Blaming Migrants Won't Fix Australia's Productivity Slump

News · 2026-09-21 · 4 min read

Migrants have become the easy target in Australian politics. Three parties are now competing to promise the smallest net overseas migration (NOM) figure, as though limiting arrivals were an economic plan in itself. It is not. It pulls attention away from the real issue: weak productivity that started before the current migration surge and will not be fixed by cutting it.

How big the surge really is

In the year to March, net overseas migration came to roughly 392,700, with migrants making up about 292,100 of that growth. That sits well above the average between the post-GFC period and pre-COVID, and far higher than the pace of earlier decades. Over the last four years the country has added about 400,000 people a year, or roughly 1,100 a day. Housing has moved with it: national median prices have risen by close to a quarter in that time, and congestion in the cities is plain to see.

Nobody argues with those facts. The argument is about what they mean.

Every camp has picked a ceiling

Each of the main political groups now has its own migration limit:

One Nation wants net migration below zero for three years, followed by a firm cap of about 130,000.
The Coalition ties its figure to how many homes get finished, which puts it near 170,000: in effect, "one migrant, one new home."
Labor has relabelled its own Treasury forecast as a target, with 245,000 this financial year easing to 225,000 the following year.

Take off the packaging and none of these is a real plan. They are responses to angry focus groups. People can see packed trains and climbing rents. They cannot see thin capital investment or flat productivity, so they vote against what is in front of them. That is a sensible reaction to a gap in information, and politicians are using that gap instead of fixing it.

Skilled workers are not the ones in the firing line

Here is the detail that matters if you are a South African tradesperson or professional looking at jobs in Australia for South Africans: all three parties still want to keep skilled migration, or even grow it. The cuts land almost entirely on temporary and unskilled arrivals. That means farm work locals will not take, and international students who keep universities afloat after governments cut their public funding. Reduce migration without fixing those gaps and you simply create fresh shortages in farming and higher education.

Ottawa chose investment over caps

Two days before Australia made its migration announcement, Canada handled a similar political squeeze in a very different way. Instead of opening with a cap on arrivals, Ottawa released a package built around productivity. Its "Productivity Mega Deduction" lets businesses write off far more of their qualifying capital investment in the first year, up from 15 per cent to 65 per cent. Qualifying spending covers data infrastructure, software, pipelines, rail, roads, aircraft and R&D assets. The government says this roughly halves the effective tax rate on new investment, from about 13 per cent down to 6.4 per cent.

Next to the tax change, Canada brought in a "one project, one review, one year" rule for approving major projects. That means one coordinated assessment in place of overlapping federal processes, with a fixed date for a decision.

In fairness, Canada is acting under pressure. A broken trade relationship with the US and heavy tariffs pushed it into this. Australia faces no shock like that from outside, only a slow productivity problem that is easier to look past.

The fix no party is selling

Weak productivity, not the size of the population, is what is really dragging down living standards per person in Australia. Since 2010, GDP has grown by around 2.4 per cent a year, yet GDP per person has inched along at only 0.5 per cent. Real disposable income has hardly changed and has even gone negative in some years. Migration figures make an easy villain because anyone can see and count them. Investment choices made in boardrooms are out of sight.

If Canada's approach pays off, it gives Australian leaders a model they have dodged so far: make investing cheaper and approvals quicker instead of making migration harder. A country that wants a growing economy and better-off individuals needs that far more than a lower arrivals number.

What this means if you are getting ready to apply

The talk of caps mostly targets temporary and unskilled arrivals, while every party says it backs skilled migration. Keep your trade certificate, any skills assessment paperwork and an IELTS or PTE score in order, so you are ready when a suitable sponsored role comes up.

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