Australia calling in more migrants with the aim of $120 billion economic boost

Given the closure of Australian borders for nearly two years, accounting firm KPMG has suggested bumping net migration levels beyond 350,000 per year as a means to reverse a population decline and stimulate demand thereby increasing the size of the labour pool. This would be equivalent to adding a city to the size of Brisbane every seven years and would boost GDP by 4.4% i.e. $120 Billion higher by the end of 2028-29.

But with Australia's house prices becoming increasingly unaffordable for average workers, a sharp spike in population and demand would have its downside as well. The Grattan Institute is of the opinion that numbers alone would be counterproductive and the migration policy must tilt toward skilled workers. 

Business groups are demanding the nation's cap on permanent skilled migration be bumped up to 200,000 per year, rather than the current 160,000. While Australia’s migrant population accounts for 10% of its entire resident population, KPMG says more migrants can be brought in. The firm reports that over the next 10 years, there would be 540,000 fewer migrants entering Australia which is  900,000 below the number needed to retain their 10 per cent population share.

But numbers aren’t sufficient for economic recovery, the vital need for Australia is skilled migrants. The Department of Home Affairs has identified 44 occupations as critical skills needed to support Australia's response to the COVID-19 pandemic and economic recovery.This Priority Migration Skilled Occupation List applies to the Temporary Skill Shortage, Skilled Employer Sponsored Regional (Provisional), Employer Nomination Scheme, and Regional Sponsored Migration Scheme visa categories. KPMG research suggests each additional migrant positively impacts GDP by around $130,000 per year, mostly from household consumption of about $70,000.

But given the surge of Covid cases in the country at present, it remains to be seen whether this plan of increased intake of skilled migrant workers will see its fruition.