Population growth: what role does immigration play?

Harriet Spinks and Elsa Koleth, Social Policy Section

Immigration and population growth

In 2009, Australia’s population grew by two per cent with Net Overseas Migration (NOM) accounting for 64 per cent of this growth and natural increase (births minus deaths) contributing 36 per cent. Migration flows are therefore a key factor contributing to population growth.

Given the significant growth in NOM in the last few years, it is not surprising that recent debate in Australia on the issue of sustainable population levels has focused largely on the role of immigration in contributing to population growth. However, in considering this issue it is important to understand what actually comprises ‘migration’ in the NOM data. NOM is the addition (or loss) to the resident population arising from the difference between those leaving Australia and those arriving, either permanently or on a long-term basis (in the county 12 months or more over a 16 month period). This includes long-term temporary entrants such as overseas students, New Zealand citizens, and Australian permanent residents or citizens returning home after an extended absence.

The largest contribution to NOM in recent years has not been permanent migrants, but people entering Australia on long-term temporary visas, in particular overseas students and temporary skilled migrants. Unlike the permanent Migration Program, temporary migration is not subject to planning levels or caps set by government. Governments also have no control over the numbers of Australian citizens and permanent residents leaving or returning to Australia. Similarly, New Zealand citizens enjoy free movement under the Trans Tasman Travel Arrangement. It is therefore important that the degree to which the government is able to directly impact NOM, through its planned Migration Program, is not overstated.

The migration program

Since 1945 Australia has run a managed Migration Program, under which places are allocated each year for people wanting to migrate permanently to Australia. The Migration Program comprises a skilled stream, a family stream and a special eligibility category covering former residents who had not acquired Australian citizenship and who seek to return to Australia as permanent residents. Humanitarian entrants (approximately 13 000 annually) are not counted under the Migration Program.

The Migration Program has evolved over the years from a focus on attracting migrants for the purpose of increasing Australia’s population to a focus on attracting skilled migrants in order to meet the labour needs of the economy. As a result, Migration Program planning numbers have fluctuated according to the priorities of the government of the day.

Migration Program outcomes since 2000
Migration Program
Year Family Skill Special
Eligibility
Total
(a) Planned.

Source: J Philips and M Klapdor, Migration to Australia since federation: a guide to the statistics, Background note, Parliamentary Library, Canberra, 2010.
2000–01 33 470 44 730 2 420 80 610
2001–02 38 090 53 520 1 480 93 080
2002–03 40 790 66 050 1 230 108 070
2003–04 42 230 71 240 890 114 360
2004–05 41 740 77 880 450 120 060
2005–06 45 290 97 340 310 142 930
2006–07 50 080 97 920 200 148 200
2007–08 49 870 108 540 220 158 630
2008–09 56 366 114 777 175 171 318
2009–10 (a) 60 300 108 100 300 168 700
2010–11 (a) 54 550 113 850 300 168 700

Over the last decade the planned migration intake increased steadily, with numbers reaching a record high of 190 300 in 2008–09, until 2009–10 when the planned intake was reduced to 168 700. It has been kept at this level for 2010–11.

Recent changes to the skilled stream of the Migration Program have been designed to shift the balance of the program away from ‘supply driven’ independent skilled migration towards ‘demand driven’ outcomes, in the form of employer and government-sponsored skilled migration. The intention is to enable the program to better target the skills needed in the economy and ensure that skilled migrants are employed in industries that have the highest need.

Temporary migration

Temporary migration, which is not subject to annual caps, has in recent times been driven largely by demand for labour and education services. Temporary skilled migration increased markedly between 2004 and 2008 as employers sought to fill skills shortages, but began to decline in 2008 in response to prevailing economic constraints. The number of overseas students coming to Australia has also increased dramatically in the past five to ten years, making international education one of Australia’s most profitable exports.

Close connections have evolved between permanent and temporary migration as temporary migrants have increasingly sought to apply for permanent settlement in Australia. By 2007–08 up to 40 per cent of visas in the permanent skilled migration program were granted to people who initially came to Australia as temporary migrants, largely Subclass 457 visa holders and overseas students.

Temporary migrants
Overseas students and business long stay (a) visa grants
Year Overseas students Temporary business (long stay) 457 visas
(a) Visa subclass 457.

Source: J Philips and M Klapdor, op cit.
2000–01 146 577 36 900
2001–02 151 894 33 510
2002–03 162 575 36 800
2003–04 171 616 39 500
2004–05 174 786 49 590
2005–06 190 674 71 150
2006–07 228 592 87 310
2007–08 278 180 110 570
2008–09 320 368 101 280

The Rudd Government introduced a number of reforms to the skilled migration program. These reforms attempt to manage the links that have evolved between temporary and permanent migration so as to ensure that they operate to serve Australia’s skills needs and contribute positively to the Australian economy. Substantial reforms to the skilled migration program were announced in February 2010, following a period of unprecedented growth in overseas students in the vocational education sector concentrated in a small number of trades such as cooking and hairdressing. The reforms made priority access to permanent migration contingent upon the achievement of concrete employment outcomes.

There is no doubt that migration flows are significant drivers of population growth in Australia. Managing migration in accordance with Australia’s population challenges and economic objectives will inevitably be a priority for the new parliament.

Library publications and key documents

H Spinks, Australia’s Migration Program, Background note, Parliamentary Library, Canberra, 2010 (forthcoming).

J Philips and M Klapdor, Migration to Australia since federation: a guide to the statistics, Background note, Parliamentary Library, Canberra, 2010. http://www.aph.gov.au/library/pubs/bn/sp/migrationPopulation.pdf

E Koleth, Overseas students: immigration policy changes 1997–May 2010, Background note, Parliamentary Library, Canberra, 2010, http://www.aph.gov.au/Library/pubs/BN/sp/OverseasStudents.pdf

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