Albanese government offers extraordinary excuse on why immigration levels are still high

Treasurer Jim Chalmers says Australia’s net immigration levels are high because not enough people are leaving the country, rather than his government letting too many in.

His own department forecast in the May Budget that net overseas immigration levels  – inflow minus outflow – would halve this financial year from record-high levels.

But asked why the numbers were still well in excess of that forecast, Dr Chalmers suggested it was because too few people were permanently moving out of Australia.

‘The main thing that we’re seeing in net overseas migration is actually when it comes to departures,’ he told Sky News on Sunday.

‘More people are staying and fewer Australians are going overseas, and that impacts on the net overseas migration level as well.’

The May Budget forecast net overseas arrivals falling to 260,000 in 2024-25, down from 528,000 in 2022-23.

Australia’s net overseas migration levels, however, have hardly budged from that record rate, with data released last week showing 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.

Dr Chalmers suggested Treasury’s mid-year economic and fiscal outlook, due for release in coming weeks, will include updated forecasts indicating higher immigration levels than what was forecast in the Budget.

‘When it comes to arrivals we’re more or less tracking as we expected, but when it comes to departures, that’s been the big difference, and that’s why there is likely to be a revision of those net overseas migration forecasts because of those fewer departures,’ he said.

‘Arrivals are coming off, departures are not, and that will impact the updated figures when we release them.’

The permanent intake for 2024-25 is capped at 185,000, and this cohort includes skilled migrants.

That also means international students, classified as long-term arrivals, make up the bulk of Australia’s immigration intake. 

The number of international student visa holders continued to grow last year, rising from 473,514 in January to 672,782 by October, Department of Home Affairs data showed. 

The Institute of Public Affairs, a conservative think tank, calculated Australia had 602,315 international student holders, on average, in 2023, with 65 per cent of them working and earning an average of $44,017 per year.

That is less than the full-time minimum wage of $47,627 because international students are restricted to 48 hours work per fortnight during the university semester.

Education was Australia’s biggest services export last year, worth an estimated $48billion.

Only iron ore, coal and natural gas were worth more to the Australian economy, Department of Foreign Affairs and Trade data showed. 

International students, classified as long-term arrivals, make up the bulk of Australia’s immigration intake (pictured is the University of New South Wales)

But Kevin You, a senior fellow with the Institute of Public Affairs, said the value of education as an export was overstated by $17billion because it included the amount of money international students spent in the local economy.

‘The claim, reinforced in government documents, is based on an assumption that any spending by international students while studying in Australia is an “export”,’ he said.

‘This means that the expenditure of a student who is working while studying, and spends the money they earn locally in the Australian economy, is classified as export revenue.’

Dr You said international students were worth $31billion and not $48billion. 

Education Minister Jason Clare last month announced a plan to cap international student arrivals at 270,000 for 2025. 

Record-high immigration levels have coincided with a housing crisis with the rental vacancy rate in capital cities still at an ultra-tight 1.3 per cent.