The role of immigration and migration through to 2050
Monday 28 June 2010
Informa Conference, Population Australia 2050 Summit, Sydney Harbour Marriott
I acknowledge the First Australians on whose land we meet, and whose cultures we celebrate as being among the oldest continuing cultures in human history.
The Treasury's 2010 Intergenerational Report shows that Australia's population is projected to increase to 35.9 million people by 2050. This projection is significantly higher than the 28.5 million by 2047 as projected in the 2007 Intergenerational Report.
It is important to note however, that this is not Government policy nor is it a target the Government is trying to reach.
Immigration is a very important part of the population debate, but it is just one part—there are much wider considerations than immigration levels alone. The Prime Minister, Julia Gillard has acknowledged that skilled migration is important, but she has also said that she does not want to see areas of Australia with 25 per cent youth employment because there are no jobs. She noted that we need to stop, take a breath and develop policies for a sustainable Australia.
The Prime Minister has also announced that population Minister Tony Burke would have a change of title to Minister for Sustainable Population.
While it is generally accepted that a country's population is one of the drivers of its economic growth, today I would like to talk to you about the way that the department does its work to manage the entry of persons into Australia in keeping with Australia's population needs.
There is wide consensus that economic growth is driven by the three 'P's – population, participation and productivity.
I am pleased to say that the department's work contributes to Australia's needs for population, participation and productivity.
I am also proud to say that immigration has played a very significant role in Australia's national development—we have had a managed immigration program for last 65 years.
In 1945, Australia became the first country in the world to create a government agency wholly dedicated to immigration.
Since that time, seven million people have migrated to Australia—around 100 000 persons a year, on average.
The latest Census shows that around two in five Australians were either born overseas, or are the children of immigrants—and Australia is now a diverse country, with people from more than 200 countries now calling Australia home.
Australia's skilled migration program is among the best in the world, and its key features have inspired similar programs in countries such as the United Kingdom and other European countries.
Immigration has made Australia more connected with the rest of the world—it has enriched our community and has boosted our economic growth.
Immigrants add to the labour force. They lower the age profile of population and they add to productivity by quickly acquiring skilled jobs.
Our temporary and permanent skilled migration programs have performed a key role in helping Australia move beyond the recent Global Financial Crisis.
My department currently manages a large immigration program where around 170 000 people become permanent residents each year.
In managing this large size program we need to ensure our skilled immigration program is responsive to the country's current and emerging conditions while facilitating the growth of our collective economic and social wealth in the longer term.
And in Australia's case, we have an immigration program that is geared towards enhancing Australia's social and economic prosperity.
This is why the government has implemented significant reform measures to ensure that our programs are set within Australia's best long-term interests.
For example, the department implemented a package of reforms to ensure that immigration programs are increasingly targeted to attract the best and the brightest immigrants so as to ensure increased productivity.
Reforms to the temporary skilled – subclass 457 visa program, to the skilled migration program as well as reform measures on student visa integrity, have all helped to ensure that our programs settings are calibrated right.
We are moving from the ‘Australia needs skills’ to ‘Skills Australia needs’ approach.
This is not a subtle move – this is a move that will ensure our programs are responsive and forward looking.
I am pleased to say that our programs are tailored to reflect our increased focus on a demand-driven skilled migration program.
A program that is shaped by employers' needs rather than by the desire of prospective migrants to come to Australia.
It is important to note that demand driven programs such as the 457 visa respond to changes in business cycle. An example of this is the reduced number of 457 visa applications in line with recent economic downturn. It self-corrected and proved itself.
Our migration programs are not just delivering the right mix of immigrants, to meet Australia's genuine socio-economic needs in the immediate term. These are also focused towards Australia's long term needs.
As of Thursday 1 July we will have in place a new, forward looking and more targeted Skilled Occupations List.
This new list focuses on the genuine future needs of Australia—the high value professions and trades—and will help select General Skilled Migrants who have the best chance of securing a job that matches their skills upon arrival in Australia.
We are also moving away from the ‘one-size-fits all’ approach.
We are putting into place individual State and Territory Migration Plans which will help us to meet specific skill needs at a local level.
Not just that – to ensure the best and the brightest migrants are selected, we are also reviewing our migrant selection process.
We are reviewing the Points Test scheme to ensure that it is not heavily distorted towards a handful of occupations—a problem that has been addressed through our recent changes to Skilled Occupations List.
But there is still further work to be done. We need to ensure that our points test enables us to select highly innovative and well trained migrants to ensure we have a solid human capital base for Australia's longer term prosperity.
My department is also contemplating a new migrant selection model. Under this model, prospective immigrants will be invited to lodge an expression of interest to emigrate to Australia, and will be selected for migration as and when the need arises.
Our reform agenda ensures that migrants fill critical skill gaps in the labour force, and that in the longer term they provide us with a tool to help manage Australia's future economic wellbeing.
These are the benefits to Australia that need to be balanced against the matter of Australia's population—which is currently approaching a demographic cliff.
As noted in the 2010 Intergenerational Report, the number of Australians of working age—that is between fifteen and sixty-four—is projected to fall from sixty seven per cent to sixty per cent.
Also, the number of persons aged between 65 and 84 years are expected to more than double between now and 2050.
At the same time, the total fertility rate in Australia is projected to remain below the replacement level over the period to 2050 despite a recent boost.
