Net overseas migration to Australia is plummeting creating serious implications for the nation’s economy, new research claims.

ANU Migration Hub researchers Professor Alan Gamlen and Professor Peter McDonald say the negative economic implications of the drop in migration to Australia are significant and it’s unlikely the decline will slow down soon.

“The cycle of policy cuts to migration that began in the 2024 election season is still working its way through the legislative and policy process and is likely to place downward pressure on arrivals for some time,” the researchers say in a new policy brief.

“Meanwhile, the extensions to temporary visas granted during the pandemic are expiring. So, if we’re not careful, we might be back in ‘pandemic world’ in a couple of years, worrying desperately about how we’ll fill skills and labour shortages.

“From the perspective of the Australian economy and society, the best-case scenario is a steady net inflow of overseas migration,” the researchers say.

They say Australia depends on immigration to offset the ageing of its population and to meet labour demand.

Population ageing can lead to a situation known as a ‘demographic winter’, when youth and the working age population becomes a scarce resource, and the population and economy of a country shrinks, leading to lower standards of living.

Australia imports working-aged people to counter this problem, and that has helped make Australia one of the richest nations in the world, the researchers say.

“The problems start when migration happens in sudden, destabilising bursts and troughs rather than through a steady stream. By disrupting all forms of human mobility, the pandemic completely destabilised the migration systems of Australia and many countries, and we are still recovering from that shock,” the researchers say.

“The way to steady the ship is not by making sudden movements. Re-balancing migration will happen naturally as regulated supply meets Australian demand in the coming months and years.

“Sudden radical slashing or opening of new migration streams will just contribute to prolonging the volatility.

“That said, the current rapid rate of decline in migration presents a risk of a ‘hard landing’, where we undershoot the levels of migration required to keep the Australian economy running smoothly, as we did during the pandemic.

“If the aim is a soft landing from the recent migration highs, there may be arguments in favour of reviewing some of the proposed or actual restrictions introduced in the past 18 months – especially those that may have been election-season reactions to the perceived risk of a prolonged migration blowout that has not eventuated.

“This is not the same thing as an argument in favour of higher migration levels forever. On the contrary, the wider aim should be an orderly post-pandemic return to stable, normal levels of migration – whether that is the pre-pandemic normal, or a ‘new normal’ decided through proper consultation and deliberation,” the researchers say.

From 2023 to 2024, NOM to Australia fell by 189,870. With 103,700 fewer arrivals and 17,350 additional departures, international Students were by far the largest contributors to the lowering of net overseas migration between 2023 and 2024.

The researchers say that in the five-year period since the pandemic first hit, Australia has had a massive cumulative shortfall of migrant arrivals.

“Because of COVID-19, we received 636,000 fewer migrant arrivals than expected based on the pre-pandemic trend. There was a huge drop during the pandemic, then a bit of a catch up afterwards, but now arrivals are falling again,” they say.

“This is partly due to government policy, including cutting international student arrivals, which is aimed at addressing concerns about the large migration surge.

“Compared with the pre-pandemic trend, cumulative arrivals have been very low over the past five years,” the researchers said.