Analysing the benefits of resuming Australian skilled migration

Australian skilled migration

Analysing the benefits of resuming Australian skilled migration

On December 15, 2021, Australia reopened borders for fully vaccinated skilled migrants and international students after almost two years of pandemic-inspired border closures.

With the arrival of skilled migrants and international students, many benefits are expected to follow, such as growing wages and filling skills shortages.

Here, we take a look at three ways in which the Australian economy will benefit from the return of skilled migrants and international students to Australia:

Growing wages

As skilled migrants and international students make their way back to Australia following a lengthy period of border closures, economists are expecting wages to grow.

In what is one of the main selling points of Australia’s mid-year budget update, it is predicted that real wages in Australia will steadily be on the rise from June 2022 onwards.

Moreover, it is also expected that the impending wage increase will go hand-in-hand with growing migration numbers, which will roughly reach pre-pandemic levels.

Australian Treasurer Josh Frydenberg insisted that migration can grow alongside wages, and said that having a sensible immigration program will ensure a stronger labour market, which will help drive real wages up.

Moreover, Grattan Institute’s Danielle Wood said that it was great to see Australian borders reopen, and explained that the return of skilled migrants would lift Australia’s overall growth rate, which would, in turn, strengthen the economy.

Relieving skills shortages

Australian business groups have long been calling for resuming skilled migration, and now that borders are open, returning skilled migrants and international students can fill job vacancies and relieve the significant skills shortages that have befallen Australian businesses since the start of the pandemic.

Moreover, business groups are also arguing that forecasted migration numbers will still be short of what Australian industries need in terms of skilled employees, particularly in sectors such as IT and hospitality.

Australian Chamber of Commerce and Industry (ACCI) chief Andrew McKellar also backed the resumption of skilled migration to Australia.

He said that migration has benefitted the Australian economy for a long time, as it creates demand and strengthens the skills base of the workforce.

He also suggested that Australia should show more ambition and have greater levels of migration, saying that there was a strong case for a large intake of skilled migrants to make up for lost time during the pandemic.

Increased net migration

In 2020-21, Australia recorded roughly 100,000 more departures than new arrivals, and this downward trend in net migration is expected to continue in 2021-22 as well with 41,000 more people expected to depart.

Such a significant number of departures over arrivals during the pandemic caused Australia’s net migration to fall into negative levels for the first time since World War II.

However, with borders now reopened, it is expected that net migration will start climbing again from next year.

Australia is expecting a positive net migration of around 180,000 people in 2022-23, and about 213,000 people in 2023-24.

This trend is set to continue into the next financial year as well, with 235,000 more people forecasted to arrive than depart in 2024-25.

Given that net migration during the last pre-pandemic financial year (2018-19) was 241,000, it can be hoped that Australia will soon return to pre-pandemic levels of net migration in the coming years.