In order to boost its economy and sustain future growth, the migration levels of Australia needs to be increased by about 30% per year according to independent modelling by the Migration Council of Australia (MCA).
The higher migration numbers would boost Australia’s economy by $1.6 trillion, says a new report from the MCA who warned that reducing the migration intake would have a profound impact on labour participation, productivity, the national skills base and income. Without a strong migration program Australia’s economy will suffer and it will not hit its projected population target of 38 million by 2050 - the projected population target of the government’s intergenerational report.
‘What we get in terms of gains is quite amazing for Australia, and something that we should be encouraging,” MCA's CEO Carla Wilshire told the ABC.
“Migration will be adding $1.6 trillion to Australia's GDP. So in a single year, about 40 per cent of GDP will be owing, in some form, to the migration program that we run,” says Ms Wilshire.
She states that a healthy migration program is critical to address the country's fiscal deficit and the ageing population. The MCA notes that migration by 2050 will increase the labour market participation by 15 per cent. This is going to have an impact on fiscal revenues for government, because migrants are generally younger, more skilled and have a higher employment participation rate. Thus they contribute more to the tax base and rely less government welfare services.
“In fact, there's less of a spend per migrant in terms of government services. And so when you combine those two factors (tax contribution vs reliance on welfare), their impact is to contribute more in some senses to the government's fiscal bottom line,” says Ms Wilshire.
The MCAs report warns that if the government does not increase the migration program, or even worse, stop the migration program all together, the consequences would be very significant.
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