b'APRIL 2021 APRIL 20211.4Permanent migrants It is worth noting that the permanent migration cap2. Migrations role in Australias economic historyThe skilled migration program is the main pathwaycovers applications from onshore (that is, those already for permanent residency in Australia, followed by theresident in Australia holding a temporary visa), such as family scheme. The skilled migration program targetinternational students or temporary workers. As such,The importance of migration in total population growthThe influx of migrants has driven activity in both applicants with skills that are in short supply in Australia;it is an overestimate of the number of new permanentmeans that these flows have also played a critical rolestates and has become self-reinforcing; strong jobs as in the case of temporary skilled workers, this groupresidents in Australia. In addition, we need to takein Australias economic development. The net inflow ofgrowth has attracted more economic migrants, are net contributors to both economic activity and to theaccount of departures of permanent residents andpeople into the economy has both direct and indirectfrom both overseas and other parts of Australia. The governments fiscal position.citizens, to fully capture the movement in the underlyingpositive effects on economic growth. These impactsimportance of migration as an immediate driver of resident population. Taking these factors into account,begin to be felt immediately and are long-lasting.activity is highlighted by international students, the For planning purposes, annual migration caps are putit is still the case that skilled migration is the largestPositive inward migration increases the demand forlargest category of overseas arrivals. Not only do in place. The cap has been set at 190,000 in the morecomponent of permanent arrivals, making up 50% ofgoods and services, which immediately feeds through tothese full fee-paying students bring in revenue for recent years though this was reduced to 160,000 innet arrivals, followed by family migration and thenemployment and GDP. Through these spillovers, enoughuniversities, once here, they spend on local goods FY20. However, this hasnt had any bearing on actualhumanitarian migration. Permanent net migration hasadditional activity is ultimately generated to employand services, require housing and access to public inflows, as the total number of processed applicants hasbroadly held stable for most of the recent past, addingthe local labour force; migrants are not a one-for-oneamenities and other services, generating revenue for fallen short of this cap since FY17, as shown below.around 73,000 persons to the resident population eachsubstitute for local workers. local retail, recreational activity and housing services. year, though family migration has fallen back slightly inFor example, a skilled temporary worker will enterTheir estimated contribution to GDP in 2019 was $38 Fig 6. Visas granted on the permanent migrationthe last two years. the country to take up a job. This directly increasesbillion (almost 2% of GDP) 1with $21.4 billion (or 57%) from spending on goods and services alone. Overall, scheme, FY05-20, Australia employment and the amount of output produced byinternational student revenues are estimated to have Persons granted permanent residency Fig 7.Permanent Arrivals:the business, which in turn creates an indirect boostsupported more than 240,000 local jobs in FY19200,000 Net Overseas Arrivals, FY05-19, Australia to activity through supply chains; other businessesalmost 2% of all jobs in the economy. Beyond this, the 180,000 Persons which supply the firm employing the migrant benefit.contribution of all migrants to economic activity and so 160,000 100,000 Furthermore, by living in a community the migrantgrowth can be seen in the GDP data. Over the last five 140,000 90,000 automatically increases spending in the area, throughyears (to FY19), Gross State Product in NSW and VIC 120,000 80,000 shopping, eating out, attending cultural events etc.combined has grown by an average of 3.1% per annum. 100,000 70,000 Overall, local workers (and indeed other migrants) are 80,000 60,000 employed in other roles in these areas; at an aggregateAcross the other states it increased by an average of 60,000 50,000 level the economy reaches a new, higher level of full1.8% per annum.40,000 40,00030,000 employment.The positive economic spillovers from migration are not 20,0000 20,000 limited to Australia. A recent PwC report estimates that 10,000 2.1The evidence for migration driving Londons 1.8 million (2017) workers generate 22% of the 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 economic growthcapitals output, with every 10 migrants employed in the Skilled Program Family Scheme Migration Cap FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 The relationship between migration, population growthcapital supporting an additional 4 jobs across the rest Source: BIS Oxford Economics/Department of Home Affairs Family Skilled Worker Humanitarian Permanent Visas and economic activity levels is clear in the historicalof the UK 2 . In general, the majority of the worlds most data. New South Wales and Victoria have accrued thedynamic cities/economic areas are net attractors of Source: BIS Oxford Economics/Haver Analytics majority of overseas migrants in recent years, with theirmigrants, with the new arrivals actively contributing to share increasing over time; the unprecedented influxthe economic success of the regions they move to. of international students combined with continued inflows of temporary workers and permanent residents has seen the two states attract 75% of all net overseas migration. The skilled migration program is the main pathway for permanent residency in Australia, followed by the family scheme.10 111 https://www.vu.edu.au/mitchell-institute/tertiary-education/international-students-make-up-more-than-30-of-population-in- some-australian-suburbs, Mitchell Institute, Date Accessed: 22-Dec-20202https://www.pwc.co.uk/services/legal/immigration/facing-factsthe-impact-of-migrants-on-londonits-workforce-an.html'