Australia is a “migration nation”. This line is repeated so often that it risks becoming meaningless.

The more interesting question is what type of “migration nation” we want to be. 

Do we want to be a country that treats migrants as temporary labour units, useful while demand is high and disposable when the political mood shifts?

Or do we want to be a country that invites people to build a life here, to put down roots, to buy homes, start businesses, raise kids, join clubs, pay taxes, and care about the future of the place? 

The changing nature of our migration system has made integration harder. 

Australia’s migration system in the postwar decades was overwhelmingly a settlement system.

In 1960, permanent settler arrivals accounted for about 79 per cent of all long-term arrivals. By contrast, in 2024-25 permanent visa holders made up only about 16 per cent of migrant arrivals. Temporary visas are now the norm. 

Visa categories are not perfectly comparable over the past six decades, but the historical direction is clear – mid-century migration was permanent, while today’s migration is temporary. 

When a young Italian migrant stepped off the boat in 1960, they expected to never leave Australia again. The motivation and incentive to build houses, start businesses, to invest blood, sweat, and tears into this country was big.  

Compare this to an Indian migrant today. They step off the plane on a temporary visa. Purchasing a house or starting a business is much harder on a temporary visa as all your efforts might be taken away from you again. 

The incentives to fully integrate into Australian society are smaller on temporary visas. 

This matters enormously because integration is not a magical cultural process that just happens in the background. Integration is shaped by incentives.

If you know that your future is in Australia, you invest in Australia. You improve your English, you build local networks, you understand local institutions, you take more interest in politics, you join community organisations, you plan your career around Australian needs and you raise children who are fully Australian. 

If you are kept on a temporary visa treadmill, your incentives are different. You still work, study, pay rent, pay taxes, and contribute to the economy, but you do so with one eye on the exit door. You cannot fully commit to a country that refuses to fully commit to you. 

Today we take in more migrants than we did in the 1960s. That’s no surprise once we remember that in 1965 our population was only 11.4 million, less than half of today’s count. 

But it comes as a big surprise to many when they learn that the absolute number of permanent arrivals was almost twice as high in 1965 (148,000) than in was in 2024-25 (88,000).  

This is the paradox of modern Australian migration. We have very high migration numbers, but low settlement certainty. We rely heavily on migrants (Teaser: Next week’s column will be on migrants in the workforce), but we often hesitate to tell them whether they are actually wanted long term. 

So, should we hand out more permanent visas? 

Yes. Not recklessly, not randomly and certainly not without planning for housing and infrastructure. But yes, Australia should issue more permanent visas. 

The debate often frames permanent visas as the risky option. I would argue the opposite.

A well-designed permanent migration system is less risky than an oversized temporary system because it gives both sides clarity. The migrant knows the deal.

The nation knows who is staying. Employers can invest in training. Communities can invest in integration. Governments can plan for schools, homes, transport, and hospitals. 

Temporary migration is not bad by definition. Many visas that we hand out are temporary by nature. International student visas and backpacker visas are the two most important categories.

A backpacker coming for a working holiday is not necessarily looking to become Australian. Fair enough. A student arriving for a three-year degree, however, is a very different proposition. 

Economically, Australia uses international students mostly as a revenue source.

Each international student pays about $40,000 in annual fees and creates an additional $35,000 in economic activity. This means minimising our international student population by 100,000, from 730,000 to 630,000, translates into foregoing around $7 billion in annual revenue.

Note that about a third of that is not delicious foreign money but comes from international students working in Australia – a loss of $5 billion would probably be a better bet. 

There should be changes to international student numbers. Photo: Getty

Our standing population of around 730,000 international students changes each year as roughly a third of them graduate and are replaced by roughly the same number of new students in the next year. 

How would I adjust the international student component in Australia? 

Tightening English language requirements and academic credentials should result in somewhat lower international student numbers – maybe even by as much as 100,000. In the process, the ratio of international students to local students would move closer to a desirable ratio. 

The research doesn’t give us a magic number, but it does point to a principle: International students must be numerous enough to internationalise the campus, but not so numerous that they form a separate campus. 

