Why Australia’s migration intake has shifted
I didn’t plan on writing a migration column this week, but sometimes the data gods (or the Australian Bureau of Statistics) bestow a generous gift on humble researchers and plans must be adjusted.
The best tool the ABS offers is called TableBuilder and allows users to ask questions from a complex dataset to build individualised tables.
Last week migration data was added to TableBuilder for the first time. Let’s ask a few questions of the data.
Today we shall compare migration patterns in the 17 quarters since the start of the Covid pandemic with the 17 quarters leading up to the pandemic – that’s 4.25 years on either side of March 2020. The latest available data point is the June 2024 quarter.
Let’s start with a basic observation. There has been no surge in migration intake since the pandemic. There has of course been a heavily reported recent spike in migration intake but once we look at averages to compare pre-pandemic (net in take of 1.06 million migrants over 17 quarters) and post-pandemic (1.09 million) data no spike is visible.
The last 18 months saw us take in about three year’s worth of international students – that’s the reason for the spike.
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The elevated migration intake of 2023/24 remains a useful political tool to create the sense of an ongoing migration crisis. Which in turn is a great diversion from problems that our political class could’ve tackled but didn’t.
In reality, in the last 17 quarters we took in only three per cent more net new migrants than pre-pandemic. Let’s leave the sensationalised headlines behind and have a look at the visa categories.
A quick glance at the table above shows us that we took in heaps more international students and much fewer temporary visitors – a like-for-like shift.
We utilise international students as cash cows and an increase in international student visas goes straight the to bottom line.
Temporary visitors are not allowed to work in Australia. Minimising this visa category makes sense from a macroeconomic perspective.
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We are experiencing a skills shortage and slow economic growth, so let’s increase the share of visas with working rights. International students are allowed to work at least some hours too.
The increase in the backpacker workforce (Temporary Working Holiday Makers) helps the agricultural and hospitality sectors.
A comparatively slower economy in New Zealand ensured that more of our Kiwi cousins made the trip across the ditch.
The surge of New Zealanders helped to fill jobs across Australia. We saw more Australian citizens leave the country since the pandemic than we did before. The data doesn’t tell us about the motivations, but we can speculate. Pent-up demand comes to mind first.
The pandemic created an excuse to rethink your priorities in life and now more people move overseas to see the world. The high cost of living in Australia (housing being the biggest issue) combined with the pandemic-induced acceptance of remote work might’ve convinced some Australians to work in a low-cost nation while collecting an Australian salary – the unfavourable exchange rate at the moment might’ve slowed down this trend a bit.
Migration numbers tend get reported in net terms. We subtract people leaving Australia from the number of people arriving in Australia. We use migration to grow our population base and usually experience positive net migration. Therefore, we take in mostly young migrants.
About 82 per cent of net new migrants are under 40. Or to put it differently, half of the new migrants are under 26.
We gear our migration system to take in relatively young people because we want them to be part of the workforce for a long time; pay for their own retirement by accruing enough savings in their super accounts; and of course, younger people tend to be able to assimilate to a new culture.
The most common year for a migrant arriving in Australia is 25. At that age, lots of postgrad students (32 per cent) arrive in Australia while some are already sufficiently qualified for a skilled visa (13 per cent). At 25, people still qualify for a working holiday visa (9 per cent). The data also includes 13 per cent Australians who return to down under from an overseas stint.
The most common year for a migrant to leave Australia is also 25. Weird but there is a simple explanation for this. This is when lots of people finish their studies. This is not just foreign-born students (16 per cent) but also Australians (33 per cent) who go on their big overseas adventure to collect work experience abroad.
There is more to be teased out of this fun dataset but that’s all we have time for this week.
Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. His podcast, Demographics Decoded, explores the world through the demographic lens. Follow Simon on Twitter (X), Facebook, or LinkedIn.
