Migration rush after Covid restrictions kills Labor’s political alibi for rise in numbers

Jim Chalmers says net overseas migration will be cut in half from its peak last year to 260,000 in 2024-25. Picture: NCA NewsWire / Martin Ollman

The Albanese government lost its political alibi on migration numbers a couple of months ago.

As foreign students, temporary workers and backpackers surged back into the country after pandemic border restrictions were ­removed, Labor’s explanation was that the record inflow of foreigners was a temporary boom, a catch-up phase.

Besides, as Jim Chalmers often countered, total migration was still far below the level forecast by the former Coalition government before the pandemic. “Even with this big recovery in migration, we still haven’t recovered the ground that we lost during those couple of years where the migration tap was effectively turned off, so that’s an important, very, very important point,” the Treasurer told Sky News last August.

The Covid gaps have been filled and over the next four years there will be 145,000 more ­migrants here than forecast before the pandemic.

A year ago, Treasury expected it would take until the end of the decade to reach the pre-pandemic trajectory, but as reality hit the narrative slowly changed. In the year to last June, net overseas ­migration was a record 528,000. By September, the 12-month running total for the inflow of foreigners was 549,000.

The Coalition’s attack line that Labor was pursuing a “Big Australia” policy by stealth went into overdrive as the nation’s population grew by a mammoth 660,000, once natural increase was added to the annual total.

Amid this blowout, the Albanese government’s counterpoint was that the cumulative migrant inflow was still below what the ­Coalition had expected (or was planning) in the mid-year budget review published in December 2019.

In any case, as Chalmers said back in August, “one of the things that people don’t understand about the net overseas migration numbers is that it’s demand-driven – it’s not a government target, it’s not a government policy to hit a certain number, it is a consequence of those students and the tourists.”

In last year’s budget papers, Treasury assured us that even with the stronger near-term outlook, total net overseas migration was not expected to catch up to the level forecast before the pandemic until 2029-30.

That changed earlier this year when foreign students returned for the start of the new semester, although the numbers from the statistician to confirm this won’t be published until September at the earliest.

Officials were off by six years in their forecasts for how long it would take to make up the ­migrant shortfall due to the Covid-19 crisis. According to the numbers in Tuesday’s budget, by June there will be 20,000 more migrants than the pre-pandemic forecast; 65,000 more by the following year and a cumulative 105,000 more in 2026.

That’s if you have faith in the forecasts. Treasury’s record here is poor, to say the least, and a lot of other agencies, including the ­Reserve Bank, rely on it to anticipate demand for housing and services and estimate future inflation.

At budget time a year ago, the forecast for the financial year that was about to end in eight weeks was a net migrant inflow of 400,000. Treasury was out by 128,000. The net overseas ­migration forecast for this year was originally 315,000, ratcheted up to 375,000 in December’s mid-year budget review and revised up to 395,000 in Tuesday’s budget.

Treasury noted that by the time border restrictions were ­relaxed at the end of 2021, net overseas migration was cumulatively almost 500,000 lower than expected before the pandemic.

Even with the surge of students and workers, Treasury predicted that by next month, total net overseas migration over the past five years would be 215,000 lower than the pre-pandemic forecast trajectory. Wrong again.

In December, Labor released its Migration Strategy, the ­response to the review led by former top public servant Martin Parkinson, almost eight months after the government received the advice.

The delay was primarily due to the government scrambling to find a way to reduce temporary migration.

Labor had to show its new policy suite would lead to lower ­migrant inflows. Home Affairs Minister Clare O’Neil said the crackdown on rorts in the education system, tighter language ­requirements and screening of students, as well as other measures, would lead to a fall of 185,000 temporary migrants over four years

This week’s budget forecasts a halving in the migrant inflow next financial year to 260,000 from the peak recorded last financial year.

There’s a good chance that will happen, because of the handbrake applied to granting foreign student visas, as well as a push to get graduates to return to their home countries.

It’s an organic tightening up.

In the meantime, the Coalition will be sharpening its lines, about Labor’s loss of control on ­migration and the population boom’s effect on housing, transport and social services.

Peter Dutton’s promised squeeze on the permanent ­migration program (from 185,000 places to 140,000) has grabbed headlines. It would be an act of self-harm, exactly the wrong policy move for a nation that needs skilled migrants to settle here and build lives, raise children, bring fresh ideas and help to raise our prosperity.