Blame the federal government for soaring state debt

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There are two key reasons why the federal government loves running a high immigration program.

First, immigration stimulates the aggregate economy, as measured by GDP. Running a high immigration policy allows the government to claim that it is an effective economic manager, even when per capita GDP growth is negative (as it is right now) and individual living standards are falling.

Australian GDP growth

Second, immigration helps the government budget by boosting the number of workers, personal income tax receipts, and corporate tax receipts (via the larger economy).

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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.