What if we halved migration to NSW?

Kim Johnstone
October 24, 2018

Today the NSW Premier Gladys Berejiklian said she wants immigration to the state halved and already businesses and universities have raised concerns about the impact of halving immigration to NSW. As a demographer, I’m interested in what impact halving immigration would have on NSW’s population.

When we talk about immigration, most people are referring to net overseas migration – that is the balance between people who come into Australia for 12 out of 16 months and those who leave Australia for 12 out of 16 months. It’s this measure of immigration I write about here.

As the chart below shows, net overseas migration has a history of going up and down with large peaks typically followed by lower levels. Large inflows that can drive a high net count (the balance between in and out flows) are often followed by people leaving again after a few years. While temporary migrants can transition to permanent migrants, they aren’t counted again in the migration data. Net overseas migration has been high in the past two years, but the levels are not as high as in 2008, and we’ve never seen levels over 100,000 of more in-migrants than out-migrants.

It’s also important to remember that NSW’s growth is not only driven by migration. Natural increase, the balance between births and deaths, also contributes to the state’s growth. NSW growth is an amazing success story as people continue to survive to older ages. The pressure of population growth on our health infrastructure is testament to this success.

NSW population growth 1982-2017 source: ABS

NSW population growth 1982-2017 source: ABS

Which migrants would we cut?

The practicalities of halving migration to NSW means we would have to cut the numbers coming in specific visa categories.

I’ve assumed that Australian Citizens wouldn’t be part of the regulation to halve immigration (even though they’re counted in the migration numbers when they leave for work or study and then return home after a few years).

The biggest net gains in NSW come from visas for higher education, visitors, working holidays (all temporary) and the permanent skilled migration visa. Looking at data for 2016-17, if we assumed the number of departures were about the same next year, to halve the number making up net migration we’d have to see a decline in higher education students from almost 38,000 to just under 24,000.

Visitors arrivals would need to go down by 10,000 from 29,000 to 19,000. We’d need to see 5,500 fewer working holiday makers. And the permanent skilled intake would need to decline by over 6,000 from its current level of 15,300.

Net-overseas-migration-1617

Net-overseas-migration-1617

What would happen in the future?

I ran a simple projection looking at what would happen to the NSW population if we halved migration. First, I assumed that the average net overseas migration for the past five years stayed the same into the future (77,630 people) and the other factors that drive population change also stayed the same both for the levels and age profiles (total fertility rate, life expectancy at birth and net interstate migration). I then changed net overseas migration to 38,815 to compare the difference.

Not surprisingly, halving immigration led to a smaller population in 20 years’ time – reaching 9.1 million compared to 9.8 million if we keep migration at current levels. This difference of 700,000 people is seen in the working ages with the number of people aged 20-64 years projected to grow to 5.7 million if migration levels stay the same as now, compared to 5.0 million if they are halved. Indeed, if migration is halved, my projection indicated there would be fewer people aged 25-34 in 20 years’ time compared to now.

Because the population of NSW has different age profiles across the state, with proportionately fewer working age people in regional centres and rural areas and a higher reliance on in-migration (from overseas and elsewhere in Australia) to maintain service delivery, we could expect to see disproportionate negative impacts in some areas if migration is halved. In Sydney, where a large number of migrants live on arrival to Australia, we would see a change in the age and cultural mix of our suburbs, particularly in those places with students.

Population policy for all population issues

Having an informed discussion about population is critical for NSW. But population is more than international migration – there is a constant flow of people between states, regions and within our towns and cities. Even with no migration, NSW would grow to 8.5 million people over the next 20 years. What we must consider is the mix of generations seen in each part of NSW and the different impact they have on how that community will grow into the future, including the types of jobs, housing and infrastructure it will want and need. Importantly, a population policy must reflect the fact that our planning needs to respond to the 7.9 million people who already call NSW home.

Not surprisingly, halving immigration led to a smaller population in 20 years’ time – reaching 9.1 million compared to 9.8 million if we keep migration at current levels. This difference of 700,000 people is seen in the working ages with the number of people aged 20-64 years projected to grow to 5.7 million if migration levels stay the same as now, compared to 5.0 million if they are halved. Indeed, if migration is halved, my projection indicated there would be fewer people aged 25-34 in 20 years’ time compared to now.

Because the population of NSW has different age profiles across the state, with proportionately fewer working age people in regional centres and rural areas and a higher reliance on in-migration (from overseas and elsewhere in Australia) to maintain service delivery, we could expect to see disproportionate negative impacts in some areas if migration is halved. In Sydney, where a large number of migrants live on arrival to Australia, we would see a change in the age and cultural mix of our suburbs, particularly in those places with students.

Population policy for all population issues

Having an informed discussion about population is critical for NSW. But population is more than international migration – there is a constant flow of people between states, regions and within our towns and cities. Even with no migration, NSW would grow to 8.5 million people over the next 20 years. What we must consider is the mix of generations seen in each part of NSW and the different impact they have on how that community will grow into the future, including the types of jobs, housing and infrastructure it will want and need. Importantly, a population policy must reflect the fact that our planning needs to respond to the 7.9 million people who already call NSW home.

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