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The path back for Australia's migration program

In a speech delivered to the National Press Club on Tuesday May 4 2021, CEDA Senior Economist Gabriela D'Souza considers how the government can safely increase our migration intake to drive economic recovery after COVID-19.

Good afternoon everyone, and thank you to the National Press Club for inviting me to make these remarks. My name iGabriela D’Souza and I’m a Senior Economist at the Committee for Economic Development of Australia (CEDA). For the last few years, my area of research has been immigration. The last year-and-a-half has raised some big questions for the future of migration policy. And in my talk today, I will discuss some of these issues. 

 

There’s no question about it - migration has been key to Australia’s economic growth. The promise of Australia and the fair go is evidenced by the success of the many previous waves of migration.   

 

The Federal Budget is an important time for migration policy as it sets the size and composition of the migration program. It is informed by public consultations with state and territory governments, business and community groups and the wider public. 

 

This years budget will contain key information about what the Government’s migration targets are and how it expects to meet these for the permanent skilled and the family intake. This is particularly important given the giant elephant in the room: how are we going to keep migration going to meet our targets when our borders are closed? 

 

This challenge will require our governments, at all levels, to think more deeply and creatively about how to solve this problem.   

 

Population growth is forecast to reach 0.6 per cent in 2020-21, the lowest in a century. We’ve also seen net overseas migration go negative. Before I delve into some of the numbers it is worth going over and reiterating some facts about migration. 

 

Migrants supply vital skills into our labour market. A cursory read of any inquiry into migration will tell stories of just how crucial migration has been to the success of businesses, from the hospitality sector to companies like Cochlear and CSL. Many of the advancements we have made in Australia would not have come without the skills and experience of the migrants we welcome to our shores. 

 

Some have argued that migration takes away the jobs of local workers and that, particularly following recovery from a recession, migration must be scaled back. But study after study across different countries has shown this to be untrue. In research I conducted in 2019 for CEDA, I found that recent migrants had not harmed the employment outcomes of local workers. To the contrary, in some cases, an influx of migrants was associated with an increase in the labour force participation and wages of local workers. 

 

In addition to contributing to Australia’s economic activity, migrants also contribute to the fiscal balances of governments through tax revenues. Migrants, in short, are good for the budget, they’re younger and work for longer, and they pay into the tax system way more than they receive in benefits. Most recent analysis on this question reveals permanent skilled migrants are a net benefit to the budget, with an annual fiscal revenue of $9.7 billion over their lifetime. This is even more so the case for temporary migrants, who are ineligible for most government payments 

 

One area of our economy that’s been deeply affected by closed borders is our international education sector. I sit on the board of the International Education Association of Australia (IEAA)so know firsthand that the sector has suffered greatly from not being able to welcome new international students. International education helps support many ancillary industries including tourism, accommodation and hospitality sectors.  

 

The sector has also been left out of the Government’s JobKeeper program, and has seen onshore student numbers dwindle from a peak of 630,00 in September 2019 to 377,000 in March this year, a drop of 40 per cent. 

 

It was once a great source of pride for our nation that we were able to attract the brightest students to our foremost educational institutions, but more recently this seems to have been forgotten, especially when it comes to the Government’s financial supports.  

 

We all remember the heartbreaking videos and photos of the lines of international students waiting for food vouchers from the city of Melbourne. 

Even the Victorian Government’s Emergency Support fund, which was meant to give short emergency relief to students, ran out of money within weeks of being announced.  

 

The Budget outlines the nation’s priorities for the next few years. I will be watching very closely to see how the Government responds to the immense migration challenges before it.  

 

Safely resuming migration 

 

It’s sometimes easy to forget just how much our world has changed – everything here seems quite normal. But at the peak of travel before COVID-19, Australia was accepting almost two million travellers a month. Our current capacity is 27,000 a month, and that’s on a good month, when we haven’t had a snap border shutdown.  

 

The key question that confronts this Government is how we return migration in a way that lowers the COVID-related health impact on Australians in Australia. There is no question about it – our quarantine system needs a rethink.  

 

  • We need the different levels of government to work with each other. It’s become too easy for both state and federal governments to blame each other rather than come up with solutions that will help ease the situation. 

  • Purpose-built quarantine seems like our best bet for keeping Australia at some kind of COVID normal. 

  • We are also going to have to accept that there is some risk in welcoming back returning Australians and migrants. This is the new normal. Steps should and must be taken to ensure that cases that occur in quarantine will be prevented from spreading into the community. The Government should also look to other models, including allowing returning travellers to quarantine at home where possible. 

  • Leaders should show some restraint in blaming the failures of hotel quarantine on returning travellers and migrants.  

 

Continuing to keep our borders closed is a serious threat to our commitment to globalism, particularly as other countries vaccinate their populations and start to open up their borders and welcome migrants. 

 

We’ve all watched the situation unfold in India with horror and some fear. What if it breaches our shores? What if we find ourselves in a situation like that? In June of 2020, my dad died in India. It wasn’t from COVID. He went peacefully and suddenly, and left a huge void for my family and me. I couldn’t go back to be there to lay him to rest, or to support my mum and brother in the aftermath. This was in part due to the restrictions our governments put in place to stop citizens and permanent residency holders from leaving the country. No other advanced Western country has put in place such measures.  

 

For many of us, our lives are not completely in Australia. Our loved ones live elsewhere, and we yearn to see them again. I was privileged to see my family almost every year before COVID hit. I even got one last holiday with them in January 2020.  

 

I hope that when the Government makes its decisions it realises the sacrifices migrants and people who live parts of their lives overseas are being asked to make. And I hope that realisation – that border closures affect each of us differently – injects some urgency into our quarantine and vaccination policy in the months to come. 


Read CEDA's latest research on optimising Australia's permanent migration program here

About the authors
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Gabriela D'Souza

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Gabriela D’Souza joined CEDA as Senior Economist in 2018 with eight years of experience in public policy. She has worked at some of Australia's most well-known and respected public policy think tanks and economics research centres. She has conducted research on a wide range of public policy issues including education, immigration, multidimensional disadvantage, and area-based measures of exclusion. Gabriela has a master’s degree in economics from Monash University and is an affiliate of Monash University’s Department of Business Statistics and Econometrics.
 

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