Australia needs 2 million migrants

Australia needs an explosive post-World War II-style immigration surge that could bring in 2 million people over five years to rebuild the economy and address worsening labour shortages, according to NSW government advice to new Premier Dominic Perrottet.

Top bureaucrats last week urged Mr Perrottet to seize the national leadership initiative by pushing a “national dialogue on an aggressive resumption of immigration levels as a key means of economic recovery and post-pandemic growth”.

Population growth since the pandemic has collapsed after federal and state governments closed off immigration, a mainstay driver of jobs and economic activity in Australia for decades.

“An ambitious national immigration plan similar to Australia’s post-World War II approach would ensure Australia would benefit from skills, investment and population growth,” Mr Perrottet was told in the advice, which was seen by The Australian Financial Review.

The top-secret, politically sensitive document was prepared by the NSW government’s top mandarins as part of an incoming premier’s brief put together by the Department of Premier and Cabinet. It is understood the advice was delivered to his desk when he took up the job last week.

In a sign the new Premier is taking the advice seriously, Mr Perrottet on Monday said the borders need to be opened up amid a “general labour” shortage to ensure a healthy economic recovery.

“If we lose this opportunity, those skilled migrants will go to other countries,” he said. “We won’t get those engineers, those accountants, they’ll commit to other projects.”

Mr Perrottet is pushing to end NSW’s 14-day hotel quarantine system and replace it with a shorter period of home-based isolation, and is also revisiting inbound passenger caps.

“We need to get away from that formal beds quarantine system and to something that’s more suitable to bring people in and out of this country on a more fluid basis.

“I think by next year we’ll see a very different sort of immigration policy, and I hope we’ll start to see more people coming in and filling those jobs.”

‘Shameless’ push for skilled migration

The top bureaucrats told Mr Perrottet that NSW under his predecessor Gladys Berejiklian has played a “proactive role” in pushing for the reopening of the Australian economy, and was joined in recent weeks by Victoria and the Commonwealth “pushing a position focused on living with COVID-19″.

They also took a swipe at premiers and chief ministers of Queensland, Tasmania, Western Australia and the ACT, whose attitudes they described as “resistant”.

“It is highly likely that NSW will reopen its international borders ahead of other states/territories and in the absence of any national agreement.”

Mr Perrottet was told that a “time-limited” immigration surge could include a “doubling” of pre-COVID immigration levels for the next five years and “unashamedly” focusing on “the skilled migration we need to develop key industry sectors”.

Population growth since the pandemic has collapsed after federal and state governments unwittingly embarked on one of the most wide-reaching post-war policy experiments ever conducted by closing off immigration, a mainstay driver of jobs and economic activity in Australia for decades.

Net overseas migration added 194,400 people to Australia’s population in the year ending June 2020, a sharp drop from the 241,000 reached in 2018-19.

A doubling of that pre-pandemic rate would see net migration leap to more than 400,000 a year, a staggering surge that would see the population swell by 2 million by 2026.

“There is a need to return to higher levels of migration across the board, both in terms of skilled migration and being more generous to people coming in under specialist humanitarian visas and, indeed, international students returning on temporary visas,” said Peter Shergold, chancellor of Western Sydney University and the Commonwealth’s former top bureaucrat.

“These things are very important to the economic future of NSW.”

Migrants ‘do not restrain wage growth’

Mr Shergold said the post-pandemic recovery should trigger a fresh debate about the need for more people to settle in regional NSW where labour shortages are most acute.

“As we increase migration levels once again, we also need to have a discussion about what balance we want to strike between permanent and temporary settlers.

“Increasingly those who have been coming to Australia and NSW have been people on temporary visas, whereas for 70 years our tradition was to take permanent settlers.”

“Today, however, an increasing number of the workers we depend on are working holidaymakers, temporary skilled workers or international students.”

Mr Shergold also reiterated the view of the Productivity Commission and other independent economic experts that migrants arriving in Australia create demand, stimulate growth and “do not restrain wage growth”.

The advice to Mr Perrottet from the NSW bureaucracy is a stark departure from where the state was headed before the pandemic.

Business Council of Australia president Tim Reed said they were using the government’s own framework to reduce emissions.

Ms Berejiklian in 2018 called for a halving of immigration to the state to keep up with infrastructure demands.

NSW needed “a breather because rates have gone through the roof,” she said at the time.

Now, experts say the breather has gone on for too long and is stiffing economic potential.

Closed borders may turn out to be a bigger threat to the economy than the lingering effects of temporary state lockdowns, said Chris Richardson at Deloitte Access Economics on Monday.

“Population growth is next to non-existent,” he said, and predicted that by 2025 there would be 900,000 fewer people living in Australia than was expected before the pandemic.

That shortfall would cut demand for about 350,000 houses and apartments.

SOURCE: Financial Review

Image

We strive for accuracy in facts checking and fairness in information delivery but if you see something that doesn't look right please leave your feedback. We do not give immigration advice, and nothing in any posts should be construed as such.