Australia’s $9bn ‘elephant in the room’
Australia is at risk of damaging its global standing if it maintains its controversial closed border strategy, economists say.
The federal government's tough travel ban on India is the latest temporary restriction aimed at quashing the threat of overseas COVID-19 outbreaks.
But ahead of next week's budget, CEDA senior economist Gabriela D'Souza has warned the draconian measures could have an unintended cost.
"To continue our closed border policy is a threat to our commitment to globalism, especially as other countries begin to vaccinate the populations and open up their borders and welcome migrants," Ms D'Souza said on Tuesday.
Speaking as part of a pre-budget panel at the National Press Club, Ms D'Souza said there was a giant elephant in the room.
"Migrants, in short, are good for the budget," she said.
"How are you going to keep migration going, to meet your targets, when the borders are closed?
"That challenge will require our governments, at all levels, to think much more deeply and creatively about how to solve the problem."
Ms D'Souza said migrants provided vital skills to the labour market, were younger, worked for longer, and put "far more" into the tax system than they took out.
"Permanent skilled migrants are a net benefit to the budget, with an annual fiscal revenue of about $9bn over their lifetime," she said.
"It will help with the budget recovery process."
Ms D'Souza said the quarantine system needed a "rethink" because migration needed to return in a way that lowered coronavirus-related health impacts on Australians.
She said universities were also struggling because they couldn't have international students or hire senior lecturers.
"Purpose-built quarantine seems like our best bet for keeping Australia at COVID normal," Ms D'Souza said.
But Employment Minister Stuart Robert said Australians needed to "step up" and plug key workforce shortages.
"Even if we turn that migration tap on at the end of the year, it will be a number of months before you start seeing that flow through," Mr Robert told Sky News.
"This will be a big focus this year on skilling, employment, apprenticeships.
"Over the last five years 50 per cent of all jobs growth has been through migrants
"We have to confront this challenge as a nation without that migration lever, at least for the next 12 months."
In June 2020, Ms D'Souza's father died in India and she was unable to return to support her family in the aftermath due to the travel restrictions.
"No other advanced Western country has put in place such measures," she said.
"I hope that when the government makes these decisions about border shutdowns, they realise the sacrifices migrants and people who live parts of their lives overseas are being asked to make."
Economist Leonora Risse also told the event that the government needed to slash "all forms of pink tape" that get in the way of women's workforce participation.
"Economists have long been pointing out the ways that the tax and transfer system makes it financially unviable for women," Ms Risse said.
She warned that women who opted to work from home were put at a disadvantage compared with men returning to the workplace because research showed that career opportunities favoured those present in the office.
Originally published as Australia's $9bn 'elephant in the room'