25 per cent drop in immigration bad for the economy

29 September 2010

The big fall in annual net overseas migration, revealed today, from 320,000 to 241,000 will be bad for the economy, according to the Urban Taskforce. Todays Australian Bureau of Statistics figures show that Australia’s population reached 22.3 million by the end of March 2010, with an increase of 403,000 people over the year.

The population growth rate was 1.8 per cent nationwide, down from 2.2 per cent in March 2009.


The Urban Taskforces chief executive, Aaron Gadiel, said strong overseas migration has helped buttress the Australian economy during the global financial crisis.


Strong immigration has been a key part of Australias economic prosperity, Mr Gadiel said.


Immigrants, particularly skilled immigrants, play a vital role in boosting our economy.


They contribute as workers in their own right and help do jobs that cant be filled by Australian businesses.


Theyre also consumers.


Often one of the first things they do is buy a home and furnish it – stimulating the construction, retail, distribution and manufacturing sectors.


Mr Gadiel said that todays figures showed a serious fall-off in ˜net overseas migration.


Net overseas migration has been increasing in the past three years because of a jump in the number of long-term visitors, Mr Gadiel said.


The recent surge has been driven by skilled workers under ˜temporary business (long stay) category (457 visas) and international tertiary education students.


Net overseas migration has increasingly been made up of temporary, rather than permanent immigrants.”


The maximum duration of 457 visas is just four years and overseas students will generally finish their studies within four to five years.


These visa holders have begun to return home, and they arent being replaced by new students or workers.


The 12 months to March 2010 saw a 9 per cent increase in overseas departures, following two years of static overseas departures.


Weve just seen the biggest surge in long-term departures since 2001.


On the other hand, were seeing less overseas students coming in and a fall-off in 457 visas, resulting in an 11 per cent drop in overseas arrivals in the 12 months to March 2010, following increases of 12 per cent and 11 per cent in 2009 and 2008 respectively.


Were concerned that government may passively accept this fall-off in Australias net overseas migration, following the hurly-burly of the recent election campaign.


A sustainable population policy should not mean reduced immigration it just requires bigger, smarter investment in urban infrastructure.


Mr Gadiel said that community concerns about population growth did not match-up with where the growth was actually occurring.


In the recent election campaign we heard a lot about population growth in NSW, yet that state sits alongside Tasmania and South Australia with the lowest levels of population increase.


Population growth is lowest in Tasmania (0.9 per cent), South Australia (1.3 per cent) and NSW (1.6 per cent).


Population growth was highest in Western Australia (2.3 per cent), Queensland (2.2 per cent) and Victoria (2 per cent).


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.


An illustrative graph is in the PDF below.


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