Australia via boat arrivals. To be sure that is true, by definition. Many refugees will have opposed their own government and lost; these people are almost always labelled “terrorist”. Had they won, these “freedom fighters” would then not be refugees. To the extent these people are a menace to Australia that is a matter for the police and criminal justice system.

Fundamentally, the acceptance of refugees is good for Australia. How often do we hear “We should only take in people who would benefit Australia?” This simply begs the question, how does accepting people into the country who want to work and make a better life for themselves and their children not benefit Australia?

The great Austrian economists Ludwig von Mises described the market economy as cooperation under the division of labour. By having more people in Australia there are more people to cooperate with, more people to trade with and more people to grow the market. As our wealth and economy grows there is more money for the finer things in life.

Of course, we might hear that immigration brings unemployment and infrastructure stress. But the unemployment argument rests on the lump of labour fallacy. There isn’t a finite amount of work that needs to be shared out amongst more and more people. The infrastructure argument is just lazy government making excuses for their lack of service provision. They levy the tax every year, they can provide the services.

The bottom line is this; rather than trying to keep people out, we should be looking to bring people in. The need for some or other orderly process (we will always have customs) is being hijacked by an anti-migrant and anti-refugee debate. It is also being morphed into an anti-Muslim debate. There needs to be leadership on this issue. All worthwhile reforms are difficult and often require leadership in changing public attitudes.

Sinclair Davidson is professor in the School of Economics, Finance and Marketing at RMIT University and senior fellow at the Institute of Public Affairs.