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As anti-immigration sentiment is politicised around the world, new arrivals to Australia are being portrayed as detrimental to the economy – when in fact the opposite is true. By Emily Barrett.
Everything that’s wrong with this immigration debate
On his London visit last week, after his meeting with British Prime Minister Keir Starmer, Anthony Albanese shared his thoughts on fighting the far right. Politicians, he said, must keep their promises on economics and immigration. He cited first Labor’s protection of working wages and conditions, and then 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.”
In their efforts to ring fence or recapture votes from the right, Albanese and Starmer have both taken tougher stances on immigration. For his part, Starmer has been lifting lines from Conservative MP Enoch Powell’s 1968 tirade, saying Britain risks becoming an “island of strangers”.
It doesn’t seem to be helping. While 13 per cent of British Labour’s 2024 supporters would now vote for Nigel Farage’s anti-immigration Reform UK party, according to the latest Ipsos poll, 20 per cent are split between the Liberal Democrats and the Greens, both of which favour more compassion to migrants.
If Albanese fears a similar fall from grace, he might reflect on Starmer’s mistakes. Keeping promises on the economy and immigration may be simpler if people understand how immigration supports a healthy economy.
In Australia, the Scanlon Institute’s latest social cohesion survey suggests the proportion of respondents who believe immigration is too high has risen to 49 per cent, from 41 per cent in 2019.
Of those people, 78 per cent believe immigrants drive house prices higher. That’s following an election campaign in which then Liberal leader Peter Dutton linked housing shortages to international students, leading both major parties to propose sharp cuts to intake.
Shadow home affairs minister Andrew Hastie attempted to exploit the issue in a lengthy Instagram post last week with the caption “The real reason you can’t afford a home” and a chart showing a spike in net overseas migration.
Net overseas migration – the sum of longer-term arrivals in Australia minus those departing – did surge to a record of 536,000 in 2022/23, as borders reopened after the Covid shutdowns. The following year, ending June 30, 2024, that number fell to 446,000 – a point not captured in Hastie’s chart – and budget figures project a further slide to 260,000 in the coming financial year.
Also not mentioned in Hastie’s post was that the spike was amplified by the number of people stranded in Australia, whose visas were extended – visas that will soon expire and lead to more departures.
In fact, researchers at the Australian National University have found those years of closed borders meant 636,000 fewer migrants came than expected – a shortfall that hasn’t been covered.
This is nothing to be celebrated, even if considered only from an economic perspective.
Overall, migrants to Australia pay more in taxes than they claim in welfare. Their consumption and spending supports the country’s growth.
The Coalition knows this, which is why, for years, and especially under the Howard government, it has maintained an expansive immigration policy.
A Treasury white paper released in the last year of the Morrison government looked at the budget impact of the permanent migrants from the year 2018/19 over the span of their lives in Australia. It found a per-person average positive contribution of $127,000 more than the overall Australian population – a total fiscal boost of about $20 billion.
“The Coalition has been far, 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,” says Alan Gamlen, director of the Australian National University’s Migration Hub.
Economics is obviously not the only basis for Australia’s migration policy. Humanitarian and family programs help fulfil human rights obligations and build community.
The fact that so many people assume migration is a drain on national resources reflects “a complete lack of imaginative storytelling about how an economy works”, says Rebecca Huntley, who is director of research at 89 Degrees East.
For instance, says Gamlen, despite the bipartisan political storm over international student numbers, there is no evidence of any link 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,” he says. Moreover, “international students aren’t competing in the housing market for the Australians who are feeling the pinch”.
The misinformation deflects attention from the far more pressing and politically difficult causes, such as a lack of supply, sky-high construction costs, or the generous incentives for investment such as negative gearing and low interest rates.
The age-old economic case for immigration across much of the developed world is demographics. The 2023 Intergenerational Report projected that over the ensuing 40 years “the number of Australians aged 65 and over will more than double and the number aged 85 and over will more than triple”.
Rich societies need to import enough workers to look after their elderly populations. “I cannot tell you how many people under 30 aren’t planning to have children, for a whole range of reasons,” says Huntley. “If that trend continues – and part of the reason is because of ridiculous housing prices, ridiculous inflation and climate change – what do you think is going to happen to this society?”
Anti-immigrant sentiment will only get worse if leaders can’t find ways to confront it. “My experience is this,” Huntley says: “Whatever the top anxiety people have at any one time, they will graft an anxiety about immigration on it.”
As for other misconceptions familiar to Huntley from her research, the idea that migrants “steal” Australian jobs was debunked in an OECD study that underpinned the Intergenerational Report. It found adding to the proportion of overseas-born people in an area’s population boosted the productivity of the local Australian-born workforce. It could also slightly improve the employment rates of the Australian-born workers.
The challenge for Australia is to allow people to utilise the skills they bring to the country. Highly skilled migration, says Gamlen, “brings new ideas and ways of doing things, new technologies which increase productivity”. The risk to productivity, he adds, is when businesses hire lower-skilled workers instead of investing in new technology.
The question leaders might consider, alongside whether it’s really in their longer-term interests to pander to anti-immigration sentiment, is how the issue has become such a focus of politics. The answer to that might help their own longevity.
J. D. Vance described the disruptive force of economic disenfranchisement a decade ago in his book Hillbilly Elegy, and he has exploited it all the way to the vice-presidency of the United States.
Yet even as the Trump administration further entrenches that inequality and the grift of elites, its attack on globalisation, via tariffs and protectionism, taps into a highly motivating anger among voters.
“The people who are most angry about immigration are really angry about globalisation, because they’ve been the losers from it,” Gamlen says.
“They were promised sort of huge efficiency gains and better standards of living as a result of global trade and global finance and global migration. What they saw was cosmopolitan elites taking all the profits of those efficiency gains.”
For most of the past decade, the share of large companies in Australia that pay no tax has topped 30 per cent. In January, Trump signed an executive order that pulled America out of a global agreement – made under the Biden administration and joined by Australia – on a 15 per cent tax floor for multinationals.
This sort of backslide in wealth distribution is what will most test the remaining centre-left warriors. As Brexit clearly showed, anti-globalisation and anti-immigration fervour cuts across the traditional political divides to forge new allegiances.
A well-communicated immigration strategy now would, most importantly, allow Australia to prepare for the critical and too-often overlooked problems to come. As identified in the Intergenerational Report, global heating and rising sea levels will continue to make parts of the planet uninhabitable, especially across the islands of the Pacific.
As Albanese was leaving London, news broke that Labor is secretly pouring more money into a detention facility on Australia’s former island colony of Nauru. A two-year contract extension for US operator MTC means the government will pay $790 million for the 105 migrant detainees it wants held there until 2027.
The economic argument is confounding.
This article was first published in the print edition of The Saturday Paper on October 4, 2025 as "Fantasy islands".
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