b'APRIL 2021 APRIL 20214. Contribution to government finances The Treasurys findings have been confirmed byGiven the importance of migrants to the governments independent research conducted by the Lowyfiscal position, it is unsurprising that one of the long-The economic contribution of migrants is not limitedThese conclusions have been echoed by a number ofInstitute and The Productivity Commission. As in thelived impact of the COVID-19 pandemic will be on the to their supply of labour. Migrants, like the rest of thegovernment studies into the contribution of migrants toIntergenerational Report and the Shaping the Nationgovernments budget position. While the immediate population, contribute to government revenue byAustralias economy. The 2015 Intergenerational Reportreport, the Lowy Institute find that migrants are a netneed to fight the pandemic and support the economy paying taxes and weigh on government expensesfinds that 88% of migrants in FY14 were under the age ofcontributor to the governments budget position, as awill lead to substantial budget deficits in the near term by adding to the demands on public amenities,40, compared to 54% of the population as a whole, andresult of their relatively high skill levels (which result in the Treasury estimates that the deficit will be 11% of increasing government spending requirements. Whilenotes that continued high levels of inward migration willhigher-than-average salaries) and their high labourGDP in 2020-21, falling back to 3% in 2023-24the loss there are a number of individual characteristics thathelp to offset the ageing of the local population. Andmarket participation rates; these two characteristicsof migration associated with the border closure will determine whether or not someone is a net contributorthe Treasurys 2018 report on the impact of migration ontogether mean that this group generates significantgenerate a longer term structural gap between revenue or consumer (health status, employment status, whatthe economy 9notes that amongst migrants who arrivedincome tax revenues, while their age (and in someand expenditure. With 1.1 million fewer people now services and social security payments they are entitledafter 1996 (when the focus on skilled migration began),cases eligibility) limit their consumption of governmentexpected to be resident in Australia, the population to etc), in general the focus of the migration programa disproportionate number (42%) have salaries in theservices and supports. will be smaller and older than previously expected. As on young highly skilled individuals means that migrantstop 30% of incomes. a result, under current and announced policies, the Treasury expect to still be running a deficit, of 1.6% of are net contributors to the governments budget. Taking one cohort, migrants that entered the countryGDP, in 2030-31 11 .The focus on young skilled workers, who participatebetween 1st July 2014 and 30 June 2015, a 2016 in the labour force and are typically relatively highlyDepartment of Home Affairs report estimates that:paid, increases the revenue contribution from migrants Temporary workers within this cohort will net contribute compared to the local population. In addition,$3.9bn to the governments balance over the course of temporary workers are often not eligible for a numbertheir visa. of government services and support payments, further Permanent skill stream workers will net contribute underpinning the net gain to the government. And$6.9bn over their liveswhile they are not primarily resident for work purposes, Permanent family stream migrants will net contribute international students are also an indirect source of$1.6bn over their livesrevenue, via their spending on education services and Humanitarian migrants will net draw down $2.7bnother living expenses that will (at least partially) beOverall, this cohort are expected to contribute $9.7bn to funded by income from abroad.governments fiscal position over the 50 years following their arrival in Australia, equal to $32,450 per migrant 10 .Under the case consistent with the Centre for Population projections, GDP growth averages 1.9% pa in the long run. In the low migration case this falls to just 1.3% pa.22 239 https://cdn.tspace.gov.au/uploads/sites/107/2018/04/Shaping-a-Nation.pdf 11 https://budget.gov.au/2020-21/content/overview.htm#one10 Estimates of net fiscal contribution of migrants taken from Section 7 of Shaping the Nation Treasury report (https://cdn.tspace. gov.au/uploads/sites/107/2018/04/Shaping-a-Nation.pdf), number of migrants in the relevant visa categories taken from Parliamentary Library (https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1617/Quick_Guides/MigrationStatistics)'