Top population man says Australia desperately needs skilled migrants

Peter McDonald, director of the Australian Demographic and Social Research Institute (ADSRI), has warned the Australian Government against shortsighted immigration decisions. McDonald says migrants will be the key drivers of economic growth over the next 40 years as millions of baby boomers move into retirement.

"In the next 20 years, immigration is the only means available to meet large aggregate labour demand in Australia," said Professor McDonald.

Immigration levels tended to move behind the economic cycle: highest when peak economic activity tips over into recession, and savagely cut just at the time more workers were needed to help rebuild the economy.

When the 1974 recession hit, net overseas migration was 87,000. The following year it was cut to 13,500 and only returned to 1974 levels in 1980. In the 1982-83 recession, net migration fell from 123,000 in 1981 and 103,000 in 1982 to 55,000 in 1983, only returning to 1981 levels six years later.

"Immigration has a long lag-time," Professor McDonald said. "Targets are set well in advance, visa grants often take a long time, and then the immigrant has many months to actually take up the grant. We shouldn't let the numbers drop off as dramatically as they have in past recessions. We should be evening out the peaks and troughs."

Immigration Minister Chris Evans has flagged cuts to the number of foreign workers allowed into the country in the wake of the global financial crisis, saying the Rudd Government is committed to protecting Australian jobs.

Professor McDonald’s modelling indicates the optimum number of migrants to maintain a growing economy in coming decades in response to the changes in age structure was about 180,000 a year.

"Migrants do provide their own economic stimulus," Professor McDonald said. "They come into the country with money, they spend it to buy houses and set themselves up."

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