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The September quarter of 2020 reset Australia’s population records – for the first time since World War I, the country’s population went backwards. It’s not surprising that this has been the result of international border closures, and in the September quarter alone, almost 35,000 more people left Australia than arrived. This resulted in the largest negative net overseas migraiton on record.
Those leaving Australia have generally been aged between 15 and 29 years of age. Many are international students who have completed their studies as would normally occur; only this time the outward flow hasn’t been offset by new arrivals. Ditto for working holiday makers.
The net outflow has resulted in a decrease in the number of 15 to 29 year olds living in Australia (compared to the year prior) for the first time in two decades.
Chart 1: Components of population change
Source: ABS National, state and territory population.
Historically overseas migration has been a large component of population growth for Australia and for many of the states and territories. The closure of international borders has also put a spotlight on interstate and intrastate movements. Victoria, which has benefited from strong interstate migration, has seen a shift away from the state. The June quarter represented the first negative net interstate migration figures for Victoria since 2008. As an offset, those jurisdictions that usually lose people to Victoria have seen more positive net interstate migration figures.
There is also discussion that people are leaving the cities for the regions, and while net movements from capitals to regions has increased in recent quarters, it doesn’t tell the whole story. The chart below shows the cause of this is fewer people leaving the regions rather than more people arriving in the regions. So, it’s not a story of people fleeing the cities, but rather a story of people staying in the regions.
Chart 2: Intrastate migration flows, year to
Source: ABS Regional internal migration estimates.
This distinction matters as COVID vaccinations pave the way for a return to normality. The risk for regional areas is that the new normal isn’t additional people fleeing the cities, it might be that those that have remained in the regions have only temporarily extended their stay and will still leave. So, regional Australia will need to focus on keeping current populations as well as attracting people away from the cities.
In the absence of net international migration, the competition between different areas of the country to both retain and attract people is likely to keep heating up.
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.
Shannon is an Economist working in Deloitte Access Economics’ Macroeconomic Policy & Forecasting team. Her interests include labour markets, skills modelling and populations. She is currently the lead population modeller for Deloitte Access Economics.