Australia will need to brace for a ‘concerning’ lack of migration, with as many as 220,000 arrivals set to go missing this year

Photo by Kyle Glenn on Unsplash

  • Australia is headed towards a migrant shortfall this year of at least 126,000 from what is required, the Prime Minister has revealed.
  • In total, government estimates say net migration will fall to just 34,000 this year.
  • With borders to remain closed for some time yet, the Australian economy may struggle to mount a serious recovery effort.

Having enjoyed the benefits of steady migration for decades, Australia faces what may be its first real shortage of migrants in recent history.

Having closed the country’s borders in an effort to contain the spread of COVID-19, Australia is facing a sharp fall in migration and there’s little it can do about it.

“We’re looking at net overseas migration, I think, falling to 34,000-odd next year,” Prime Minister Scott Morrison told the National Press Club on Tuesday. “When you think that – it was the great Professor McDonald who set a figure of between 160,000 and 210,000 as being what you need in this country to maintain a GDP-per-capita growth, then there’s obviously a big gap there.”

In other words, the country is at least 126,000 (and as many as 176,000) people short of where it needs to be for the economy to continue chugging along at typical pre-pandemic levels. To be clear, the size of the COVID-19 economic contraction in June means there may be growth, but that it may not necessarily return the economy to where it was before it started shrinking.

Then again, the shortfall may be even larger when you consider that net migration – which makes up more than 60% of the country’s population growth – has in recent years contributed closer to 250,000 per year. Like many developed economies, Australia doesn’t produce enough children to grow without it.

Whichever way you cut it, there’s no way around the fact we’re simply short hundreds of thousands of people to help grow the economy, be it from filling essential skills shortages, starting businesses, paying taxes, buying goods and driving an already slowing construction boom. On top of all that, they’re not going to be returning quickly.

“That’s a short-term gap, but it’s going to be one of the real impacts of this crisis because our borders aren’t opening up any time soon,” Morrison said.

Economists largely not expecting borders to really open until at least the middle of next year, and with only one real exception, the overall shortfall is set to expand.

“We’ll be working with the higher education sector, but I note 80% of the international students that come to Australia are here,” Morrison said.

The Prime Minister also repeated that a “cross-Tasman safe travel zone” to be set up with New Zealand is on its way allowing some small amount of tourism. However, with New Zealand’s population less than five million – and many of them already here – Kiwis are unable to make up for the rest of the world.

In fact, they may not even make be able to make up for the rest of Australia, which still remains tied up in knots over individual state restrictions.

“It may well be that Sydneysiders can fly to Auckland before they can fly to Perth, or even the Gold Coast, for that matter,” Morrison said.

In such a topsy turvy world of closed borders, the government may be hard-pressed to make up for a sudden lack of arrivals.

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