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Migration to assuage the impact of an ageing population

13 November 20150 comments

Australia’s current migration program will deliver massive economic gains and a population of 40 million by 2060, according to modelling by the Productivity Commission.

In a draft report into Australia’s migrant intake, the commission says there’s a  “demographic dividend’’ to the nation through reducing the ­impacts of an ageing population by attracting working-age people.

Migration will deliver massive economic gains

Migration will deliver massive economic gains

The commission says preliminary economic modelling shows continuing net migration at the long-term average will deliver a 50 per cent increase in real GDP per person and the population will rise from almost 24 million today to about 40 million by 2060.

Without net migration, real GDP per capita is projected to rise 42 per cent in 45 years but the population would rise to only 27 million people

“While immigrants benefit from their employment in Australia, preliminary modelling suggests that the Australian population as a whole benefits from higher output per person,’’ the report said.

The commission says the demographic composition of ­immigrants matters and by ­attracting working-age people, there is an advantage to Australia by reducing the ­impacts of an ageing population.

Commissioner Paul Lindwall said most of Australia’s immigrants and their children integrate well into the labour market and society as a whole, and ­become self-reliant citizens.

In 2014-15, Australia granted permanent residency to about 204,000 people – 129,000 through skilled migration, 61,000 through the family stream and 14,000 on humanitarian visas.

The draft report recommends abolishing the Significant Investor Visa streams for those who ­invest between $1.5 million and $15m, saying that they contribute nothing to society the only Australian beneficiaries are fund managers.

The report also suggests better targeting skilled 457 visas to areas of genuine skill shortages, and ­introducing a more systematic and transparent framework for visa charging.

Mr Lindwall said the immigration system attracted a large number of young and skilled ­immigrants who found jobs and made a long-term contribution to Australia.

“It is clear that English language skills, education and employment are the three main predictors of successful integration,’’ he said.

“We have a system that also provides opportunities for family and humanitarian-immigrants.”

The report also argues against using price as the principal mechanism for allocating visas, warning it could “attract less desirable immigrants compared to the current system’’.

Charging a $40,000 entry fee to new migrants has been suggested by Liberal Democratic senator David Leyonhjelm who says it would raise $7.5 billion a year and be “enough to pay for much-needed tax cuts’’.

But the commission said charging migrants for permanent visas to Australia would increase short-term government revenue but was likely to erode confidence in the nation’s immigration system by attracting older wealthier immigrants who were less likely to successfully integrate.

The economic advisory body also argues that a price-based ­approach to immigration would favour those with a capacity to pay for places over people who would “make the greatest economic contribution to Australia’’.


Laurie Nowell
AMES Australia Senior Journalist