Australia added 518,100 people through net migration in the 2022-23 financial year, according to new data from the Australian Bureau of Statistics (ABS). This is a record high by a very wide margin. The strain is obvious to all, in the rental crisis and infrastructure crowding.
The Albanese government knows this is both unsustainable and deeply unpopular with voters. Hence, the headlines announcing the government’s new Migration Strategy last week claimed they would bring migration down to ‘sustainable’ levels.
Looking beyond the hype, there’s very little in the announced measures that will ensure lower immigration. Changes focus more on the quality of migrants rather than the quantity, but there are still no caps on the number of international students or temporary workers.
Nevertheless, immigration is likely to come down next year. The government is hoping to take the credit for this, but it’s really due to the pandemic aberration settling down. Lots of temporary migrants left in 2020, so they weren’t here to leave in 2021 and 2022. As a result, the net intake (arrivals minus departures) was much higher even though the total arrivals weren’t much above pre-Covid levels.
The government expects net migration to settle back to near the pre-Covid level, around 235,000 annually. This seems like wishful thinking, since a number of the changes they have made increase the inflow and length of stay. These range from a free trade agreement with India that exempts Indians from some of the new changes, to easier pathways to citizenship for New Zealanders and more permanent visas for low-skilled workers in agriculture and aged care.
So don’t hold your breath waiting for immigration to return to ‘sustainable levels’. To achieve that goal, the government needs to be much more assertive.
What would a sustainable level of immigration be? The main criterion for sustainability is that migration should be low enough to allow Australia’s population to stop growing. Nothing can grow for ever on a finite resource base, and the more we grow from now, the more we lose in terms of environmental health and quality of life.
To stop growing, each generation needs to be no bigger than the last. Happily, Australians choose to have relatively small families, averaging below the ‘replacement level’ of roughly 2.1 children per woman. This leaves a little room for net migration, to ‘top up’ the next generation.
This chart shows how the sustainable level of net overseas migration (NOM) depends on total fertility rate (average number of children women bear in their lifetime). The calculation assumes Australia’s 2020 life expectancy (83.2 years) and current population (around 26.8 million).
Last year, fertility fell to 1.58, the lowest recorded in Australia. At this fertility rate, sustainable immigration would be 77,700.
Fertility has varied quite widely this century, with the ‘baby bonus’ contributing to a sudden increase from 1.75 in 2003 to 1.98 in 2008. Since then, it has gradually declined. A rebound to 1.8 children per woman would bring sustainable immigration down to 43,500 annually.
If fertility stays below 1.7, sustainability would be found in the range of 60,000–80,000 NOM. The population wouldn’t stop growing straight away: births still exceeded deaths by 106,000 last year. But that number is gradually dropping as the baby-boomer generation reaches the end of life.
It follows that anything higher than 80,000 is not sustainable. A responsible immigration policy should limit permanent visas below this level, and ensure the pool of temporary migrants stabilises also.
These levels were fairly typical during the post-WWII decades, when Australia was still seen as an ‘immigration nation’. They are far from being a closed-door policy. They only seem low in comparison to the astronomically high immigration we have been enduring over the past two decades.
How could the economy endure such low immigration?
The media would have you believe that low immigration and an end to population growth would be an economic catastrophe. However, the countries in eastern Europe and east Asia that already have shrinking populations are doing much better than Australia on most economic and wellbeing trends.
What skills shortages we have are mostly caused by the surge in population increasing demand for certain services, particularly in the construction industry. Other claimed labour shortages stem from decades of migrant labour exploitation meaning employers are unaccustomed to paying a competitive wage. The proliferation of low-wage work in Australia, to absorb the many migrants whose skills are not really in demand, has contributed to sluggish productivity growth.
A tight labour market is a very good thing. The labour market should ensure that everyone is put to the best possible use and receives the best possible remuneration. To achieve this, there must be unfilled jobs so that employers bid up the offers to job-seekers and invest in equipment to improve productivity of their workers.
This is the opposite of the employer-centric view, where we need a “reserve army of unemployed labour” as Karl Marx put it, to bid down wages and ensure maximum profits. It should be obvious by now that the balance has tipped too far in favour of employers, with the average worker going backwards against the cost of living while profits reach new heights. No wonder the Business Council invests so heavily in promoting high immigration.
Many people fear that population ageing will mean insufficient workers, unless we maintain high immigration. This is a sticky myth, also promoted by big business. High immigration is a very inefficient means of addressing ageing: a lot of population growth is needed to achieve a small reduction in the proportion of retirees. The public infrastructure needed to accommodate this growth costs more than the pensions and aged-care avoided. With the difference, we could restore university funding to compensate them for lower international student numbers.
In the end, sustainability is not negotiable. It is just a question of when we decide that further growth is not in our interests. The more we grow, the more we lose, in environmental health and public amenity, in access to decent housing and an egalitarian society. But incremental change lulls us in a classic example of the boiling frog syndrome.
With this year’s sudden explosion of immigration bringing negative consequences into focus, now is a great time to reconsider the settings. Let’s not be deceived by political spin about ‘sustainable immigration’.
Jane O'Sullivan
Dr. Jane O’Sullivan is an Honorary Senior Research Fellow at the University of Queensland, an Executive member of Sustainable Population Australia, and a co-convenor of The Overpopulation Project. She has published widely on population projections, the threats posed by population growth to food security, economic development and ecological sustainability, and the effectiveness of measures available to limit population growth.
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