Cutting migration to ease housing costs could quietly push prices up elsewhere, if labour gaps go unaddressed.
Cutting migration to ease housing costs could quietly push prices up elsewhere, if labour gaps go unaddressed.
Immigration policy was back in the spotlight last week, as calls to reduce net overseas migration intensified. Debating migration policy to ensure it delivers the best outcomes for Australians is appropriate. But a troubling pattern in recent exchanges has been the implied assumption that changes to migration settings operate in a vacuum.
Arguments to dramatically cut headline migration figures are seductive, promising to support other policy goals like housing affordability. But changes at that scale also need to acknowledge and address the spillovers likely to follow elsewhere, particularly in the labour market.
Analysis from the Scanlon Foundation Research Institute, shared with CEDA trustees at its recent economic outlook series, found that inflation and economic conditions consistently rank as the top issue for Australians. Immigration, by comparison, comes in eighth.
Balancing the costs and benefits of any given level of immigration is a genuinely difficult task, says CEDA Chief Executive Melinda Cilento. “As the debate on immigration policy continues, transparency around what these trade-offs look like and how they will be managed needs to be the starting point for policymakers.”
The latest data available from the Australian Bureau of Statistics shows that in the 2022-23 financial year, 6.9 million jobs were held by migrants. These workers are playing an important role in filling labour supply gaps that domestic workers aren’t meeting.
Around one in five construction workers are migrants. Over one in three workers in healthcare and social assistance come from abroad. In transport and logistics, a sector already under cost pressure from the conflict in the Middle East, migrants make up nearly 40 per cent of the workforce.
Sweeping changes to Australia’s migration intake involve real economic trade-offs, with impacts likely to be sharpest in certain industries. Promised benefits from reduced immigration could come with a sting in the tail for the cost of living, if poorly designed policy leaves businesses unable to access the workers they need and prices rise as a result.
Analysis from the Scanlon Foundation Research Institute, shared with CEDA trustees at its recent economic outlook series, found that inflation and economic conditions consistently rank as the top issue for Australians. Immigration, by comparison, comes in eighth.
Balancing the costs and benefits of any given level of immigration is a genuinely difficult task. As the debate continues, transparency about what these trade-offs actually look like, and how they’ll be managed, needs to be the starting point for policymakers.
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