Debate on cutting Australia’s migration intake has continuously been discussed in the media since Former Prime Minister, Tony Abbot’s call to reduce Australia’s skilled permanent migration intake by 80,000 in February.
Mr Abbott had argued that migration cuts were needed saying, “At least until infrastructure, housing stock and integration have better caught up, we simply have to move the overall numbers substantially down.” Mr Abbott also reasoned, “It’s a basic law of economics that increasing the supply of labour depresses wages; and that increasing demand for housing boosts price.”
In contrast to Mr Abbott’s theories, infrastructure groups, think tanks and economists have strongly opposed any form of cuts to Australia’s migration intake, saying it isn’t the solution to congestion, housing affordability and stagnant wages. Here’s why.
1. It’s not all about demand – we need to manage supply
Professor of Economics at the Australian National University, Robert Breunig believes it is overly simplistic to blame immigration for placing greater pressure on infrastructure and demand for housing. He argued that Governments have a role to play in ensuring housing supply is adequately maintained by upgrading and expanding city infrastructure and incentivising housing developments to allow for the growth attributed by migrants.
Infrastructure Australia said the key was to plan early for infrastructure development, including an increase in public transport investment and improved access to jobs, health services, schools and green spaces in outer areas of Australia’s cities.
Some of our brightest minds also agree. Australia’s Public Policy Think Tank, The Grattan Institute claimed boosting housing supply and better planning would be the best way to increase the affordability of housing prices. They added that cutting immigration should be a last resort.
2. The migration program is designed to manage skill shortages
Mr Breunig also explained that because Australia’s skilled migration program targets industries facing skill shortages, skilled migrants play an important economic role in helping Australian businesses manage labour demands that cannot be met locally.
Migration agent, Sheila Woods from Interstaff says, “We’re seeing a number of changes being made to Australia’s migration program to ensure it more accurately reflects Australian skill shortages – one of the major changes has been the replacement of the 457 Visa with the Temporary Skills Shortage 482 Visa. Under the new visa, employers need to undertake a number of labour market testing requirements to show their difficulties in sourcing people locally before proceeding to sponsor a visa holder.”
3. Skilled migrants help fund Australia’s economic growth
Scott Morrison, Treasurer and Former Immigration Minister also believes cutting migration intake is not the answer. Mr Morrison has defended the economic contribution of skilled permanent migrants, saying “People who come as skilled migrants pay taxes. They actually make a net contribution to the economy,” Mr Morrison said. He also said that by cutting immigration by 80,000, as suggested by Mr Abbott, the tax intake to the federal budget would be reduced by $4 or $5 billion.
Unfortunately, Australia’s skilled migration intake has already effectively been cut by 10,000 places due to the Government’s decision to merge a visa for New Zealanders with the existing skilled migration program without increasing the placements offered. Read our article on this here.
If you would like to understand if you are eligible for a skilled visa, we encourage you to contact our registered migration agents for a free visa assessment on (08) 9221 3388 or email [email protected]