7 October, 2025
immigration-debate-economic-realities-and-political-missteps

During his recent visit to London, Australian Prime Minister Anthony Albanese met with British Prime Minister Keir Starmer and shared his views on combating the far-right political agenda. Albanese emphasized the importance of politicians keeping their promises on economic and immigration policies. He highlighted Labor’s commitment to protecting working wages and conditions, as well as maintaining strong border controls, referencing the Abbott-era policy of Operation Sovereign Borders. “We’ve continued to maintain a strong control of our borders. We have turned back boats. We’ve done things that we said we would do,” Albanese stated.

This stance on immigration mirrors that of Starmer, who has adopted a tougher approach in an effort to reclaim votes from the right. Starmer has echoed sentiments reminiscent of Conservative MP Enoch Powell’s 1968 speech, warning that Britain risks becoming an “island of strangers.” However, this strategy appears to be faltering. According to the latest Ipsos poll, while 13% of British Labour’s 2024 supporters would now vote for Nigel Farage’s anti-immigration Reform UK party, 20% are leaning towards the Liberal Democrats and the Greens, both of which advocate for more compassionate immigration policies.

Shifting Public Opinion and Economic Implications

If Albanese is wary of a similar decline in support, he might consider the pitfalls of Starmer’s approach. The complexity of keeping promises on the economy and immigration may be mitigated if the public better understands the economic benefits of immigration. In Australia, the Scanlon Institute’s latest social cohesion survey indicates that the proportion of respondents who believe immigration levels are too high has increased to 49%, up from 41% in 2019. Among these individuals, 78% believe immigrants drive up housing prices.

During the last election campaign, former Liberal leader Peter Dutton linked housing shortages to international students, prompting both major parties to propose significant reductions in immigration intake. Shadow home affairs minister Andrew Hastie attempted to exploit this issue in a recent Instagram post, captioned “The real reason you can’t afford a home,” accompanied by a chart showing a spike in net overseas migration.

Net overseas migration surged to a record 536,000 in 2022/23 as borders reopened post-COVID, but fell to 446,000 the following year, with projections of a further decline to 260,000 in the next financial year.

Hastie’s post omitted the fact that the spike was partly due to people stranded in Australia during the pandemic, whose visas were extended and are now expiring, leading to more departures. Researchers at the Australian National University have found that the years of closed borders resulted in 636,000 fewer migrants than expected, a shortfall yet to be addressed.

Economic Contributions and Misconceptions

From an economic perspective, migrants contribute more in taxes than they claim in welfare, supporting national growth through consumption and spending. Historically, the Coalition has recognized this, maintaining an expansive immigration policy, particularly under the Howard government. A Treasury white paper from the Morrison administration found that permanent migrants from 2018/19 contribute an average of $127,000 more per person than the general Australian population, amounting to a fiscal boost of approximately $20 billion.

Alan Gamlen, director of the Australian National University’s Migration Hub, notes, “The Coalition has been far more open to migration than Labor over the past quarter century. They’ve got to do that, because they’ve got to keep businesses happy.” However, the assumption that migration is a drain on resources reflects “a complete lack of imaginative storytelling about how an economy works,” according to Rebecca Huntley, director of research at 89 Degrees East.

Despite political rhetoric, there is no evidence linking international student numbers to higher property prices. “The surge in housing prices began in late 2020 when borders reopened after the first long lockdowns, and at that point, net overseas migration was at its lowest levels in more than a century,” Gamlen explains. “International students aren’t competing in the housing market for Australians who are feeling the pinch.”

OECD studies show that increasing the proportion of overseas-born individuals in a population area boosts local workforce productivity and can slightly improve employment rates for Australian-born workers.

Demographic Challenges and Globalization

The enduring economic case for immigration in developed countries is demographics. The 2023 Intergenerational Report projects that over the next 40 years, the number of Australians aged 65 and over will more than double, and those aged 85 and over will more than triple. Rich societies need to import workers to care for their aging populations. Huntley observes, “I cannot tell you how many people under 30 aren’t planning to have children, for a whole range of reasons. If that trend continues, what do you think is going to happen to this society?”

Anti-immigrant sentiment is likely to worsen if leaders fail to address it. Huntley asserts, “Whatever the top anxiety people have at any one time, they will graft an anxiety about immigration on it.” Misconceptions about job competition have been debunked by OECD studies, which show that migration can enhance local productivity and employment.

The challenge for Australia is to harness the skills migrants bring. Highly skilled migration introduces new ideas and technologies that boost productivity. The risk, Gamlen warns, is when businesses opt for lower-skilled workers instead of investing in innovation.

“The people who are most angry about immigration are really angry about globalization because they’ve been the losers from it,” Gamlen says.

For most of the past decade, over 30% of large Australian companies have paid no tax. This economic disparity fuels anti-globalization and anti-immigration sentiments, cutting across traditional political divides. A well-communicated immigration strategy is crucial for addressing future challenges, such as the impacts of global warming and rising sea levels, which threaten to displace populations, especially in the Pacific islands.

As Albanese departed London, news emerged that Labor is secretly increasing funding for a detention facility on Nauru. A two-year contract extension for US operator MTC will cost $790 million to detain 105 migrants until 2027. The economic argument for such expenditures remains perplexing.