The migration pause
“I believe it was correct to close our borders [in 2020]. It was effective in having a good health outcome and is also related to why we’ve done so well economically. But it has left some question marks for business.
For understandable reasons, our vaccination program is behind that of many other countries. But we need to be careful that we don’t miss out where others are gaining while our borders are still closed. What can we do with our policies to try to offset or overcome that?
Economics 101 is ‘the three Ps’ of ways to grow your economy and increase your standard of living: population growth, participation and productivity.
Australia’s population growth has been running at 1.5 per cent a year, give or take. The average for advanced economies is about half a per cent and we make up
“Ransomware attacks are a thriving business model – it’s not hackers sitting in their parents’ basement.”
the difference through migration. When we closed our international borders, that came to an immediate halt.
One of the questions is whether Australia is still attractive to skilled migrants, students and tourists. My view is, yes, migration will come back but the timing is uncertain. Based on the government’s own numbers and its assumptions around the international border, our population will be about a million people less in 2022 than we thought it would be and that feeds into the economy: each of those million people spends money on essentials, discretionary items and a roof over their heads.
Migration also slows the ageing of our population, which is another challenge for the federal budget, and directly addresses our skills gap and spills over to boosting skills in our country. And it has intangible aspects – global connectivity, forging new ideas, diversity of thought – which all contribute to an innovation mindset.
Can we catch up that lost migration from last year and now, or have we lost it forever?
We compete with the United States, the United Kingdom, Canada and New Zealand for migrants. The US, for example, is going to exempt graduate students in STEM fields from its green-card quotas. That’s a direct policy to capture the piece you’ve lost and ensure your country remains front of mind and attractive to skilled migrants.
When the world’s back and humming in, say – pick a number – three years, Australia will be attractive. But the risk is our migration pause may be longer than those countries with which we compete.”