AustraliaBudget relying on overestimated population growth figures, leading expert says

20:18  11 july  2019
20:18  11 july  2019 Source:   abc.net.au

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Budget relying on overestimated population growth figures, leading expert says© Provided by Australian Broadcasting Corporation The Government's upcoming surpluses rely on its immigration projections. (ABC News: Michael Barnett)

One of Australia's leading demographers believes the Government's Budget figures overestimate population growth.

A table of migration projection figures released through Senate estimates shows international student departures increasing only marginally over the next four years.

But Peter McDonald, a professor of demography at the University of Melbourne, said Australia could expect a surge in departures of students after they finished their degrees.

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"I suspect the numbers in this table may underestimate the student departures out to 2022," he said.

"That means net overseas migration will be lower than what is projected in these numbers, and then population growth will be lower."

Professor McDonald, who was invited to brief state premiers and the Prime Minister about population planning in December, added that slower population growth would have flow-on effects for projections of tax receipts, production and consumption — and ultimately the Budget's underlying cash balance.

The Government's upcoming surpluses rely on the projections used in preparing the Budget, including immigration.

Immigration Minister David Coleman and Population Minister Alan Tudge were both on leave and unavailable to comment.

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Treasurer Josh Frydenberg said in March that "population contributes to economic growth by simply having greater demand", but he emphasised this was not the only source of strength for the economy.

"If you look at the non-mining investment numbers in these national accounts, they are positive which shows that companies are feeling confident to continue to invest and to grow," he said.

Abul Rizvi, a former senior Immigration Department official, echoed Professor McDonald and said "somewhat faster growth in student departures is more likely".

He added that even the student arrival figures, part of the table produced by the Department of Home Affairs, might be optimistic.

"With Home Affairs having announced significant tightening of visa processing for VET [vocational] students from Nepal, together with a decline in offshore visa grants to students from China, the growth in students Home Affairs is expecting will need to come from other sources, particularly India," he said.

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Tension between growth and congestion

Prime Minister Scott Morrison announced a population plan in March, which is set to involve states .

Since 2016, the Government has reduced the number of visas granted in the permanent migration program from approximately 190,000 per year to 160,000.

Despite this permanent visa cut, migration projections in the Budget this year were significantly higher than previous years.

The April Budget assumed a net overseas figure of 271,700 in 2019. This figure was up by more than 40,000 compared to the previous Budget.

Labor's population spokesman Andrew Giles said the Liberals "have no real population plan".

"The Liberals talk a big game when it comes to reducing permanent migration but the facts tell a different story," he said.

Population projections used as part of the Intergenerational Report have consistently underestimated growth.

The Government has allocated about $6 million per year to a new Centre for Population within Treasury to provide detailed analysis and advice on population issues.

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Australian immigration projections at a glance

2018 2019 2020 2021 2022
Net overseas migration (NOM) arrivals
Temporary visas 340,600 359,100 365,200 368,800 371,500
Student 167,600 175,600 180,500 182,200 182,900
Temporary work skilled 28,400 33,200 33,000 33,500 34,000
Visitor 79,300 82,700 82,900 83,000 83,100
Working holiday 50,300 51,800 53,000 54,300 55,600
Other temporary visas 15,000 15,800 15,800 15,800 15,800
Permanent visas 90,700 87,900 87,600 86,800 86,700
Other (Aus/NZers) 109,600 111,300 110,800 110,000 109,200
Total NOM arrivals 540,800 558,200 563,600 565,700 567,400
NOM departures
Temporary visas 143,100 147,700 152,300 157,300 162,300
Student 57,200 59,600 62,000 65,100 68,200
Temporary work skilled 15,300 15,400 15,400 15,400 15,400
Visitor 17,300 16,300 16,100 16,100 16,100
Working holiday 23,300 24,900 25,900 26,400 27,100
Other temporary visas 30,100 31,500 33,000 34,300 35,500
Permanent visas 21,200 21,400 21,600 21,900 22,200
Other (Aus/NZers) 117,000 117,500 118,400 118,800 119,000
Total NOM departures 281,200 286,600 292,400 298,100 303,500
Net overseas migration(Arrivals minus departures) 259,600 271,700 271,300 267,600 263,800

Notes: The figures are based on "net overseas migration", an approach used to count residents, based onwhether people have spent 12 of the previous 16 months in Australia. The categories reflect the visas on which migrants enter Australia. A person who arrives on a visitor visa then switches to a student visa after three months will therefore count as a visitor in the table once they have spent 12 months in the country. When they leave, they will count as a student. Some figures do not add up due to rounding.

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