Australia is considering a policy it has never implemented: deliberately driving net overseas migration into reverse. Historically, extended periods of more people leaving than arriving have only occurred during economic collapses, wars, and pandemics.
For instance, a depression in the early 1890s pushed annual net overseas migration below zero on average over the 15 years to 1906. Migration also reversed during the first and second world wars and the great depression of the early 1930s, when unemployment reached as high as 32% in 1932.
Unprecedented policy proposals
Mark Cully, an economist and author of Waves of Plenty: Immigration and the Making of Australia, says such a policy would be “unprecedented.” He notes that while governments cut the migration program in the 1970s, 80s, and 90s, they never tried to push the permanent migration program to zero.
Even in Canada, which is mid-way through a radical migration “reset,” net migration has not turned negative. Yet Pauline Hanson, One Nation’s leader, promises to engineer exactly that for three years if she wins government, arguing it would lower housing costs.
Potential economic consequences
According to One Nation’s own economic team, cutting the number of temporary migrants by 766,000 over three years would lower rental inflation by a total of 6.5%, saving the average renter $54 a week after three years, based on previous Reserve Bank research. Peter Tulip, a co-author of that RBA research, says One Nation’s forecasts were not “implausible and unreasonable,” given the scale of their plan.
However, Tulip, now chief economist at the Centre for Independent Studies, warns of other consequences: “There would be a big hit to exports [from the university sector] and also be a big hit to government revenue. So, economically, we would be worse off.” Cully is more blunt, stating that if net overseas migration went negative for three or more years, “I can’t see how it would mean anything other than a prolonged economic slump.”
Coalition's migration pledge
The Coalition has also pledged to slash overseas arrivals, with opposition leader Angus Taylor promising to cut net overseas migration to 100,000 a year in its first term if it won government. This compares to the current net overseas migration of 300,000 and the Albanese government’s target of 225,000. Taylor boasts this would be “the biggest cut to immigration in the history” of Australia, a claim experts agree with.
Business groups are concerned, as Australian employers have become reliant on millions of temporary visa holders—foreign students and skilled workers—as a source of relatively cheap and flexible labour, especially in aged and health care and agriculture.
Unbalanced migration system
Experts agree that Australia’s migration system has become unbalanced. A stable permanent migrant intake of 185,000 a year has been swamped by an unregulated and uncapped temporary visa system. Excluding New Zealanders and those on visitor visas, temporary migrants as a share of the total population has more than doubled over the past 15 years, from 2.9% in 2011 to 6.6%. Including Kiwis and tourists, the figure is more than 10%.
Hundreds of thousands of international students, temporary graduate and skilled visa holders, and working holidaymakers now stay for years without the protection of permanent residency. Cully says, “We now have an underclass in Australia, manufactured by government policy.”
Alan Gamlen, director of the ANU’s migration hub, argues that improving the migration system requires a scalpel, not a bludgeon. He says, “We need to focus on regulating temporary arrivals; we don’t have to slam on the brakes and crash the economy.” Gamlen also notes that “The economic effects are not what really is driving the migration debate,” and doubts One Nation would follow through on its pledges, saying, “One Nation’s plan is so far beyond the pale that even if they are elected I don’t think they will do it. I think what they are doing is talking tough; and if they do get in, when they fail to meet their migration targets they’ll then blame it on other people.”
