“Australia’s entire economy is based on immigration,” says Liz Allen, a demographer at the Australian National University.
Migration is the major driver behind Australia’s population growth, which in turn has driven economic growth. The dramatically reduced numbers of international students coming to Australia has already hit the higher education sector. But Allen says that’s just the tip of the iceberg.
“Migrants contribute to demand and supply sides of the economy and bolster the socioeconomic wellbeing of this nation in ways many don’t realise,” she says. The food we eat, homes, towns, hospitals all rely on migrants, and businesses depend on them.
“Without migrants, Australia’s future feels less certain, because the grim reality is that the economy needs the inputs of migrants to ensure our standard of living doesn’t decline,” she says.
Chief economist for the Australia Institute, Richard Denniss, says, “Slowing population growth will lead to slower economic growth. Full stop. No debate about that at all...”
Abul Rizvi, a former deputy secretary of the immigration department, agrees that migration and the economy normally “follow each other very closely”, though “which drives which is a chicken and egg question”. Slowing the population’s ageing improves per capita economic growth, he says. Australia’s migration program targets people from about 20 to 35, and because of their relative youth, migrants will have disproportionately more children in the future. Migration has made Australia among the youngest developed nations on the planet, with a median age of 37. That means that a fall in migration will decrease the birth rate and accelerate the Australian population’s ageing, he says.
“Those are just almost givens now,” Rizvi says. “That will hurt us.”
Unemployment is now predicted to exceed 9% by Christmas. Some suggest this means we should be slow to welcome migrants back, lest they take jobs Australians could fill. Nor is it the criticism of the right-wing. Labor’s home affairs spokeswoman, Kristina Keneally, argues Australia should “shift away from its increasing reliance on a cheap supply of overseas, temporary labour that undercuts wages for Australian workers and takes jobs Australians could do.”
Rizvi and Allen explained that migrants don’t tend to take jobs Australians would otherwise do, because they’re either bringing skills Australians lack or doing low-skilled jobs that Australians don’t want to do.
“Australia’s migration scheme is demand-driven, meaning migrants aren’t stealing locals’ jobs,” Allen says. “Migrants do more than fill jobs locals can’t or won’t do. Migrants help build consumer sentiment and so have a bit of a turbocharge impact on the economy.”
“We have a chronic undersupply of housing generally, which is one of the reasons Australian housing is so expensive,” says Michael Fotheringham, the executive director of the Australian Housing and Urban Research Institute. Because the construction sector generally keeps pace with a growing population and demand for residential construction, the fall in migration will leave that sector with spare capacity, Fotheringham says and that could lead to unemployment and underemployment. Fotheringham suggests the construction of social housing as a solution that would help both the construction sector and those who are struggling to afford accommodation.