Experts have warned Prime Minister Scott Morrison that his target of creating 1.25 million jobs over the next five years is impossible if the migration intake is reduced.
Late last year, Mr Morrison flagged a plan to cut Australia's permanent migration intake by about 30,000 due to public concern over congestion in big cities.
This week the prime minister was spruiking a pre-election pledge to create more than a million jobs over the next five years.
But Professor of Demography at the University of Melbourne, Peter McDonald, told SBS News that the two commitments were at odds with each other as younger migrants would be needed to help generate new jobs.
"It would be impossible to do without migration to reach that number the prime minister has talked about," he said.
"It's not just about the numbers, it's also about the nature of work. The nature of work over the next decade will change quite substantially.
"In order to accommodate that, it's younger workers who are able to accommodate, not older workers... but also migrants who are young. That is another important component."
Migrants create jobs
Professor McDonald said the construction industry could be in for some "short term pain", due to an ageing population.
"Migrants are the major source of new employment because Australians, we are facing a labour supply crunch, at the older ages we have a large number of people retiring from the labour force," he said.
"Probably two million people over a decade."
The immigration intake cap has been set at 190,000 since 2012-13. For most of those years, the real intake has nearly met the cap. But in 2017-18 the intake plummeted to its lowest level in a decade, with just 163,000 permanent arrivals – made up of both skilled and family visas.
Mr Morrison said he expected the cap would be lowered next financial year, due to a shift that will give the states the responsibility to set and justify their migration planning levels.
