The Stats Guy: When talking migration, you need to look beyond the hype migrants are

Before we tinker with migration, we need to understand who is coming to Australia.

Before we tinker with migration, we need to understand who is coming to Australia. Photo: TND/Getty

Last week I argued that any plausible Australian government will continue the current high migration approach. Today we will explore the basic makeup of migrants coming into Australia to gain a deeper understanding of the topic.

What did an average year of migration into Australia look like in the last decade? Let’s not worry about the country of origin for today and focus only on the type of visa that migrants have when arriving in Australia.

News stories tend to only report net overseas migration numbers. A typical non-pandemic year sees more people coming into the Australia than people leaving the country.

Australia tends to record positive net migration. As a rule of thumb, two thirds of national population growth come from net overseas migration and one third comes from natural increase (more births than deaths).

The commonly reported net migration numbers of around 215,000 new migrants per year underplay the large number of arrivals.

On average in the last decade 485,000 people came to Australia from overseas every year. About 270,000 people made the move into the opposite direction, resulting in the net growth of 215,000 migrants.

The chart below tells the story quite nicely. The line on the bottom shows the number of people leaving Australia. The line on top was spoken about a lot last year. It shows overseas arrivals rose slowly throughout the 2010s, took a nosedive during the pandemic, just to reach a record high of 737,000 in the 2022/23 financial year.

That spike was often discussed in very polemic terms. We are mad for allowing so many migrants into the country especially in times of a national housing shortage, it was claimed.

If we average out migrant arrivals and compare the four years since the pandemic with the four years prior (see the dotted lines), we realise that we take in fewer migrants now (454,000) than in the past (527,000).

So why did 2022/23 see such extraordinarily high migrant arrivals? Compared to the last full year of pre-pandemic data (2018/19) an additional 187,000 people arrived in 2022/23 (550,000 vs 737,000). We even took in seven per cent fewer permanent migrants. The growth was almost exclusively driven by pent-up demand for international education.

The student influx

We handed out 118,000 more student visas than before the pandemic. There was also a special type of bridging visa that was introduced during the pandemic that allowed temporary visa holders to prolong their stay. This visa accounted for roughly 33,000 additional migrants in Australia in 2022/23 (mostly students) and has now been discontinued.

These temporary students will leave Australia eventually and will show up as a spike in the bottom line in the chart above.

We already know that the migration intake will be lower in the coming years, as educational institutions are forced to strengthen their efforts to only enrol genuine students.

Now let’s explore who arrives in Australia in an average year during the last decade. Tourists are not included in this data. We might forget that Australian citizens are also counted in the migration data.

About 15 per cent of the migration intake each year are actually Australians returning home after a stint abroad. Another six per cent of the migration intake are Kiwis who are allowed to use Australia as their West Island and can essentially come and go as they please.

Together, Aussies and Kiwis make up 21 per cent (104,000) of our annual migration intake. Anyone thinking about slowing migration can’t possibly reduce this part of the intake.

The remaining 78 per cent of our migration intake are split between permanent visas (17 per cent) and temporary visas (61 per cent). Let’s discuss the permanent visas first.

People tend to be surprised by how few skilled permanent visas we hand out each year. Only 36,000 (seven per cent) of all visas are given to people with skills/qualifications that we don’t have enough of in Australia and order from overseas like you would order a burger from UberEats.

Considering we also lose 8000 skilled visa holders each year, we only plug 28,000 holes in our workforce through permanent skilled migration each year. Considering the skills shortage is baked into the demographic pie and won’t improve in the coming decade, this category is likely to grow rather than being cut down in the coming years.

Can we cut permanent family visas? They make up five per cent of all visas. We could theoretically tighten these visas but would come up against moral questions quite quickly. Surely the migrants that we allow into the country have a right to bring their kids and partners along, right?

Jobs for asylum seekers

What about all these asylum seekers then? Well, there aren’t all that many to begin with. We only take in 12,000 people on humanitarian grounds each year. Australia has legal obligations to fulfill to the international community as a signatory of numerous accords on displaced peoples.

Cutting down on this cohort is diplomatically difficult, plus we aren’t talking about big numbers here. Considering how bad the skills shortage will become, I’d expect more working rights to be granted to asylum seekers in the future. The lack of aged care workers could be softened by channelling asylum seekers into this field.

Temporary visas make up the biggest share (61 per cent) of our annual migration intake and account for 295,000 new arrivals. About half of this cohort are international students. If your goal is to reduce migration intake, this is the most obvious category to tackle. A tightening of language and academic regulations could minimise the annual intake of international students significantly.

That’s currently in the works. Obviously, dodgy degree mills must be shut down. How much can we slow down international student intake before we need to tax the population more?

Currently international students, through the exorbitant fees we charge them, very much subsidize local students. Losing international students means money must flow to these institutions from somewhere else.

Cutting down on working holiday visas (9 per cent or 68,000) would be madness. I still can’t believe how incredibly helpful this visa class is for Australia.

Young folks from overseas pay us a visa fee for the privilege of filling urgent job shortages in rural and regional Australia.

As if this wasn’t great enough, their wages immediately get reinvested into the local economy in the form beers, surfing trips, and hostel fees. Noone in their right mind would slow down this visa class.

Welcome, stranger

Temporary visitor visas also make little sense to cut. These are people who mostly live with family members (therefore don’t add stress to the housing market), or in hotels (which they pay for with foreign currency) and provide welcome cash injections into our economy.

They have no working rights and don’t impact our workforce. I don’t see any potential benefit by cutting visitor visas as they are essentially tourists who stay for longer.

Having looked at the different visa categories, I don’t see obvious fat to cut and remain convinced that future governments will continue to aim for annual migration arrivals of around 500,000 people. Last year’s intake of 737,000 migrants will remain an odd outlier.

Allowing an additional 100,000 migrants into the country or cutting the intake by 100,000 doesn’t change the main challenge of confronting us of significantly adding to the housing stock.

Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. His latest book aims to awaken the love of maps and data in young readers. Follow Simon on Twitter (X), FacebookLinkedIn for daily data insights in short format.

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