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DIMIA Annual Report 2001-02

LOOKING FORWARD - THE LONGER VIEW

'Australia of course has long been ahead of the game in its research into its migration policy. It's almost certainly the most informed migration policy in the world - perhaps the world has ever seen.'

Professor John Salt, London University

Outcome One is managed not only within an annual cycle but also within a longer term perspective.

In 2001-02 research and analysis aimed at positioning the program strategically for the future was undertaken, especially in the field of population. The context is graphically illustrated in Fig. 1.

Fig. 1. Deaths will exceed births in 30 years

'Because of low fertility rates, many more countries will be seeking immigrants in the future… Australia remains a highly favoured destination… Nevertheless, similar countries like New Zealand and Canada are struggling to maintain their net migration levels.'

Professor Peter McDonald, Australian National University

Australia has identified three key issues critical to our population future: net overseas migration, the fertility rate and labour force participation rates.

The relative importance of the first factor is demonstrated by the fact that, on current projections, in 30 years time immigration will be the only thing preventing Australia's population from sinking.

Professor Peter McDonald has noted that an annual rate of around 80,000 net overseas migration (which Australia has averaged in the past) is the minimum to ensure population growth through the next half century.

The outcome of the 2001-02 migration program will help ensure that this long term average is achieved.

'…the rise in education levels is a crucial element in explaining both the decline in fertility (which underlies the ageing of the population) and the rise in productivity (which offsets much of the fiscal problem attributed to ageing).'

Professor Steve Dowrick, Australian National University

Many commentators, including Professor Steve Dowrick, have linked increased levels of education for women with a decline in the fertility rate.

As living standards rise, he argues, so families choose to have fewer children and the rate of population growth tends to fall.

This pattern only serves to highlight the importance of skilled migration, which increases both the absolute size of the labour force and the proportion of skilled workers within it.

The crucial link between skilled migration and Australia's economic and demographic future can be seen clearly in projections of the future size of Australia's labour force.

The 13 per cent projected increase in the labour supply in the next 30 years contrasts sharply with the 80 per cent increase that occurred in the past 30 years.

A migration program that delivers significant numbers of young, educated and skilled workers every year will play a key role in enhancing both the size and the productivity of Australia's future labour force in the years of demographic transition to come.

NON-HUMANITARIAN ENTRY AND STAY

'One thing we are doing well as a nation is starting to get into the skilled migration market…This is of great importance, because if we want to be a high-wage, high-income economy down the track, it will come down to our skills in the end.'

Chris Richardson, Access Economics.

A key focus of the department's strategic approach under Outcome One is on permanent and temporary skilled migration.

This focus has developed against a background of increasing international competition for highly skilled migrants.

The mobility of these skilled workers has also increased, in step with dramatic growth in the global movement of capital and trade.

The success of Australia in attracting increasing numbers of skilled permanent migrants can be seen in Fig. 2.

Fig. 2: Changing the Balance

IMPROVING LIVING STANDARDS AND BENEFITING THE BUDGET

In 2001-02 the migration program delivered 53,520 permanent skilled stream visas - the largest number on record and two and half times the size of a decade earlier.

Skill Stream entrants also had higher skills, qualifications and English language abilities as a result of progressive reforms to the balance and composition of the migration program.

The benefits of this increasing intake of skilled migrants have been demonstrated by recent research.

Independent economic modelling firm Econtech, has shown that Australian living standards increase because migrants' demands for goods and services expand domestic output and create additional jobs.

The new migrants also bring benefits in the form of the funds that they deposit or invest here.

Increasing skilled migration has also been a factor of Australia's world-beating rate of productivity growth, as it has enhanced a highly educated workforce, able to embrace and exploit technological change.

The cumulative impact of skilled migration on the living standards of all Australians is illustrated by Fig. 3.

Skilled migrants also pay more taxes and benefit the Commonwealth Budget - (Fig. 4). Research commissioned by DIMIA in 2001-02 has demonstrated that State budgets are also net beneficiaries of a Migration Program focussed on skilled migration.

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Last reviewed Friday 17 October 2014