Migration ban a challenge to growth

One of the major economic casualties in Australia of the Covid-19 outbreak has been immigration.

With international arrivals slowing to a trickle, the door has effectively shut on potential immigrants seeking to work or study in Australia.

That’s a major consequence for a country that relies heavily on a rising population to fuel economic growth.

Figures from the Australian Bureau of Statistics, released in late April, reveal that in 2019-20, the nation recorded a net migration (immigrants less emigrants) of more than 194,000 people.

Immigration has been a powerful economic growth factor in the past decade, with annual net migration rates above 180,000 people since 2007. Indeed, in 2008-09 Australia recorded a net migration of almost 300,000 people.

The previous low point for net migration was 30,000 people in 1992-93, as the nation was emerging after a period of negative economic growth.

In 2020-21, the first full year of the global Covid-19 pandemic, net migration will be negligible in Australia, where borders continue to be tightly restricted.

Australia’s international education sector is a high-profile victim of the Covid-19 border closures.

But skilled migration is another casualty.

Australia relies on importing qualified migrants to fill vacancies in professional services, the technology sector, health, education and a range of industry growth sectors.

A current Federal parliamentary inquiry into Australia’s skilled migration program underlines the rupture to the domestic economy and workforce.

An interim report of the Joint Standing Committee on Migration, tabled in March, said that as a result of Covid-19, more than 500,000 temporary visa holders had left Australia, resulting in significant skills shortages.

Without the return of skilled migration, the report said, Australia’s economic recovery would be severely hampered and it would be harder to create more jobs for Australians.

As the report noted:

“Skilled migrants are not replacing Australian graduates nor are they replacing unskilled unemployed Australians, but they fill the missing middle of our economy including people who can train Australians and whose presence in a business can create more jobs for Australians.”

As international movement has plummeted during Covid-19, Australia has been reminded of the significance of its foreign-born population.

According to the ABS report released last month, Australia has 7.6 million migrants, or almost 30 per cent of its total population of more than 25 million.

In 2019-20, England (UK), India, China, New Zealand and The Philippines headed the countries supplying the most migrants.

The migrant component has been steadily rising in recent years, approaching the previous record of 31.7 per cent, set in the pre-Federation year of 1891.

By contrast, the lowest point of migrant population was in 1947 – 9.8 per cent, just before the major post-War immigration boom.

Post-Covid 19, as in the post War years, another rush of immigration might be needed if Australia is to fill its skills shortages in critical industries and pursue sustainable economic growth.

Gavin Clancy is a Senior Consultant for Lunik