Lexi Webster
Australia's population growth rate is largely controlled by the federal government through immigration quotas and incentives to have babies. Refugees have made up only 5-10% of Australia's immigration in recent years. Australia's population and labour force prospects are heavily debated topics. While polls show that more than two-thirds of Australians do not want any more population growth, government modelling shows that with 180,000 migrants per year, GDP per capita would be 12% higher in 2053 than if migration was zero over this period.
| Characteristics | Values |
|---|---|
| Population growth rate controlled by | Federal government |
| Controlled through | Immigration quotas and incentives to have babies |
| Refugees as % of immigration | 5-10% |
| Population growth driven by | Immigration |
| Australians wanting lower population growth | >66% |
| Australians wanting lower immigration | 69% |
| Population growth in 2016/17 | 77% in Sydney, Melbourne, Brisbane and their satellites |
| Population growth in regional areas | Likely to shrink |
| Population projections | June 2023 to June 2071 |
| Number of projections | 72 series |
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What You'll Learn
The impact of immigration on population growth
Australia has one of the highest proportions of migrants in the world. According to OECD data from 2019, 30% of the Australian population was born overseas, more than double the OECD average of 14%. This figure was only 23% in the early 2000s. Net migration has outpaced the rate of natural increase since 2006, accounting for more than 60% of population growth in Australia since then.
Immigration has significantly shaped Australia's population growth for decades. Immigrants in Australia tend to be younger and more educated than the native population, with a larger proportion holding tertiary qualifications. They are also more concentrated in major cities. In recent years, international students have dominated the skilled immigrants' selection, and this is likely to remain the case.
Immigration can have a positive impact on ageing populations. Government modelling shows that, with 180,000 migrants per year, GDP per capita would be 12% higher in 2053 than if migration was zero over this period. Immigration boosts patenting in Australia. On average, a one percentage point increase in the regional employment share of higher-educated migrants (those with at least a college degree) relative to total employment leads to a 4.8% rise in regional patent applications in the medium run (5 years).
However, the impact of immigration on the economy depends on the composition of the migrant population. Population growth, either through natural births or immigration, increases both supply and demand in the economy. More people create additional consumer demand and labour needs, boosting GDP. However, higher demand can also increase inflation, especially in poorly balanced sectors such as housing. On the supply side, population growth can also increase the labour force, but this depends on the characteristics and skill sets of the new entrants, as well as their ability to integrate into the local labour market.
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Population sustainability and climate change
Australia's population growth rate is largely controlled by the federal government through immigration quotas and incentives to have babies. Refugees have made up only 5-10% of Australia's immigration in recent years, and the country has been resettling refugees at one of the highest per capita rates in the world. This could continue under sustainable immigration quotas or even with zero net migration.
The country's population growth is driven by immigration, and polls show that more than two-thirds of Australians do not want any more population growth, with 69% wanting a much lower immigration rate. Despite this, government modelling shows that with 180,000 migrants per year, GDP per capita would be 12% higher in 2053 than if migration was zero over this period.
International students have dominated skilled immigrant selection in recent years, and this trend is likely to continue. Skilled temporary migration is the most effective way to fill labour shortages in regional areas in the short term. In 2016-17, 77% of Australia's total population growth was in Sydney, Melbourne, Brisbane, and their satellites. Net overseas migration to Western Australia fell from 51,000 to 13,000 between 2011-12 and 2016-17.
Over the next three decades, Australia's large cities are expected to experience major population growth, while many regional areas will likely face shrinking and ageing populations. This raises questions about what settlement patterns should be encouraged and whether population growth should be diverted towards smaller centres to ensure a "sustainable" Australian population.
To ensure population sustainability and increase resilience to climate change, strategic spatial policies are needed to address increasing spatial disparities. While regional growth plans emphasise the importance of local planning scheme amendments, they remain silent on how proposed infrastructures will be funded to realise the vision of a networked "state of cities".
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Population ageing and its economic effects
Australia's population ageing is expected to have a significant impact on its economy, and the country has been working to address the associated challenges. By 2047, around 25% of Australia's population is projected to be aged 65 and over, with the fastest growth within this group being those over 85. This ageing population will lead to a decline in labour utilisation and participation rates, as older people tend to work less. In fact, participation rates for those aged 15 and over are expected to drop from 65% to 57% by 2046-47.
To address these challenges, Australia has implemented policy reforms to improve labour force participation and productivity. The country has also benefited from higher projected participation rates for older workers, with an increase in the number of older workers (55+) in recent years. Additionally, immigration has played a crucial role in mitigating the effects of ageing on the economy. Immigrants contribute to the workforce before they reach older age groups, and their children and grandchildren further support natural population increase. Government modelling suggests that with 180,000 migrants per year, GDP per capita would be 12% higher in 2053 compared to zero migration.
