Budget and jobs growth would suffer if Australia cut immigration, Government report finds

Source: ABC News, 18/04/2018

Cutting Australia`s migration rate would cost the budget billions of
dollars, lower living standards and reduce jobs growth, according to
a report delivered to the Federal Government.
Key points:
• Joint Treasury-Home Affairs report states migrants deliver
economic dividend to Australia, contributing nearly $10b to budget
• If migration rate was cut, report warns workforce would begin
shrinking, resulting in lower GDP
• Only migrants found to cost budget over their lifetime are
refugees, those on humanitarian visas
The paper, prepared by the departments of Treasury and Home Affairs,
found the 2014/15 intake alone would contribute nearly $10 billion to
the budget over the next 50 years.
`Migrants deliver an economic dividend for Australia due to current
policy settings which favour migrants of working age who have skills
to contribute to the economy,` the report states.
`This, in turn, increases Australia`s GDP and GDP per person, with
positive flow-on effects for living standards.`
The release of the report coincides with a heated debate within the
Coalition about Australia`s immigration rate and increasing community
concerns about how quickly the country is growing.
Australia accepts up to 190,000 permanent migrants each year â€` most
of them skilled â€` but former prime minister Tony Abbott wants that
number halved to help lower the cost of living and reduce pressure on
infrastructure.
The report acknowledges a bigger population brings challenges,
including more congestion and demand for housing, and warns
infrastructure investment must keep up with the growth.
But it also warned a reduction in immigration would shrink
Australia`s workforce.
In turn, that would have far-reaching consequences for the economy,
including `significantly lower[ing] GDP and GDP per person than would
otherwise be the case`.
`Migration has been critical to growth in the Australian workforce in
recent years,` it states.
According to the report, recent migrants account for 65 per cent of
the new jobs that have been created in the past five years, which is
significant given that Mr Abbott made a pledge in 2013 to create a
million jobs in that time-frame.
Australia is on track to meet that million jobs target, but the
report makes it clear that it is mainly because of high immigration.
Report debunks myth that migrants `steal` Australian jobs
The report also counters claims that migrants are a drag on the
welfare system, revealing migrants are likely to pay more in tax than
they claim in social services.
And it found the existing labour market had been neither `helped nor
harmed` by migration, debunking the myth that migrants `steal`
Australians` jobs.
`[Migrants] offset Australia`s ageing population, improve labour
force participation and productivity, and help businesses to source
skills that are difficult to develop at short notice,` it states.
Skilled migrants granted visas in 2014/15 are expected to make a net
lifetime contribution of nearly $7 billion to the budget, while those
on 457 visas are expected to contribute close to $4 billion.
The only migrants expected to cost the budget over their lifetime are
those granted refugee or humanitarian visas.
While making the case for a big Australia, the report also carries a
warning that governments need to spend more money maintaining
existing infrastructure to keep up with the pace of growth.
`These pressures should not only be addressed by new infrastructure.
They should also include better use of existing infrastructure,` the
report states.