Coronavirus has halted immigration to Australia and that could have dire consequences for its economic recovery

Coronavirus has halted immigration to Australia and that has experts worried about the country's economic and social recovery from the pandemic.

A general view of Bourke Street Mall at the Elizabeth Street end in Melbourne

A general view of Bourke Street Mall at the Elizabeth Street end in Melbourne Source: AAP

Australia's migration intake this year is expected to plummet due to coronavirus-induced travel restrictions and shutdowns, creating a raft of economic and social headaches set to prolong its recovery from the pandemic. 

Australia’s immigration program has played a key role in nearly three decades of essentially uninterrupted economic growth.

Due to border closures around the world, the total number of migrants who will make Australia home this financial year, both temporary and permanent, will be far lower than it has been in a long time.

Nearly 300,000 temporary visa holders have left Australia since the start of the year according to the federal government and there are predictions the country will miss out on another 240,000 would-be migrants by the end of the year. 

Researchers say that could cause a “demographic ripple effect” to last for some time because Australia will be relying heavily on migrants to rebuild once the pandemic has passed.

“We need immigration to survive this next stage of our future,” Australian National University demographer Liz Allen told SBS News.

“We have an ageing population with more people retiring from the workforce than people entering the workforce. That means we have fewer people contributing to our tax base, which pays for our vital services: our roads, our infrastructure, our hospitals, our schools – everything.

“Our migrant intake will help fill the gaps.” 

Intake 'lower than envisaged'

Australia’s 2019-20 permanent migration program will now fall well short of the cap of 160,000 places set by the federal government.

suggest around 240,000 fewer people could migrate to Australia over the next 12 months. 

A spokesperson for acting immigration minister Alan Tudge said while COVID-19 will clearly have an impact on the 2019-20 program, it was still too early to say what the final outcome would be.

“It will be lower than we envisaged given our borders are closed to all but Australian citizens and permanent residents,” the spokesperson said.

A visitor takes in the view from the Mt Coot-Tha lookout in Brisbane, Wednesday, April 29, 2020.
A lone visitor takes in the view from the Mt Coot-Tha lookout in Brisbane, Wednesday, April 29, 2020. Source: AAP

Permanent residency visa invitations , Department of Home Affairs data shows.

Just 50 invitations for skilled independent subclass 189 visas - which allow holders to live anywhere in Australia - were issued in April, compared to 1,750 in March.

Invitations for the subclass 491 visa, which requires migrants to live in regional Australia, fell from 300 to 50.

There were 2.43 million temporary migrants in Australia in December 2019, a number  fell to 2.17 million - a drop of 260,000 - in early April.

That number is expected to fall even further, with many temporary visa holders excluded from the JobKeeper wage subsidy scheme.

Prime Minister Scott Morrison told them to instead return to their home countries if they were not able to support themselves in Australia. 

With chief medical officer Brendan Murphy flagging last week that restrictions on international travel would , it could be at least that long until Australia starts welcoming migrants again.

University of Sydney migration expert Anna Boucher said the coronavirus crisis has laid bare how reliant Australia is on migrants, noting the 2019 federal budget papers showed the government’s much-touted surplus

“Without very high net overseas migration we would not have had a budget surplus,” associate professor Boucher said.

“There’s no way achieve that sort of net overseas migration this year with border closures and COVID-19.”

The pandemic-induced freeze on immigration comes after  - seven months before Australia recorded its first coronavirus case on 25 January 2020.

Associate professor Boucher said the pandemic could trigger a rethink of how heavily Australia relies on its migrants to fill gaps in the workforce.

“We have caps on permanent migration, and they’ve become more stringent in recent years, but we don’t have caps on temporary migration. It’s possible in future years the government will look at that. A lot of it depends on how we redeploy Australians." 

“We are in competition with other countries for migration, so if other countries have closures for as long as we do and we are still seen as providing opportunities, we might be able to bounce back to pre-COVID-19 levels.”

Economy to bounce back slower

Economists say the drop in migration will have significant economic consequences for Australia’s coronavirus recovery.

Migrants are workers, taxpayers, consumers and big players in the housing market. Many economists believe they also play a role in driving long-term innovation and productivity.

Population growth and economic growth exist side-by-side and migrants have “historically played quite a big role” in both, Grattan Institute CEO John Daley said. 

Digital market boards at the Australian Stock Exchange (ASX) in Sydney, Thursday, April 16, 2020
Digital market boards at the Australian Stock Exchange (ASX) in Sydney, Thursday, April 16, 2020 Source: AAP

“Real economic growth in Australia over the last couple of years has been around 2 to 2.5 per cent. Of that, almost one per cent has simply been the effect of migration,” he said.

“Every year on average there’s one per cent more people born overseas living in Australia than there were last year, [causing] a one per cent increase in the total Australian population. When you have a one per cent increase in the population, you get a one per cent increase in GDP, more or less. 

“In many quarters over the past couple of years Australia has had almost no economic growth apart from the growth in population, and of that growth, about two-thirds have been migrants.”

Mr Daley said economic recoveries were always slow and a shock "of this kind” means it’s likely to take the economy “several years” to completely bounce back. 

“Absolutely that will be accentuated in Australia by the fact there will be fewer migrants,” he said. 

Commsec senior economist Ryan Felsman said even just a 10 per cent reduction in overall migration numbers would remove a “significant tailwind” from the Australian economy.

“The longer our borders are closed, the more likely it is Australia will have a slower economic rebound than other countries,” Mr Felsman said. 

'An unsafe place'

Dr Allen said while Australia needed migrants to help rebuild post-pandemic, she said they may choose to live in other countries.

“At the moment we have a substantial number of temporary migrants who are not being supported or looked after. We take much from migrants [but] Australia is not meeting its reciprocal relationship here,” she said.

“That to me is concerning because what then happens is Australia could get a name for itself as being an unsafe place to be.

“Marry that with the rising racial abuse that people of Asian descent are experiencing, Australia will get a name for itself as an unwelcoming and unsafe place.”

A person walks in isolation as heavy rain begins to fall in Melbourne, Wednesday, April 29, 2020.
A person walks in isolation as heavy rain begins to fall in Melbourne, Wednesday, April 29, 2020. Source: AAP

Since the coronavirus outbreak began, Asian-Australians  and have been verbally abused in the streets. 

Associate professor Boucher said she was concerned racial abuse and xenophobia could increase as the economic ramifications of COVID-19 continue.

“Whenever resources are tight, there can be more conflict,” she said.

“Even when the economy was fairly buoyant, there was still tension. My concern is that will get worse now.” 

To try and support Australia's migrants through the coronavirus crisis, the federal government has introduced and relaxed various visa conditions. 

, Victoria and the have introduced their own measures.

Dr Allen said Australia needs to continue to look after its migrants.

“Without migrants in the short to medium term Australia’s longer-term future isn’t as certain," she said.

“Migrants helped us build this nation … and they will feature right at the core of Australia’s economic rebuild.” 

People in Australia must stay at least 1.5 metres away from others. Check your state’s restrictions on gathering limits.

Testing for coronavirus is now widely available across Australia. If you are experiencing cold or flu symptoms, arrange a test by calling your doctor or contact the Coronavirus Health Information Hotline on 1800 020 080.

The federal government's coronavirus tracing app COVIDSafe is available for download from your phone's app store.

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8 min read
Published 1 May 2020 at 5:50am
By Evan Young