Another ‘expert’ deflects population blame to foreign students

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By Leith van Onselen

Abul Rizvi, a former deputy secretary in the Immigration department, is the latest to blame the population crush afflicting Sydney and Melbourne on foreign students. From SBS News:

The real pressure on Australia’s highly populated east-coast cities was driven by a surge in international students, Mr Rizvi said, while the permanent intake had remained static for many years.

“Overseas students are the big factor that has grown as a portion of the net migration intake, and the vast majority of them do indeed settle in Sydney, Melbourne and Brisbane,” he said.

International students have grown as a percentage of temporary migrants – which also include temporary workers, working backpackers and tourists. There were 32,000 student arrivals in 2011-12, which skyrocketed to more than 100,000 in the year 2016-17.

Those students then become members of the 1 million people Mr Rizvi calls “long-term temporary residents” – those who have been in Australia for some time on various temporary visas, many of whom would seek to become permanent residents.

This is crazy stuff. The 2016 Census revealed that Australia’s population increased by a whopping 1.9 million people (+8.8%) in the five years to 2016, driven by a 1.3 million increase in people born overseas (i.e. new migrants):

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Sure, temporary migrants also boomed, and many would be captured in the above Census figures. But they increased by a relatively modest 382,000 over the past five years, with foreign students increasing by only 171,000:

Moreover, temporary residents are by definition temporary. Therefore, unless they can convert to permanent residency, they will have to leave. Thus, it is the permanent migrant intake that is the key driver of Australia’s population growth since this is what grows the population base over time both directly, as well as indirectly as these new Australian permanent residents have children (counted as ‘natural increase’).

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To really hammer the point home, let’s conduct a quick thought experiment. If Australia theoretically slashed the permanent migrant intake to zero, there would be three broad impacts on population growth:

  1. It would reduce the flow of temporary migrants, since many migrants enter Australia on temporary visas first hoping to transition to one of the many permanent non-humanitarian visas handed out each year (capped at 190,000). Eliminating permanent visas eliminates the probability of gaining permanent residency and, therefore, the incentive to come to Australia in the first place.
  2. The temporary migrants that cannot transition to permanent residency because the permanent intake has closed would have to leave Australia, thus significantly lowering net overseas migration (NOM) and population growth.
  3. Fewer permanent residencies means less migrants having children, thereby reducing natural increase as well.

In short, if the permanent migrant intake was hypothetically reduced to zero, then temporary migrants would have to leave, inflows would roughly match outflows (over the longer-term), and NOM and by extension Australia’s population would barely increase, according to Productivity Commission (PC) projections:

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Don’t just take my word. Demographer and population booster, Professor Peter McDonald, gave a CEPAR presentation in October whereby he also explained why the permanent migrant intake is the key driver of Australia’s population growth:

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So there you have it: temporary migrants are by definition temporary and will eventually have to leave. By contrast, permanent migrants stay indefinitely and have children, adding to Australia’s population base over time.

This is why the PC’s 2016 Migrant Intake Australia Report explicitly said that “Australia’s immigration policy is its de facto population policy”.

For Abul Rizvi to suggest otherwise displays grand ignorance or intellectual dishonesty.

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One final point: Sydney’s and Melbourne’s population surged by around 950,000 and 1.2 million respectively over the 13 years to 2017, just as the immigration floodgates were thrown open:

They are also projected by the ABS to balloon to around 10 million people over the next 50 years under the medium (Series B) projection:

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Do you think this population explosion will be caused by temporary foreign students or migrants staying permanently in Australia and then having children and later grand children? The answer is obvious.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.