Academics usually refer to no more than a third of enrolments to be international. 

More importantly, I would ensure that international enrolments are linked to known future skills shortages in Australia.

I would offer international students in these crucial academic disciplines a clear pathway into a permanent visa. This way we fill our future skills shortages with qualifications that are by definition up to our standards and the workers come pre-integrated as they already spent three or more of their formative years in Australia. 

This is the sweet spot of migration policy. 

Get them young. Train them here. Let them work here. Let them stay here. 

A 19-year-old international student who arrives in Australia to study nursing, teaching, engineering, construction management, cyber security, medicine, aged care, or early childhood education is not just another temporary migrant. They are a potential Australian in formation. 

By the time they graduate, they understand the language, the workplace culture, the rental market, the transport system, the tax file number, Medicare eligibility rules, footy tipping, coffee orders, and probably say “yeah, nah” too.

They have friends here. They have professional networks here. They may have fallen in love here. They are not arriving cold into the labour market at age 32. They are already half-integrated before they receive their first full-time payslip. 

This should be treated as a national asset. 

Instead, we often treat international students as cash cows on the way in and a political problem on the way out. Universities want their fees. Employers want their labour. Landlords want their rent. Governments want their export income. But once students ask for a credible pathway to stay, the national conversation becomes nervous. 

This is backwards. 

The best international students in areas of national shortage should be exactly the migrants we want to keep. They are young, educated in Australia, already socially familiar with the country, and likely to spend their entire working lives contributing to our tax base. 

We should not make them jump through endless hoops, visa extensions, bridging visas, and arbitrary points-test uncertainty. We should say clearly: If you study in a field Australia needs, meet high English standards, complete your qualification, pass character checks, and find relevant work, there is a permanent place for you here. 

That clarity would improve the quality of applicants too. The world’s most ambitious young people are not short of options. Canada wants them. Britain wants them. Germany wants them. Singapore wants them.

The United States, despite its chaotic politics, still attracts them. If Australia wants to compete for young global talent, we must offer more than sunshine and casual work rights. We must offer a future. 

A clearly articulated student to permanent migrant pathway strategy makes it easier to justify high migration numbers to the public.

Currently, politicians are aware of our reliance on high migration numbers (to fill skills shortages, create income through uni fees, and pay income tax – which in turn makes up over half of each federal budget) but don’t defend the long-term average intake of around 230,000 net new migrants each year because they are afraid of a voter backlash.   

Of course, permanent migration cannot be separated from housing. The public is right to be angry when population growth runs ahead of dwelling construction.

A larger permanent migration program only works if it is matched by a serious housing supply agenda. More migrants without more homes is bad policy (that’s another teaser for next week’s column). More permanent skilled migrants plus more homes, more infrastructure, and better planning is nation-building. 

The housing shortage doesn’t change when we change visa categories. A permanent migrant needs to be housed just like a temporary migrant does. 

This is why the migration debate must mature. Calling for cuts to migration is easy and frankly too simplistic. Designing a migration system that deliberately prepares the nation for predictable skills shortages is the harder task. 

Australia should reduce the churn and increase the commitment. Fewer dead-end temporary pathways. More carefully selected permanent pathways. Fewer migrants stuck in limbo. More migrants invited to become full members of the national project. 

A temporary migrant fills a shift. A permanent migrant builds a life. Think about one job, let’s say an aged care worker. This position could be filled for 40-plus years by one permanent migrant who gets a chance to integrate fully into the industry and broader community or by dozens of temporary migrants who each work in the job for a few years and don’t get a chance to integrate fully. 

The postwar migration system was not perfect. Far from it. It had exclusionary elements, assimilationist expectations, and a limited understanding of multiculturalism. But it did understand one thing very well: Migration works best when it is tied to settlement. 

If Australia needs workers, taxpayers, parents, carers, entrepreneurs, and citizens, then we should stop pretending that temporary visas can do all the heavy lifting. We should choose our future Australians early, train them well, and then have the courage to let them stay.

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 podcast, Demographics Decoded, explores the world through the demographic lens. Follow Simon on Twitter (X), Facebook, or LinkedIn.