The impact of population ageing goes beyond labour utilisation, affecting the pattern of demand and supply in the economy. Industries such as aged care and geriatrics will experience significant growth, while paediatrics and education services may see reduced demand. Additionally, the average age of voters will continue to rise, potentially influencing political decisions and policies. Australia's current population policy, which includes skilled immigration and temporary migration, plays a crucial role in addressing labour shortages and maintaining regional populations.
While Australia has made progress in addressing the economic challenges posed by an ageing population, it is important to remain vigilant. Ageing will likely lead to slower per capita growth and an increased overall share of the government in the economy. Despite improvements in the projected fiscal gap, the challenges of ageing are not behind us. Australia's population and economic prospects are closely linked to its population policies, and continued efforts are necessary to mitigate the economic effects of ageing.
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Population distribution and settlement patterns
Australia's population growth rate is largely controlled by the federal government through immigration quotas and incentives to have babies. Refugees have made up only 5-10% of Australia's immigration in recent years. Australia has been resettling refugees at one of the highest per capita rates in the world, and this could continue under sustainable immigration quotas, or even with zero net migration.
To address spatial imbalances and support regional areas, the Australian government should consider implementing policies that encourage settlement in smaller centres and regional areas. This could include improving urban transport infrastructure and planning and ensuring that population growth is directed towards regions with employment growth.
While there is a focus on growth in policy priorities, the needs of declining regions are often ignored. Regional growth plans remain general, and there is a lack of strategic policy thinking on managing existing and intensifying spatial imbalances. To achieve a more balanced settlement structure, policies must be place-specific and consider the unique potentials and challenges of different localities.
International students have dominated skilled immigrant selection, and skilled temporary migration can effectively fill labour shortages in regional areas. However, reducing international migration to large cities could negatively impact regions like Adelaide and Hobart, as their young people would be drawn to larger cities, replacing immigrants. Therefore, immigration policy should be flexible and responsive to labour market changes and skills needs.
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Population projections and future uncertainties
Australia's population growth rate is largely controlled by the federal government through immigration quotas and incentives to have babies. Refugees have made up only 5-10% of Australia's immigration in recent years. Australia has been resettling refugees at one of the highest per capita rates in the world, and this could continue under sustainable immigration quotas, or even with zero net migration.
Population projections are based on assumptions of fertility, mortality, and migration. These projections are created by the Australian Bureau of Statistics and span from 30 June 2023 to 30 June 2071. They are formulated based on demographic trends over the past decade and longer, both in Australia and overseas, and in consultation with national and state/territory experts.
These projections do not account for non-demographic factors such as major government policy decisions, economic factors, catastrophes, wars, epidemics, or significant health treatment improvements. Due to the unpredictable nature of future fertility, mortality, and migration rates, two or more assumptions are made for each component, resulting in a range of possible future outcomes.
The Australian Government acknowledges that the Covid-19 pandemic has introduced significant uncertainty around future population projections. While it is assumed that net overseas migration will recover to normal patterns by 2024/25, the exact implications of the pandemic on population growth and distribution remain to be seen.
Australia's population and labour force prospects are heavily influenced by immigration. Government modelling shows that with 180,000 migrants per year, GDP per capita would be 12% higher in 2053 compared to zero migration. Immigration also helps to address labour shortages in regional areas and can respond to short and medium-term changes in labour demand and supply.
In summary, Australia's population projections for the coming decades are subject to uncertainties due to unpredictable demographic factors and non-demographic variables. The impact of the Covid-19 pandemic on population trends is still being evaluated. Immigration plays a significant role in population growth and has positive effects on the economy and labour market.
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Frequently asked questions
Many Australians are concerned about the country's ongoing population growth. Polls show that more than two-thirds of Australians do not want any more population growth and would prefer a lower rate of immigration, which is a major driver of this growth. There are also concerns about the impact of population growth on the environment and sustainability, as well as the ability to maintain liveability and competitiveness.
Australia's population growth is influenced by a combination of factors, including fertility rates, mortality rates, and migration. International migration plays a significant role, particularly in major cities like Sydney, Melbourne, and Brisbane, which experienced high total population growth in 2016/17. Immigration also has a positive effect on GDP and can help address labour shortages in regional areas.
There have been discussions about population projections and settlement patterns, including the possibility of diverting population growth towards smaller centres to ensure a "sustainable" Australian population. The federal government influences population growth through immigration quotas and incentives to have babies. However, there are concerns about a lack of strategic policy thinking and the need for more comprehensive regional plans to address spatial imbalances and infrastructure development.
