According to the Reserve Bank’s economists, Australia’s population has grown by about 2.5 per cent in the year to September, almost double the four-decade pre-pandemic average rate.
That’s an extra 654,000 people to house, feed and move around our cities, with migrants accounting for more than 80 per cent of the biggest jump in residents in our history.
Right now, we are importing the equivalent of the entire population of Tuvalu every seven days.
The influx of foreigners – who spend, study, work and travel – is pumping up our economy, with the RBA upgrading its forecasts for GDP growth this year from a miserable 0.9 per cent in August, to 1.6 per cent in its policy statement released on Friday.
That’s an economy expected to be almost $18bn larger, hence the use of the word “resilience” and its variant by Jim Chalmers and Treasury secretary Steven Kennedy to describe our performance while confronting global shocks and the central bank’s quick-fire rate rises.
But with more people to share our boundless plains, per capita incomes are shrinking.
Inflation will likely stay higher for longer, as will consumer spending, interest rates, home prices and rents.
One stunning figure from the RBA’s commentary is advertised rents (for new leases) are 30 per cent higher than pre-pandemic levels, although the pace of growth has slowed, particularly in regional areas.
More people are squeezing into share houses, which will help to ease supply shortages.
At the start of last month, there were almost 2.3 million people on temporary visas with work rights in Australia, or about one in six of the nation’s entire labour force of 14.6 million.
Employers are filling job vacancies, especially in areas such as hospitality, where spending on dining and drinking is holding up despite exorbitant costs being passed on to punters.
Surge pricing indeed!
Services inflation is the bogey in the outlook, driven largely by wages, rents and energy bills.
The RBA is careful to say the additional labour supply and consumer demand due to migration eventually cancel each other out, but there are short-term inflation pressures for sure.
Our officials have been pitifully exposed by the demand-driven migrant surge, especially due to students, who are also staying longer on graduate visas.
Authorities knew foreign students would be back on campus when restrictions eased. But they did not anticipate they would reach these volumes.
Get a better clicker.
The Department of Home Affairs confirmed on Friday that there were 664,178 foreigners on student visas at the end of September; in October 2019, the pre-pandemic peak, there were 652,462 student visa holders in the country.
In a section reviewing how the economic outlook had evolved compared with its guesstimates a year ago – its forecasting hits and misses – the RBA said “population growth has been substantially stronger than expected following the reopening of the border”.
“A year ago, the weight of evidence available suggested that a rebound in international student numbers was underway,” the RBA said.
“But a complete recovery was not imminent and there was substantial uncertainty about when China would remove its pandemic restrictions.”
Treasury’s budget forecasts on net overseas migration have been exposed as woefully behind the play.
They’re not the only slow learners out there.
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