We need more young bums on seats.
4 min read
Daily we see sombre images from conflict zones like Gaza, Ukraine, Haiti and along the Coup Corridor in Africa.
These evoke a mix of compassion and concern.
For many, the sight of fellow humans fleeing from violence and upheaval provokes empathy, yet it also sparks apprehension, particularly among residents of affluent and much more secure locales.
There’s a prevailing fear that a tide of refugees and migrants will soon breach their borders, a sentiment exacerbated by right-leaning politicians framing it as an “invasion.”
This fear has infiltrated the politics of wealthy nations – where once-unthinkable scenarios – such as Britain’s Conservative Party circumventing constitutional norms to deport asylum-seekers to Rwanda, have become disturbingly plausible.
And Donald Trump’s divisive rhetoric further stokes these anxieties, portraying undocumented immigrants as a threat to national security.
Australia’s refugee detention policy is not without its shortcomings.
However, a closer examination reveals a more nuanced reality.
Despite the alarming imagery and rhetoric, the proportion of the global population living outside their country of origin has remained relatively stable over the past six decades, hovering around 4%.
Whilst the total number of forcibly displaced individuals has seen a concerning uptick in recent years, reaching 1.4% in 2022, it pales in comparison to the post-World War II era.
In Australia – being a relatively young island nation – our proportion of residents born overseas is a much higher 30%.
Also, when it comes to Australia, we have seen a big increase in immigration during fiscal 2023, with some 518,000 new overseas arrivals. This is high compared to the 200,000 annual intake between 2000 and 2019.
Yet 370,000 (or 70%) of the total 518,000 net overseas inflow were overseas students, many of them returning to continue their studies cut short by the Covid lockdowns.
As my charts outline, overseas students make up a large part of Australia’s immigration intake these days.
Most of these new foreign students come from China and India.
Again, taking a universal view, contrary to the narrative of an impending crisis, most displaced individuals remain within their own borders, with only a fraction seeking refuge in wealthier nations such as the USA, Canada, Australia, New Zealand, and large chunks of Europe.
In fact, poorer countries bear the brunt of this burden, hosting nine times more displaced people with significantly fewer resources and less hysteria.
Yet, in the current political arena, fearmongering remains rife, with the populist right exploiting anxieties of overwhelming numbers to secure votes, while elements on the left advocate for open borders and unrestricted immigration, invoking concerns of cultural assimilation and societal cohesion.
A more enlightened approach to migration acknowledges two important truths.
- Firstly, mobility has historically been a catalyst for prosperity, offering safety and opportunity to those fleeing danger and fostering economic growth for host countries.
- Secondly, well-managed immigration can yield substantial dividends, attracting talent and entrepreneurship while alleviating labour shortages and bolstering innovation.
And yes, the key to the second point is well-managed.
Indeed, the potential economic gains of a more mobile planet are substantial, with some estimates suggesting that unrestricted movement could double global GDP.
At home, NAB has recently released a study note suggesting that half of Australia’s economic growth during 2023 was due to overseas student migration.
Australia’s annual GDP was 1.5%, with overseas students contributing 0.8% or 55% of the country’s economic grunt.
Moreover, much has been made of Australia’s falling GDP per capita – down some so 2.4% on last year – and much of this angst has been squarely placed on our recent high migration intake.
Yet not all the relevant overseas student economic numbers are captured in the ABS GDP data and when you do embrace the full impact of foreign students the fall in GDP per capita is a much milder 1.5%.
Furthermore, most overseas students study in, and around, our CBDs.
Their return has given a much-needed financial boost to struggling downtown businesses hollowed out by Covid and the work-from-home movement.
Yet realising these benefits necessitates a paradigm shift in governance, with policies that prioritise orderly and legal migration, coupled with robust border security measures and a streamlined entry process.
In the future changing weather patterns may further reshape migration patterns, albeit gradually, as domestic urbanization and demographic shifts temper mass movements.
Yet, amidst these transformations, rich countries like Australia stand at a crossroads and should be doing everything they can to harness the vitality and dynamism of youthful migrants.
The current average age of a new overseas migrant to Australia is 27 years of age.
This helps offset Australia’s aging population. Once you exclude our foreign intake, the national average age was much older than 45 as of last year.
Moreover, the natural increase – births over deaths – is on the decline.
Revisit our second chart.
We need more young bums on seats.
Ultimately, as we chart our course in an ever-changing world, it’s imperative Australia embraces a high level of annual immigration.
Almost all footfalls want to head westwards. I don’t read of people wanting to move to China, Russia, Iran, North Korea, or other dictatorial regimes.
Australia needs to seize the moment and source the best of the worldwide immigration pool as we can.
