Treasurer Jim Chalmers says Australia’s net immigration levels are high because not enough people are leaving the country, rather than his government letting in too many.
His own department forecast in the May Budget that net levels of foreign immigration (incoming minus outgoing) would halve this financial year from their record levels.
But when asked why the numbers were still much higher than expected, Dr Chalmers suggested it was because very few people were moving permanently out of Australia.
“The biggest thing we’re seeing in terms of net migration abroad is outbound,” he told Sky News on Sunday.
“More people are staying and fewer Australians are going overseas, and that also impacts the net level of overseas migration.”
The May budget forecast net foreign arrivals would fall to 260,000 in 2024-25, down from 528,000 in 2022-23.
However, Australia’s net levels of overseas migration have barely budged from that record rate: data released last week shows that 509,800 migrants, on a net basis, flooded into Australia in the year to March.
The start of the new financial year has also had little effect, with 432,150 migrants moving to Australia in the year to July.
Treasurer Jim Chalmers (right with his wife Laura) now suggests that Australia’s immigration levels remain high because not enough people are leaving the country permanently.
Dr Chalmers suggested that the Treasury’s mid-year economic and fiscal outlook, due to be published in the coming weeks, will include updated forecasts indicating higher levels of immigration than anticipated in the Budget.
“As far as arrivals are concerned, we are more or less following what we expected, but as far as departures are concerned, that has been the big difference, and that is why there is likely to be a revision of those forecasts for net migration abroad due to those lower departures,” he said.
‘Arrivals are happening, departures are not, and that will affect the updated figures when we publish them.’
Permanent admission for 2024-25 is capped at 185,000, and this cohort includes skilled immigrants.
This also means that international students, classified as long-term arrivals, make up the majority of immigration to Australia.
The number of international student visa holders continued to grow last year, rising from 473,514 in January to 672,782 in October, data from the Department of the Interior showed.
The Institute of Public Affairs, a conservative think tank, estimated that Australia had, on average, 602,315 international students in 2023, with 65 per cent of them working and earning an average of $44,017 a year.
This is less than the full-time minimum wage of $47,627 because international students are restricted to 48 hours of work per fortnight during the college semester.
Education was Australia’s largest services export last year, worth an estimated $48 billion.
Only iron ore, coal and natural gas were more valuable to the Australian economy, data from the Department of Foreign Affairs and Trade showed.
International students, classified as long-term arrivals, make up the majority of immigration to Australia (pictured is the University of New South Wales)
But Kevin You, a senior fellow at the Institute of Public Affairs, said the value of education as an export was overstated by $17 billion because it included the amount of money international students spent in the local economy.
“The claim, reinforced in government documents, is based on the assumption that any expenditure incurred by international students while studying in Australia is an ‘export’,” he said.
‘This means that the expenditure of a student who works while studying and spends the money they earn locally in the Australian economy is classed as export income.’
Dr. You said international students were worth $31 billion, not $48 billion.
Education Minister Jason Clare last month announced a plan to cap international student arrivals at 270,000 by 2025.
Record levels of immigration have coincided with a housing crisis, with the rental vacancy rate in capital cities still at a tight 1.3 per cent.
