Accounting giant KPMG has urged Australia to increase its annual skilled migrant intake to 350,000 to hasten economic recovery following the pandemic.
According to KPMG – a global Audit, Tax and Advisory services provider and one of the Big Four accounting organisations – raising the migration cap to 350,000 skilled migrants per year would inject $120 billion into the Australian economy and increase GDP by 4.4 per cent.
Moreover, enabling a mass increase in skilled migrants arriving in Australia would also expand the labour pool, stimulate demand, and reverse population decline.
Brendan Rynne, chief economist for KPMG Australia, spoke in favour of increasing migration to Australia and said overseas arrivals bring significant economic benefits.
He also added that migrants bring social and cultural benefits as well, which contributes to a truly multicultural society.
Migrants account for 10 per cent of Australia’s entire population, but more can be done in this regard, said KPMG.
In addition to KPMG, Australian business groups have also been calling for net skilled migration to be increased.
Leading business groups have urged the Australian government to raise the migration cap on permanent skilled migration to 200,000 from 160,000, as it would mitigate labour shortages across the country and boost economic recovery.
KPMG supported these calls, saying that increasing the intake of skilled migrants would inject more than $100 billion into the Australian economy.
While the Australian government has consistently refused to raise the migration ceiling, KPMG data shows that the country is set to fall below the population increases recorded for the decade to 2019.
Moreover, 540,000 fewer migrants would enter Australia over the next ten years if the current migration cap is not increased, which would drop the 10 per cent population share held by migrants, KPMG said.
Brendan Coates from Grattan Institute’s economy policy program said that while the number of migrants arriving is important, their skill levels influenced GDP more.
He said the biggest benefit of skilled migration was the fiscal dividend generated by foreign workers, as they paid more in taxes than what they received from the Australian government in public services and benefits over their lifetimes.
After the outbreak of Covid-19, Australia had closed its borders to international arrivals since March 2020.
Despite relaxing border restrictions in recent times, Australia’s population dropped by 40,000, with 100,000 more departures than new arrivals recorded in 2020-21.
Such an exodus of migrants during the pandemic resulted in Australia recording negative net migration levels for the first time since World War II.