Australia’s vaunted immigration program will soon face serious tests
A political hurricane is coming. Immigration in Western democracies has become a frontline issue undermining public trust with the potential to ruin governments; witness the present crises in America, Britain and Germany. By superior judgment and good fortune, Australia has avoided the fate of these countries but our immigration program is heading towards a daunting moment of truth.
Sticking by the test of the national interest is the key to Australia’s immigration future, yet there is a problem: what constitutes the national interest is now heavily contested.
The immigration landscape is being transformed by contradictory forces.
Fertility in Australia is collapsing, down to 1.5 babies per women (the lowest fertility being in the excessively privileged ACT), a figure far below the 2.1 replacement rate that, combined with the demographic revolution of an ageing population, will drive the need for strong immigration for years. Our fertility rate was above three throughout the 1950s and into the early 1960s, pointing to a dramatic change across two generations, with vast consequences. Our population growth and labour force demands are even more dependent on migrants.
Yet strong immigration now intersects with a housing crisis, entrenched weakness on housing supply, steadily rising prices and an intergenerational fracture with no easy resolution. Immigration is neither the cause nor the major factor in the housing shortage but the housing factor fuels rising hostility towards immigration levels. This is part of Australia’s dilemma – how to manage population growth in our major cities, notably Sydney and Melbourne, where suffocating price, planning, infrastructure and inequity issues are diminishing the quality of life for many people.
Migrants have long been a source of economic and social strength for Australia. Yet immigration is now integral to our flawed economic policy with economists Ross Garnaut, Saul Eslake and Richard Holden, among others, explaining that GDP growth has been driven by sheer migration numbers as a substitute for productivity. Our recent productivity trend is the weakest for 60 years, so we have economic growth devoid of higher living standards or strong per capita income growth.
As a nation we are weak on the capital investment essential to raising productivity by choosing instead one of the highest migrant intakes in the OECD. Will this habit be broken? A nexus of high immigration and weak productivity won’t work for the Australian people, and will guarantee domestic aggravation.
Alarm about immigration, and Labor’s inability to control the intake, escalated after the inevitable surge in numbers post-pandemic. The reliable net overseas migration measure (arrivals minus departures) reveals extraordinary gyrations: after peaking at an annual 536,000 it fell to 446,000 in 2023-24. It is forecast to be 335,000 in 2024-25 and down to 260,000 in 2025-26.
The NOM is forecast to settle at 225,000 in 2026-27. That’s a further substantial reduction. Is it feasible? Can Labor deliver such a reduction? This figure is still high but broadly consistent with the NOM trend in the half dozen years before the pandemic.
As for the official immigration program, it is stabilised under Labor at 185,000 for the 2025-26 year, the same as the previous year. Labor has rebuffed pressures to reduce the program – with the Coalition at the election pledged to a sharp cut to 140,000. The message is manifest: Labor wants a strong immigration program; it will stand its ground; it believes this meets economic need and its political alignment with ethnic communities.
In short, Labor won’t be intimidated by the weekend protests variously opposed to immigration or calling for cuts in the program. Nor should it respond to such protests. But Labor is certain to face a far more difficult climate in which to navigate its ongoing ambitious immigration agenda. The economic, social and political drivers point to further public disillusionment with a high intake, sentiments only being accentuated by social media.
Western democracies are more fractured societies in the 2020s. The breakdown of shared values, domestic cultural polarisation and rising community frustration generate a profound atmospheric shift playing directly to immigration. Elites bring an astonishing arrogance to their outlook: they assume that tolerant liberal multicultural society is the natural destination point for human beings. That’s false – anybody with the slightest grasp of human history would know this.
Human beings are tribal – a truth totally foreign to political progressives. The pertinent recent warning came from American social psychologist Jonathan Haidt, who said “any nation that wants a multiethnic, tolerant, diverse, liberal society” will need “to work very hard to turn down tribal identities and inter-group conflicts”.
That is Australia’s challenge. The conundrum is arriving: large-scale immigration is likely to become more valuable for Western societies such as Australia yet simultaneously become more contentious and provoke more internal hostility. This is a different setting from the Hansonism of the 1990s.
The weekend demonstrations are an omen of further protests. Anthony Albanese is right to repudiate the platform given to neo-Nazis, point out that many who attended were “good people” and uphold the principle of social cohesion. But Labor has much to learn and, above all, it needs to get tougher with extremists of the left and right.
Public criticism of immigration policy is only going to intensify. Labor must better explain its policies, demonstrate its management of the intake, deliver its pledged reduction of the NOM – since failure on that front would trigger a backlash – and avoid equating fair criticism with racism.
Australia has an advantage over many other Western nations because it has resolved the issue of asylum-seekers arriving by boat. Border protection is now a bipartisan Australian stance, the upshot of the electoral crisis that haunted the Rudd-Gillard government and provoked Kevin Rudd’s huge reversal when he returned as PM in 2013.
At that time, Tony Burke became immigration minister and implemented the policy – no boat arrivals would get permanent settlement, they would be transferred to PNG or Nauru, and every previous Labor humanitarian virtue was abandoned. Burke delivered and boat arrivals were substantially reduced. Given his record, nobody should be surprised by Burke’s ruthlessness in finalising the transfer to Nauru of most of the NZYQ cohort who have no legal right to stay in Australia.
There are many elements to Australia’s historical immigration exceptionalism – skills-based entry, non-discrimination, post-settlement policies and insistence on legal entry.
The sustained size of our intake over many decades suggests Australia’s national interest approach to immigration has been almost unrivalled among Western nations.
But there is a related dilemma. For two years the principles of Australian multiculturalism have been trashed in pro-Palestinian demonstrations across our capital cities and relentless attacks on Jewish people, their synagogues and schools, necessitating permanent security protection that violates our multicultural claims.
Many Palestinians, and others, have properly exercised their right to protest. But many others fly the flags of terrorist organisations, back terrorist states, demand the elimination of Israel, and inject Middle East grievances into the heart of Australian politics. This is a frontal assault on our democratic values and our once-championed multicultural principles.
Yet the response of our multicultural champions, the Labor government and progressive leaders has been weak and compromised – and that comes with consequences. You cannot quarantine the abuse of our multicultural principles. You cannot turn a blind eye to violations by one section of the community.
At some point extremists of the right were going to mobilise, feel emboldened and, having seen the promotion of hatred with impunity by anti-Israeli and left extremists, decide it was time to unleash their own brand of hatred. Australia needs tougher laws and their enforcement.
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When it comes to immigration, Australia must preserve its exceptionalism. Our successful immigration history is built, above all, on one central idea – an intake that advances the national interest – and whenever Australian governments fail this test, they risk electoral revolt.