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Why Treasury migration forecasts matter, and why they’re unconscionably high

By Stephen Saunders - posted Thursday, 29 August 2019


By no means did the 2019 federal election arrest our radical immigration economy. The Coalition was set to crank it higher. Labor and Greens would have gone higher again.

In calendar year 2017, net overseas migration to Australia was nearly 242,000. The preliminary tally for 2018 climbs to 248,000.

Now the Treasury is 'assuming' net migration to top 270,000 in 2019 and 2020. Yet permanent migration is dropping by 30,000, to 160,000. This apparent contradiction is partly explained by the liberal use of bridging visas.

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The long haul is the biggest story. Once only since federation has Australia surpassed 270,000 in net migration. Before 2007, even 200,000 was unknown. How come the figures have gone so high? Why are they barely remarked? And should we stay the course.

High population growth is at the behest of 'GDP growth'

Technically, net migration is a mouthful. It's those arriving in Australia and staying (by whatever visa) for 12 months out of 16, less those (who are resident and) leave for 12/16.

This imperfect measure is the best gauge available for the ongoing 'mass' of overseas arrivals. Nowadays, the net student arrivals swamp the net permanent arrivals. Net student arrivals also outnumber the net arrivals of temp-workers plus visitors. But note, about half of each year's permanent-migrant tally is already onshore, on student or other visas.

In Treasury estimates, natural increase plus net migration equals population growth. Population is set to grow 1.7 per cent in 2019 and 2020, mostly from net migration.

These estimates appear as Appendix A 'parameters' in Budget paper no. 3. Australia's natural increase, births minus deaths, is fairly low and predictable. The cursory explanation in the appendix is unobjectionable, though some may query the projected rise in fertility.

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More problematic is the non-explanation of net migration. This setting has a signal effect on voters' lives and effectively underwrites our high population growth. The appendix merely notes that the population 'estimates' hinge on the net migration 'assumptions'.

In another sense, it's no real surprise, if the appendix is uncommunicative. As above, the three main parties are rusted on to mass migration. The Treasurer and Treasury are under no pressure to explain themselves to the public.

Sure, the Budget migration 'assumptions' are roughly related to more recent trends. Even then, they're higher than any actual outcome recorded ever since 2009. Why would Treasury vault the 2019 and 2020 assumptions another 20,000-30,000 above the large and unsustainable 2017 and 2018 outcomes? The Budget papers make no effort to clarify. Yet the answer can be in no doubt. It's at the behest of the GDP statistic.

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First published in this version by the Australian Population Research Institute, on 26 July 2019. The author wishes to acknowledge Bob Birrell for the original idea and for comments.



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About the Author

Stephen Saunders is a former APS public servant and consultant.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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