The migration boom may be over, but political heat on Labor is rising
Labor should know by now that getting the numbers down is necessary, but not sufficient, to appease a public worried about the cost of housing, congestion and stagnant living standards.
Fronting a press conference with Anthony Albanese and Chris Bowen to announce Labor’s 2035 emission reduction targets, Jim Chalmers seized the moment. After dispensing the artificial trillions and billions of Treasury’s modelling on net zero, the Treasurer finished with hard facts. Annual net overseas migration “has now fallen for six consecutive quarters”, he declared, before stepping from the lectern for the next speaker.
According to the Australian Bureau of Statistics, in the year to the end of March NOM was 315,900, a 43 per cent fall from the 555,800 peak in September 2023. Chalmers appeared hopeful that, finally, his department’s budget forecasts on people flows for last financial year were likely to be in the ballpark when the ABS publishes final figures in December.
While the post-pandemic surge of foreigners into the country may have peaked two years ago, community unease about its management by the Albanese government is rising. Labor should know by now that getting the numbers down is necessary, but not sufficient, to appease a public worried about the cost of housing, congestion and stagnant living standards.
Voter research shows there’s growing concern about immigration and social cohesion, although sentiment is not yet in the red zone that’s associated with make-or-break political issues such as living costs, home affordability and crime.
There’s a sense the government has lost control of the narrative and demand-driven temporary entrants who dominate the inflow.
In the wake of August’s anti-immigration rallies, SEC Newgate’s latest Mood of the Nation survey shows concerns over immigration and population have increased significantly, with unprompted mentions more than doubling to 16 per cent in September from 7 per cent in July. (That is, in response to the question: “What are the main issues facing Australians that are most important to you right now – the specific cares, concerns, or priorities that you typically talk about with friends or family?”)
The population is now 27.5 million, just a touch above where it was expected to be based on the 10-year growth trend before the pandemic. In the two-year Covid era, when the border was closed, the population grew by 285,000, almost entirely due to natural increase (births less deaths).
In the three years of recovery from the worst of the health and economic crisis, our population grew by just over 1.6 million, 1.3 million due to NOM. Since early 2022, foreign students, workers and backpackers have rushed into the country to fill what were empty lecture halls and vacancies in food courts and the care sector; those already here extended their visas or hopped on to other ones that allowed work rights.
Arrival halls were full, but the departure gates were heaving with liberated Australians heading for holidays in Europe and Asia, rather than young foreigners leaving for good. NOM climbed to record raw numbers and at its peak was adding 2 per cent to the population a year, akin to the “populate or perish” migrant boom in the 1950s.
This was always going to happen; whoever won the 2022 election would be holding the parcel of exploding migration numbers, housing stress and rising inflation. The pandemic was the prime time to fix the visa system and plan for reopening, but the moment was squandered. NOM had averaged an annual 220,000 in the crisis-free decade before Covid and still we weren’t coping with residential demand and public “big builds”.
Had Scott Morrison prevailed, the Coalition might, and it’s a big “might”, have mopped up some of its Covid visa mess and put the handbrake on processing the backlog of applications to smooth the surge. That would have left export dollars on the table for education providers and businesses scrambling to fill vacancies, not only for skilled workers but the jobs Aussie kids won’t do as demand rises for hands in aged care and food delivery. Undeniably, Albanese inherited a broken visa system. Yet acting as if public angst over migration is just a short-term political issue to gently massage while fiddling around the edges of policy you’ve been shown how to improve is foolhardy. Just don’t mention the NOM. Look over there, freebies!
Such timidity leaves the field open to entry-level hellraisers and amateur number-crunchers crying “mass migration” and scapegoating of recent arrivals. The challenges of dealing with asylum-seekers in Britain and Europe, and Donald Trump’s overreach in dispatching Immigration and Customs Enforcement officers on the streets of big US cities bear no comparison for conditions on our home soil.
With one exception. There are now 100,000 foreigners here who have been denied protection visas but have not been deported; another 26,715 are awaiting a decision on their refugee status.
On average, only one in six asylum claims is approved.