With these forecasts in mind, Australia must be prepared to meet the inevitable fiscal challenges associated with ageing population, challenges such as rising health costs and a more complex demand for health services.
Bearing in mind such fiscal challenges, it is important to note that Australia's immigration programs are an important driver of economic growth, and as a consequence, will assist us to meet such challenges.
Not only that—immigration also addresses the problem of an ageing population because migrants tend to be younger, on average, than the resident population.
While acknowledging the benefits that immigration provides to the Australian economy in building sustainable long-term prosperity for its future, I am also mindful of the need to consider the long-term effects that immigration has on our population and our environment.
It is for the purpose of addressing this long-term effect that in 2009 the Government announced its intention to develop a long term migration planning framework.
The department has commissioned research from academia from renowned Australian universities to inform the development of the framework.
Professor Peter McDonald from the Australian National University has examined the impact of immigration levels on Australia's labour force in the period to 2050.
At the same time, a team of cross-disciplinary experts at Flinders University is examining the longer term interactions of immigration levels with Australia's natural and built assets over the period to 2050.
It is important to bear in mind that this framework will be a policy-guiding tool for Australia's future immigration levels to 2050.
It will not be a target-setting mechanism.
By developing the long-term migration planning framework as a guide, we will ensure that Australia's future immigration levels are guided by the genuine economic needs of the country—not by visa settings nor the desire of prospective migrants to obtain permanent residence in Australia.
In other words, Australia's immigration levels will not be beyond our country's ability to accommodate them.
Our planning framework will help us to plan for sustainable immigration outcomes over the medium and long-term, and to ensure sustainable and manageable development for Australia—both urban and regional.
The framework will also improve our ability to forecast future immigration levels and thus improve our planning and policies in relation to our environment and our infrastructure.
Further, it will guide the Government's policies and programs for promoting social harmony and social inclusion for our immigrants.
It will help us to monitor and to manage the ‘immigration revolution’ that has seen a significant shift from permanent to temporary migrants in Australia's recent immigration levels.
The number of temporary immigrants in Australia has grown rapidly in recent years since a 2001 decision to open up pathways for temporary residents—particularly students—to remain in Australia permanently.
Subsequent to that policy decision, Australia's population growth in recent years has been mostly driven by large numbers of temporary immigrants such as students remaining in Australia for longer periods.
In fact, the number of temporary residents coming to Australia now exceeds the number of permanent residents. In the 1980s, only ten per cent of net overseas migration comprised temporary entrants.
Today this number has risen to almost seventy per cent.
This has led to the historic high levels of Net Overseas Migration—just over 300 000 people per year, up until a short time ago.
Many people argue that the current net migration levels are unsustainable on a number of fronts, in particular, when considering our natural environment and our country's infrastructure.
It is important, however, to understand what this net migration figure is and what has contributed to its growth.
Net Overseas Migration counts all people entering and exiting Australia for 12 months in a given 16 month period.
It includes permanent and temporary immigrants coming to Australia, Australian citizens and residents leaving and the New Zealand citizens moving in and out of Australia.
It is also important to note that there is a ‘lag effect’ between visa grant to migrants, their arrival and the impact on NOM. Therefore this figure represents migration levels for 2008–09.
Recent historic high levels of net overseas migration have largely been driven by increased number of temporary entrants arriving in Australia in the past few years.
Also, the number of temporary skilled workers – subclass 457 visa holders in Australia increased significantly in recent years due to our sustained economic growth creating demand for skilled jobs.
Other factors contributing to this increase are a greater number of Australian citizens returning from overseas and larger number of New Zealand citizens coming to Australia.
It is no coincidence that the net effect of these inflows and outflows have resulted in high NOM levels amidst a subdued economic environment overseas during the recent economic downturn, and better than expected performance of Australia's economy.
Australia's net migration levels should be driven by permanent migration not temporary.
Thanks to recent reform measures, it is expected that the net overseas migration figure will return to a sustainable long-term average given that most of the temporary entrants – the major contributor to net migration, will eventually return to their home country instead of prolonging their stay in Australia.
Further, with the economic environment starting to recover overseas, the number of Australian citizens and residents departing Australia is also likely to increase.
In fact, based on current trends net migration is projected to decline to around 230 000 to 250 000 in 2009–10.
Managing immigration levels in a sustainable manner is a challenging task and requires a great commitment.
However, with careful planning, the challenges arising can be managed to the benefit of all Australians.
To address these challenges, the government relies on foresight and innovative thought, a grounding in practical goals and evidence, an open mind, a commitment to overcoming obstacles, and above all solid evidence to inform policies of longer term implications.
Fortunately we have strong data which informs our immigration policies and outcomes—data that enables us to monitor the number and characteristics of people entering and leaving Australia.
I am proud to say that a combination of the passenger card and our comprehensive visa system helps us to calculate accurately the contribution of immigration to our population.
We need to be ahead of the game.
The department has already started work to develop forecasting capabilities to bring together the most credible outcomes in the medium to long term.
In a broader context, the development of the long-term migration planning framework will form part of DIAC's contribution to broader, whole-of-government policy issues, including Australia's first, comprehensive, sustainable population strategy.
URL: http://www.minister.immi.gov.au /media/speeches/2010/ce100431.htm
Last update: 23 September 2011 at 11:54 AEST