Migration cut will cost NSW economy
New economic modelling commissioned by the Property Council of Australia shows a big detrimental impact on the NSW economy should a cut to net overseas migration of 50 per cent be implemented.
The modelling, conducted by economic specialists AEC, shows a loss to the NSW economy of $130 billion and more than 200,000 jobs over ten years.
“This research strikes a cautionary note for those suggesting migration to NSW should be cut, especially drastically,” Property Council NSW Executive Director Jane Fitzgerald said today.
“NSW relies on migration for its jobs, prosperity and growth. If migration is halved, 200,000 jobs will be at risk and there would be a $130 billion detrimental impact on the NSW economy.
“A better plan would be to better manage and plan for growth. To fast-track the strategic plans that have been developed over the past few years by the Greater Sydney Commission, Transport for NSW and Infrastructure NSW and to continue to roll out the massive infrastructure spend to deal with everyday issues like congestion.
“NSW tried the ‘Sydney’s full’ experiment once before and all it delivered was lower productivity, lower economic growth and sowed the seeds of the housing affordability crisis we have experienced over the past few years.”
The research has been released in advance of the Council of Australian Governments (COAG) meeting on Wednesday where migration is on the agenda. In October, the Premier suggested overseas migration into NSW should be halved to around 50,000 per year.
The headline figures of the research show:
- A modelled reduction of 54,500 migrants each year for the next ten years would negatively impact the NSW economy by approximately $130 billion (present value of $81.6 billion in GSP at 7 per cent discount rate).
- Between 2019-20 and 2028-29, there would be an increasing reduction in GSP in NSW, starting with a decline of $2.4 billion in 2019-20 and reaching a reduction of $24.3 billion by 2028-29.
- The reduction of $130 billion (over ten years) would be equivalent to approximately 25 per cent of the current NSW economy, and be roughly equivalent to removing the two largest sectors of the NSW economy (financial & insurance services and ownership of dwellings).\
- The change in migration would result in 200,000 fewer jobs and increase real wages in NSW by an average of 0.9 per cent (over the ten years).
“The choice in Sydney and NSW is not between growth and no growth, the only choice we have is between good growth and bad growth; the important thing is to focus on the issues and the policies that can make a real difference,” Ms Fitzgerald said.
“The Property Council believes engaging the community, industry and government in how to deliver ‘good growth’ should be the highest priority for the State Government in 2019.”
The research can be read here
Media Contact: William Power – 0429 210 982