Independent modelling commissioned by the Migration Council of Australia warns about the dangers of reducing net migration.
The migration report comes as the government releases the five-yearly Intergenerational Report (IGR) which shows that migrants are expected to make up a smaller percentage of the population in coming decades.
The IGR provides a snapshot of Australia in 2055, when the population is tipped to almost double from 24 million today, to 40 million. The modelling shows Gross Domestic Product will fall and wage growth will slow.
The government assumes net overseas migration will remain stable at 215,000 people per year, down from a peak of 300,000 in 2008-9.
Currently, net overseas migration (new migrants arriving, minus Australians leaving per year) makes up 1 per cent of the national population, but that is expected to decrease to 0.5 per cent by 2055 under the IGR modelling. The modelling says Australia needs 250,000 migrants a year to boost the economy by $1.6 trillion by 2050.
But the alternate modelling from the Migration Council of Australia shows if annual migration was increased to 250,000 people, the economy would be boosted by $1.6 billion – a rise of $1,125 per person in Gross National Income.
Key findings of the Intergenerational report:
- Gross Domestic Product is tipped to fall to 2.8 per cent over the next 40 years, compared with 3.1per cent over the previous 40 years.
- By 2055 almost one in five people aged 65 will still be in the workforce, and around 40,000 people will make their 100th birthday.
- Wages growth is also expected to slow to 1.4 per cent, down from 1.9 per cent over previous years. By 2055 the average Australian can expect to earn $117,300.
- However, Australians are expected to be working much longer. By 2055 almost one in five people aged 65 will still be in the workforce, and around 40,000 people will make their 100th birthday.
- The report also makes a case for further cuts to government spending, particularly in health and social services.
- It warns if proposed budget measures do not pass the parliament, net government debt would reach 60 per cent of GDP.
- In contrast, if proposed policy was implemented, the net debt would be wiped by 2031-32.