The Economic Imperative of Immigration and Why Australia is Number One

Australia’s Economic Need for Migration

It’s July. The market has been a bit shitty. It’s cold. It’s dark. We have re-discovered Melbourne’s winter. Too often we allow the miserable to take over. Not today! I’ll take my time getting there but will hopefully convince those who have the patience to read on. There is good reason to be optimistic.

In the mid-1980’s I can remember Mrs Kennedy, a softly spoken but nutty teacher at my school, ranting about an imminent threat to world peace. Fighter jets, bombs, fleets of navy ships, Armageddon was upon us. Thinking back, I have no idea which conflict she was alluding to; at the age of 16 I had less of an understanding about world politics than my kids today. And that’s saying something.

I’ve been contemplating this memory in recent times as I watch, read and listen to reports on global events. Each week the madness seemingly spreads to another region. With one of my sisters working for the International Red Cross out of Budapest, it all seems a bit too real. Her team are heavily engaged in finding new homes for the millions of displaced people forced across international borders. It is a hellish task.

Of course, we Aussies are a ‘world’ away, out of harms way. It is this fact I keep returning to. IF you were a person who had been persecuted, exiled and maltreated, where would you go? What are your options? Let’s review the choices.

Africa, China, other parts of Asia, the Middle East … I think we can strike these from the list. South America is battling economic and social unrest, Central America is a risk and our friends in the U.S. are making it clear, unexpected arrivals aren’t their thing. It would be fair to suggest eastern Europe has its hands full and countries surrounding the Mediterranean haven’t been too welcoming of late. Germany is a ‘no’, they are regretting their generosity of a few years ago and there aren’t many positive vibes emanating from France, either. England’s politics is a mess and the volume of illegal boats hitting their shores has become a cause for national consternation. Canada is a chance, but nine months of cold air makes it a tough choice, same too with the Nordic region. Beautiful New Zealand is a possibility, were it not for their battling economy and the unabated exit of Kiwis across the Tasman. Not a good advertisement.

So, this leaves our involuntary globetrotters with one option only. Us, Australia. By luck or good design it is a fact, we are a very attractive destination.

“By luck or good design it is a fact, we are a very attractive destination.”

While I know it isn’t everyone’s cup of tea, let me try to convince you why it makes sense for us to be welcoming.

Immigration has long been a cornerstone of Australia’s national identity and economic development. We face the obvious challenges of an ageing population and a rapidly evolving global economy. As noted in Jim Chalmer’s most recent Intergenerational Report, “ … Australians are living longer with more years in full health and more time using government-funded services. Increased longevity, alongside low fertility rates, means the population will continue to age over the next 40 years. The number of people aged 65 and over will more than double and the number aged 85 and over will more than triple. Population ageing will be an ongoing economic and fiscal challenge.” (page 10)

Immigration is not merely a social or political issue — it is an economic necessity. The continued inflow of skilled and unskilled migrants is essential to sustaining economic growth, addressing labour shortages, and fostering innovation.

“Immigration is not merely a social or political issue — it is an economic necessity.”

Immigration helps to counterbalance pressure on the healthcare system, pensions and the broader welfare state by introducing younger, working-age individuals into the population. These migrants contribute to the tax base, support public services and help to maintain a favourable dependency ratio between workers and retirees.

In the year ending June 2023, net overseas migration reached 528,000 people – well above the government’s forecast of 400,000. Over the past year, the net number has fallen but remains near historical highs. Growth over recent years has been largely driven by international students and skilled workers, both of whom play vital roles in the economy. The hard facts suggest international students contribute over $40 billion annually to the education sector and broader economy, while also helping to fill part-time roles in industries facing labour shortages.

Australia’s 2024–25 Migration Program reflects a strategic shift towards targeted migration that directly supports economic growth. It allocates 185,000 permanent places, with 70 per cent reserved for skilled migrants, including 44,000 employer-sponsored and 16,900 independent visas. ( immi.homeaffairs.gov.au – Migration Program Planning Levels ). Sectors such as healthcare, agriculture, and technology rely heavily on migrant labour to meet demand. Working holiday visa holders have become essential in agriculture and hospitality, particularly in regional areas.

Critics of immigration often cite concerns about infrastructure strain and social cohesion. While these remain valid considerations, they are not insurmountable. With appropriate planning and investment in housing, transport, and education, Australia can accommodate population growth while gaining the economic benefits.

If it can be successfully argued that the economic benefits of immigration outweigh the downside risks, then we need to be the number one destination. If this is where we are already ranked, let’s understand why and enhance our appeal.

First and foremost, Australia’s political and economic stability should be a significant enticement. Despite the bickering in Canberra, we are consistently ranked among the top countries for economic freedom and governance. We boast a robust democratic system, transparent institutions and a resilient economy. Over many decades Australia has demonstrated strong fiscal management and social support systems; for migrants fleeing regions plagued by corruption, conflict, or economic collapse, we represent a safe and predictable environment in which lives can be rebuilt.

“First and foremost, Australia’s political and economic stability should be a significant enticement.”

Add to this our geographic isolation, high living standards, strong education system, open spaces, limited congestion, easy lifestyle and plentiful housing choices …. of course we are a great place to be.

Let me try to tie it all together. Simply put, Australia is economically reliant on immigration and uniquely positioned as the top global destination for migrants. We are a beacon for the hopeful in an increasingly uncertain world. For individuals and families seeking a fresh start, Australia offers not just a new home, but a safe and exciting future. With the (almost) guarantee of strong arrivals for as far forward as we can see, more dwellings will be required – a godsend for our industry. Is this not something to get excited about and draw us out of our winter blues? It is for me.