Posted: 19 May. 2020 5 min. read

Migration…interrupted

Weekly economic briefing

As we move tentatively into the recovery phase from COVID-19, many aspects of Australia’s economy and society will continue to be affected. Our migration program – both temporary and permanent – is amongst those most significantly impacted. 

The international travel movement data released last week shows that closing Australia’s international borders has had the intended effect of protecting the country from inbound infection risk. In April 2020, we saw a 99% decrease in overseas arrivals from a year earlier, and a 97% fall in departures.

Source: Australian Bureau of Statistics

Clearly the restrictions are causing significant pain for businesses in the tourism and hospitality sectors across Australia. But these falls also reflect a massive decrease in long-term overseas movements. Detailed data from March – before the most significant restrictions were imposed – shows the impact on long-term arrivals and departures. This has been greatest in the number of Australian residents moving overseas, with departures 39% lower than March last year.

But it’s the movement of non-residents that’s of most note. Permanent monthly overseas arrivals (down 33% from March last year) hasn’t been this low since 1998 when Australia’s population was one third smaller. Similarly, arrivals of long-term visitors were 30% lower than a year ago, and departures of long-term visitors down 35% over the same period. These movements will, of course, get larger as data is released for April and May.

Source: Australian Bureau of Statistics

As the Prime Minister announced at the beginning of the month, Australia’s net overseas migration intake is expected to fall by 30% in 2019-20, and 85% in 2020-21 (compared with 240,000 people in 2018-19). Given that overseas migration has accounted for almost two-thirds of Australia’s population growth over the past three years, this will have a significant and enduring impact on the overall growth of our population and economy.

Australia has previously had a permanent migration target of around 160,000 new migrants per annum, and this has been a cap to limit inflows into Australia. However, for the next year, with heavy restrictions on international movements likely to stay in place for some time, it is likely to be much more of an aspirational target.

A range of sectors who will feel the impact of a much slower rate of net overseas migration into Australia – notably residential construction and retail. More broadly, Australia’s migration program has not only delivered benefits to the country by supporting demand – it has been integral in cushioning the impact of an ageing population, and in providing a range of skills to support economic growth which would otherwise have been in short supply.

Australia has had a strong migration program because it makes sense for us to do so – and it will make sense again on the other side of this crisis. Getting young, skilled migrants is a smart play for us and our future.

More about the authors

David Rumbens

David Rumbens

Partner, Deloitte Access Economics

David is a macro economist with extensive experience in applied economic and quantitative analysis of the Australian economy, along with considerable experience in labor market analysis.  David is a regular commentator on macroeconomic trends, and prepares a weekly economic briefing newsletter.

Ellouise Roberts

Ellouise Roberts

Associate Director, Deloitte Access Economics

Ellouise is an economist and demographer in the Deloitte Access Economics team in Canberra. She has more than 10 years of experience in population and labour market modelling, as well as qualifications and experience in project management.  Ellouise joined Deloitte Access Economics in 2013, following over seven years of experience in the Federal Government sector including at the Australian Bureau of Statistics (ABS) and the Federal Parliamentary Library.