A re-elected Coalition government would have to slash net migration of students and temporary skilled workers by 90% to reach its “impossibly heroic” goal of reducing net migration to 160,000 next financial year, a Guardian analysis shows.
Given the practical and legislative barriers to achieving such swingeing cuts, several experts told Guardian Australia that Peter Dutton has no realistic pathway to delivering a key election commitment days out from Saturday’s polls.
The director of the ANU’s Migration Hub, Alan Gamlen, said there was “almost no chance” that Dutton’s migration target would be met but “that doesn’t make such a rhetorical target any less useful as a political strategy”.
“Impossibly heroic net migration targets are a textbook feature of election campaigning around the world,” Gamlen said.
The Liberal party had “created a name for themselves as tough on migration, such as via their asylum seeker strategy, but behind the scenes presided over an historic expansion of temporary migration,” he said.
For example, nearly 80% of working holiday agreements with other countries were signed by Coalition governments.
“One of the key reasons why we can’t control net migration, and a big reason why they will miss the target, is because people are entitled to come into Australia under working holiday agreements and which they can do nothing about without breaking international agreements.”
Even if practically and legislatively possible, the scale of the cuts would have dire consequences for the economy, the budget, and businesses already struggling to find workers in a tight labour market.
The collapse in foreign student enrolments would also blow a hole in the profitability of major universities, which have become hugely reliant on high international fees.
What has the Coalition promised?
Peter Dutton has linked the surge in net migration over recent years with the housing crisis.
“We’re going to cut migration and we’re going to stop foreign buyers from owning Australian homes and competing against young Australians in a very tight housing market,” Dutton recently declared.
When it comes to migration policy, he has made two promises.
The first is to cut the permanent migration program by 45,000 to 140,000 in 2025-26. The permanent migration target would increase to 150,000 in the following two years, and then 160,000 after that.
That reduction would include a cut in the humanitarian program from 20,000 to 13,250, and after ruling out parent visas, the balance of the cuts would need to come from the skilled program. As we have written, this would upend a longstanding and bipartisan commitment to prefer skilled workers in the permanent migration program.
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A separate, but related, commitment has more immediate and potentially dramatic consequences.
That is a committment to cut net overseas migration – the balance of people coming in and out of the country – to 100,000 below Labor’s estimate of 260,000 in 2025-26.
This Net Overseas Migration figure, or Nom, is the key one used when assessing the short-term impact of migration on sensitive areas such as housing costs and the demand for essential services.
It is this last commitment that – according to the numbers – looks virtually impossible.
The numbers on Nom
About seven in 10 recipients of permanent visas are typically already in the country. On that rule of thumb, a cut to permanent migration of 45,000 would only reduce Nom by a much smaller 13,500.
So when the Coalition talks of cutting permanent migration as a short-term fix to expensive housing, it is worth keeping this in mind.
Which means cuts in temporary net migration will have to bear the vast majority of the cuts if the Coalition is to reduce Nom from 445,640 people in 2023-24 (the latest full financial year) to just 160,000 in 2025-26.
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And the task get harder. Under pressure from the Nationals, Dutton has also carved out working holidaymakers from the cuts, which accounted for nearly 69,000 net migrants last financial year.
Excluding that sizeable group means the required 270,000 drop in temporary net overseas migration by 2025-26 needs to come from a pool of 291,990 students, skilled temporary workers and visitors in 2023-24.
In this scenario, international student Nom collapses from over 176,000 in 2023-24 to 1,375 in 2025-26. That is also a fraction of the pre-pandemic level of 96,900.
Assuming the 90% reduction is evenly applied across the available categories, net visitors arrivals would fall from 72,500 in the last financial year to just 5,500 in 2025-26.
Of major concern to employers is the implied drop in temporary skilled net migration, from just shy of 42,000 in 2023-24 to 3,200 two years later.
How likely is this to happen?
While the numbers suggest slim hope of achieving Dutton’s net migration target, a Coalition spokesperson said: “We anticipate the actions we have committed to will reduce Nom in our first year relative to Labor by 100,000, with Nom continuing to run well below Labor in the following years”.
The spokesperson did not specifically address Guardian Australia’s analysis.
And given the Albanese government failed to legislate its caps to foreign student numbers (and which Dutton opposed), slashing net foreign student arrivals by 90% in just two years is farfetched.
Business groups would revolt at the slash and burn of the skilled migration program and economists have already warned that using migration policy as a tool to reduce pressure on housing costs comes with a raft of economic consequences.
A Dutton government could achieve a drastic reduction in net overseas migration by somehow driving visa holders out of the country. Short of another pandemic or deep recession, that also seems implausible.
Abul Rizvi, the former deputy secretary of the immigration department, said he could not see a credible pathway for the Coalition to deliver on its commitments.
He said there was an annual net migration threshold of about 260,000 and if a govnerment tried to push below that level “you are just creating too many problems for the economy as a whole, as well as lots of problems for a lot of industries”.
There is also the prospect that the net outflow of Australian citizens (assumed for this analysis) could reverse if the US president’s trade war smashes the world’s biggest economy.
“If Trump has his way in America, then a large number of expats will come home,” Rizvi said.
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Patrick Commins is Guardian Australia’s economics editor
