Migration and Australia’s population growth has been a hot topic all year. It was a big issue on the agenda for the Prime Minister, Premiers and Chief Ministers a fortnight ago when they met in Adelaide, and I’m sure it will raise its head again in the run up to the federal election early next year.
These are serious issues that will impact our future, so we need a serious conversation. Our country’s leaders were told by Professor Peter McDonald, a population expert, that the evidence supports permanent migration at the current level of 190,000 people per year.
Economic modelling done by the Productivity Commission shows that our economy per head of population would be 7 per cent higher in 2060 if we maintained the current migration settings compared to a situation where as many people left the country as arrived. Without migration, employment for people under 55 years olds would have fallen by 143,000 between 2011 and 2016; instead it grew by 452,000.
Putting migration on hold, or allowing states and territories to set numbers based on the pace of infrastructure roll out would deny these economic benefits. It would let the tail wag the dog.
Political leaders would never suggest that businesses cut back on investing, on growing, on giving more people jobs because our roads, trains and ports are over-burdened.
What they would do is invest in more infrastructure to allow our economy to grow and Australia’s standard of living to rise.
This is not to say that states and territories do not have an important role in our migration and population policies. In a strong statement about the benefits of migration and population released on the eve of the Prime Minister’s meeting with state and territory leaders, we called on them to agree on a set of population principles that would become the foundation of population policies and planning.
The principles would recognise that population growth delivers economic benefits for all Australians and planning and policy needs to be coordinated across governments. We need to celebrate the comparative advantage that migration delivers for Australia.
This advantage comes not just through the economic benefits and the skills that migrants bring. It comes from our emphasis on younger, skilled migrants, which changes the age profile and productivity of our workforce in ways that give us an advantage over many other countries.
Due to our approach to migration, we are soon going to have one of the youngest workforces of any advanced economy in the world. With public spending on health for the growing number of people over 75 years old rising by more than 19 times per person in the last few decades, we need a workforce that pays enough tax to cover health and pension costs.
The independent and respected Productivity Commission in its 2016 report supported this conclusion saying: “The continuation of an immigration system that is oriented towards younger working-age individuals — particularly in the prime working and family formation ages of 20 to 40 years — can boost the proportion of the population in the workforce and, thereby, provide a ‘demographic dividend’ to the Australian economy and reduce the impact of population ageing.”
The commission’s modelling showed that with zero net migration, the proportion of the population aged 65 years and over could increase from around 15 per cent in 2014 to around 30 per cent by 2060.
This compares with a continuation of migration with a relatively young age profile projected to limit the increase in the share of the population aged 65 years and over to about 25 per cent over the same period.
With the benefit of this evidence, we can be confident in supporting migration. We have choices about the country we want to be and our place in the world.
We can shrink into ourselves, or be confident and outward looking.
Australia will be a bigger country; we need to be a strong and competitive country, and we need to continue to be a country that we are proud of, which offers the lifestyles Australians desire and provides jobs and opportunities for our families and future generations.
It has made us richer, and not just in economic terms.
Migration is also a story of people – individuals, families, entrepreneurs and investors who have each made a valuable contribution to the country they have chosen to be their home.
In a world where countries have to work harder and smarter to stay competitive and create opportunities for their people, we should think carefully before we give away our comparative advantage.
Migration works for all of us.
James Pearson is chief executive of the Australian Chamber of Commerce and Industry. The chamber’s policy on migration and population is available online at bit.ly/Migrationworksforallofus
