Budget relying on overestimated population growth figures, leading expert says

One of Australia's leading demographers believes the Government's Budget figures overestimate population growth.

A table of migration projection figures released through Senate estimates shows international student departures increasing only marginally over the next four years.

But Peter McDonald, a professor of demography at the University of Melbourne, said Australia could expect a surge in departures of students after they finished their degrees.

"I suspect the numbers in this table may underestimate the student departures out to 2022," he said.

"That means net overseas migration will be lower than what is projected in these numbers, and then population growth will be lower."

Professor McDonald, who was invited to brief state premiers and the Prime Minister about population planning in December, added that slower population growth would have flow-on effects for projections of tax receipts, production and consumption — and ultimately the Budget's underlying cash balance.

The Government's upcoming surpluses rely on the projections used in preparing the Budget, including immigration.

Immigration Minister David Coleman and Population Minister Alan Tudge were both on leave and unavailable to comment.

Treasurer Josh Frydenberg said in March that "population contributes to economic growth by simply having greater demand", but he emphasised this was not the only source of strength for the economy.

"If you look at the non-mining investment numbers in these national accounts, they are positive which shows that companies are feeling confident to continue to invest and to grow," he said.

Abul Rizvi, a former senior Immigration Department official, echoed Professor McDonald and said "somewhat faster growth in student departures is more likely".

He added that even the student arrival figures, part of the table produced by the Department of Home Affairs, might be optimistic.

"With Home Affairs having announced significant tightening of visa processing for VET [vocational] students from Nepal, together with a decline in offshore visa grants to students from China, the growth in students Home Affairs is expecting will need to come from other sources, particularly India," he said.

Prime Minister Scott Morrison announced a population plan in March, which is set to involve states having a greater say in how many migrants they receive.

Since 2016, the Government has reduced the number of visas granted in the permanent migration program from approximately 190,000 per year to 160,000.

Despite this permanent visa cut, migration projections in the Budget this year were significantly higher than previous years.

The April Budget assumed a net overseas figure of 271,700 in 2019. This figure was up by more than 40,000 compared to the previous Budget.

Labor's population spokesman Andrew Giles said the Liberals "have no real population plan".

"The Liberals talk a big game when it comes to reducing permanent migration but the facts tell a different story," he said.

Population projections used as part of the Intergenerational Report have consistently underestimated growth.

The Government has allocated about $6 million per year to a new Centre for Population within Treasury to provide detailed analysis and advice on population issues.

The centre will "help all levels of government and the community better understand how states', cities' and regions' populations are changing and the challenges that change presents", according to a recent job advertisement.

The Government is introducing two new regional visas in November to encourage more migrants to move to regions, as it seeks to reduce congestion in the major cities.

Notes: The figures are based on "net overseas migration", an approach used to count residents, based on whether people have spent 12 of the previous 16 months in Australia. The categories reflect the visas on which migrants enter Australia. A person who arrives on a visitor visa then switches to a student visa after three months will therefore count as a visitor in the table once they have spent 12 months in the country. When they leave, they will count as a student. Some figures do not add up due to rounding.

Source: ABC News (AU)

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