A country’s ambition can be measured by its migration program. As birth rates decline, the ability for a country like Australia to enhance its capabilities will be reliant on its ability to import the skills it needs, and prevent itself from becoming an old country without the workers to afford to be old. In this regard Australia can be considered a mildly ambitious country.
It maintains a solid migration program, and within the federal government at least, there is an awareness of the domestic and geopolitical necessities for population growth. Last week the federal government released its new migration strategy.
There are a number of factors that make the necessary capability enhancements difficult to achieve. There are elements within the country who remain timid and fretful toward immigration – who see it as a threat, rather than an opportunity, and fail to understand the importance of Australia being a more active security actor in its region, and being able to develop new economic industries. These are things Australia is struggling to do with just 26 million people.
Alongside this, the country has an aversion to building – both in terms of housing and infrastructure – making the accommodation of population growth difficult. Australia clearly doesn’t lack land to build housing – and most of its main cities require serious densification – but the country has developed a political problem that makes it reluctant to build.
Many homeowners in Australia have become fabulously wealthy from the dramatic increase in value of housing in recent decades, and governments (federal, state and local councils) have accepted that these voters do not take kindly to any measures that would threaten this wealth through greater housing supply. Political parties lack the courage to stand up to these constituents, and politicians themselves are heavily invested in the property market and have an enormous self-interest in the over-inflated value of property.
The result has been a stark generational divide, where young people are priced out of the homeownership, often having to wait until their parents die to be able to afford property (and by this time they are not so young). With migration to Australia concentrated within the country’s main cities, this adds to housing pressures. Vacancy rates in these cities hover around 1 percent. It is a landlord’s market for renters, and a seller’s market for homeowners.
On infrastructure, Australia is notoriously slow and expensive. Project costs often balloon to ridiculous sums, and as a result, the federal government has recently canceled support for a number of projects, which will only add to the stresses on the country’s existing infrastructure. When projects are approved and commenced, there is a tendency to prioritize roads over rail – which counterintuitively only adds to traffic congestion rather than alleviating it, and does nothing to improve placemaking and culture within cities the way new rail lines do.
The new migration strategy has sought to balance the country’s compelling need for more people with its political and structural problems around housing and infrastructure (as well as try to placate those suspicious of migration). The first pillar of the strategy is to reduce numbers to what is being deemed “sustainable” levels.
Due to the backlog created by the COVID-19 pandemic, the net migration intake over the 2022-2023 financial year was 510,000 people. This figure for the forthcoming financial year (the end of June in Australia) is forecasted to be around 375,000 people, but from then on the government seeks to stabilize the numbers around 250,000 people per financial year.
In an attempt to reduce these numbers the government has decided to target areas where the system isn’t working the way it should. New laws and structures designed to combat worker exploitation effectively raise the bar on employee sponsorship, and skew the system more in favor of high-skilled people seeking permanent migration. Alongside this, there will be more stringent requirements for international students to meet certain standards, and the age for applications for graduate visas will be reduced from 50 to 35.
Part of this reorganization is not simply to reduce numbers, but to shift the overall character of the migration system away from temporary migration and toward permanent residence and citizenship. This is undoubtedly a positive initiative that provides people with a greater investment in the country and hopefully a greater sense of civic engagement.
This approach to migration demonstrates that the government is thinking seriously about how it utilizes the migration program to build the country’s capabilities. Yet a truly holistic approach would also involve having the courage to seriously address the country’s lack of housing affordability – which is a social cancer as well as a practical problem – and to overcome the “car brain” in relation to infrastructure, which prevents Australian cities from truly thriving as they grow.