It’s a scam. According to Australian National University professor Alan Gamlen, who runs its migration hub, while the previous Coalition government had been tough on boat turnbacks, it quietly dismantled Australia’s visa compliance capabilities.
“This allowed a surge of copy-paste applications, which have overwhelmed the asylum system,” says Gamlen. “Unlike boat arrivals, few of these applicants have been recognised as genuine refugees.”
Labor has made it more difficult for foreigners to get a student visa, by capping places, slowing processing and raising the application fee to an exorbitant $2000. The government also has cracked down on dodgy colleges and migration agents; it has raised English proficiency standards and pared back student work rights; and, long after it should have, ended Covid-era temporary work visas.
But that has put a clamp on our fourth largest export industry and may lead to a greater fall-off in enrolments than anticipated, with the number of new students unlikely to meet the cap of 270,000 for this year; the planning level for next year has been raised to 295,000, with universities allowed to apply for an increase to their allocation if they provide more student accommodation
According to figures from the Department of Education, in the first seven months of this year the number of students new to Australia was down 21 per cent on the same period a year earlier. The big squeeze is occurring in enrolments in English-language colleges, which are closing at a rapid rate.
Commonwealth Bank economist Lucinda Jerogin says experience from Britain and Canada suggests there could be a quicker than expected slowdown in NOM, posing “some headwind to the expected economic recovery”, which will now likely depend on local sources.
“International students and other overseas migrants are important sources of unskilled and skilled labour,” Jerogin wrote in a note after the population release. “Australia has labour shortages across many industries. Lower labour supply will make it increasingly difficult to source the skilled workers required to meet Australia’s goals for the energy transition, AI and the construction pipeline.”
The timing of the rise in voter concern seems counterintuitive, even perverse given the official data. Federal assistance notwithstanding, rental inflation has subsided, consistent with stable vacancy rates across most capital cities, according to the ABS inflation report this week.
The nation should be getting a higher financial dividend from those it welcomes here permanently. That skill-based program has been maintained at a planning level of 185,000 places for this financial year. As well as a more predictable flow of foreigners, we need people with the skills in trades to meet our housing needs or deliver the projects needed to deliver the transition to clean energy. Very few of the permanent intake have those skills.
Housing Industry Association chief economist Tim Reardon says the federal government creates housing demand through immigration, while state and local governments are responsible for housing supply. “The price of homes reflects their ability to work co-operatively,” he says. “The goal of stable and reliable migration pathways has not been balanced with the removal of restrictions on new home building necessary to meet demand.”
Chief executive of national employer association Australian Industry Group Innes Willox also is alive to the community’s anxieties about housing supply and public infrastructure provision. “These are entirely understandable given the fall in our home building rates, the delays and cost blowouts afflicting many infrastructure projects, and the mounting red tape tying up delivery of both,” Willox says.
Willox argues constraining migration is likely to make our building problems worse, not better. “Electricians, carpenters, plumbers, steel erectors, crane operators, vehicle drivers, floor installers, tilers, painters, glaziers and construction managers are all officially classified in national shortage,” he says. “We have little prospect of raising our build rates if we further cut off the supply of these critical professions.”
The economy’s boom-bust cycle can be managed by monetary and fiscal policies. Migration, too, is a complex business, but as the review headed by Martin Parkinson revealed, we’re far from following best practice. At the very least the government should be explaining its reform directions, based on long-term strategies, and rolling out regulations that deliver the talent we need urgently and who will stay for decades and decades; simply starving these issues of oxygen, in the furtive ways of a master of Canberra’s dark arts, eventually will see voters losing trust in the visa system and the bona fides of recent arrivals who care for our aged and children.
We can avoid stressing out a tolerant society, lumbered with many policy-induced homegrown ailments, if governments act with purpose and openness; in that way they win consent on migration and turn down the temperature. Doing otherwise, as Labor has so often chosen, opens the door to moronic hasty decisions and cut-price Trumpy rhetoric.
More Coverage
The numbers merry-go-round dominates public commentary on migration in Australia. The latest population figures, covering the first three months of this year, were published a week ago. The Albanese government, which has sweated on the stats for a couple of years, welcomed news of a slowdown.