The budget papers have revealed the anticipated surge in Australia’s net overseas migration, which is expected to reach 400,000 in 2022-23, is a response to the pandemic-induced slowdown and is projected to be a temporary phenomenon.
According to the papers, the forecast for 2024-25 is 260,000, which is consistent with the long-term historical average of 235,000.
The forecast is for almost 1.5 million migrants over the next five years.
Property Council of Australia Chief Executive Mike Zorbas said the budget papers showed the strength of migration but also the extent of the housing supply crisis in Australia, with dwelling investment levels predicted to drop significantly, revised down from a forecast minus one per cent growth to minus 3.5 per cent in 2023/24.
“Skilled migrants have been central to Australia’s economic success story for generations, filling critical job vacancies in important sectors, and making valuable contributions both economically and socially,” he said.
“The population growth outlined in this budget highlights the need for faster and better housing delivery and planning across our cities. The Senate should strongly consider passing the government’s Housing Australia Future Fund this week to end current delays in delivering 40,000 new social and affordable homes across the nation.”
According to the projections, population growth in Australia is expected to increase by two per cent in 2022-23 and 1.7 per cent in 2023-24, surpassing the previously estimated 1.4 per cent.
This uptick is largely due to an anticipated net overseas migration of 400,000 in 2022-23 and 315,000 in 2023-24. However, the budget claims this surge in migration is likely to be temporary and will return to normal levels by 2024-25.
Despite the large uptick in migration, it is predicted that total net overseas migration will not rebound to pre-pandemic levels until 2029-30.
Even with the expected increase in migration, the budget projects that net overseas migration will still be 315,000 lower than pre-pandemic levels by June 2023 and 215,000 lower by June 2024.
Moreover, due to revised fertility assumptions in early 2020, the total population is still anticipated to be 750,000 people (2.5 per cent) smaller in June 2031 compared to pre-pandemic forecasts.
The budget included efforts to deliver a more efficient migration system by:
- Raising the Temporary Skilled Migration Income Threshold from $53,900 to $70,000 from 1 July
- Providing an extra two years of post-study work rights to Temporary Graduate visa holders with select degrees, to improve the pipeline of skilled labour in key sectors
- Provide an additional $48.1 million over 12 months to support 500 visa processing officers.
- Provide $9.1 million over 12 months to ensure the continued delivery of Youth Transition Support services, which improve employment, education and social connections for refugees and vulnerable migrants aged 15 to 25.
Mr Zorbas said the government has made changes to international student visa settings and employment rules, acknowledging how critical international students are to the economy, but we need to explore new measures to help grow the supply of purpose-built student accommodation to relieve pressure on the private rental market.
The government will now grant international students two years of post-study work rights to higher education graduates of Australian institutions with eligible qualifications to strengthen the pipeline of skilled labour, commencing 1 July 2023.
The work hour cap for international student visa holders will be reinstated from 1 July 2023 to 48 hours per fortnight. International students working in the aged care sector will be exempt from the 48 hour per fortnight work limit until 31 December 2023.
The increase to post-study work rights is estimated to increase receipts by $800 million, and increase payments by $185.6 million, which includes a $185 million increase in GST payments to the states over the five years from 2022–23.