Fewer migrants, higher taxes

Ageing countries such as Australia that reduce immigration face higher taxes and recurring budget crises, the Organisation for Economic Co-operation and Development warns.

The warning comes as both the Labor Party and the Coalition exploit immigration fears in the marginal seats of western Sydney and south-east Queensland, which could decide next month’s federal election.

In its latest migration outlook, the OECD says the number of people moving to member countries fell by 6 per cent in 2008 to 4.4 million people, as the global financial crisis ended a five-year run of double-digit increases.

That year, 205,900 people settled in Australia permanently – as a percentage of the total population, the fourth-highest rate of permanent immigration among developed countries – with an additional 300,000 people arriving to take up temporary jobs.

While the intake of permanent migrants fell marginally the following year, local employers requested 40 per cent fewer temporary workers.

However, a pick-up in the economy in the first half of 2010 has more than one-quarter of employers complaining to the latest Australian Industry Group and Deloitte National CEO Survey of being unable to fill positions. Alarmingly, over half of these unfilled positions are preventing businesses from expanding.

The survey also finds that over a third of businesses consider there is a high to extreme risk of skills shortages “impacting on effective operation” in the next six months, rising to almost half in five years’ time.

The OECD estimates that if net annual migration falls to 100,000 from the past average of 180,000 a year, Australia’s working-age population will grow by just 6.4 per cent over the next decade, down from 13.4 per cent between 2000 and 2010.

“Current economic difficulties will not change long-term demographic trends and should not be used as an excuse to overly restrict immigration,” says OECD secretary-general Angel Gurría . “It is important that immigration policy has a long-term perspective.”

BRW

Comments (0)