Australian immigration is a story as old as time. It’s as sure as sunshine in Queensland, dirt in the desert, and mullets in Melbourne. Immigration is the bedrock of Australian society. Most Australians are migrants in some respect, and collectively we generally appreciate the privilege and opportunity received as a result.
This, however, raises a question about what we expect from skilled migrants.
Australia relies on importing skills from overseas. Doctors, nurses, engineers, electricians, software programmers – we don’t have enough of them, so we bring them in.
In recent years, around 60-70 per cent of Australia’s permanent migration has been allocated to skilled migration, meaning if they didn’t have the skills, they may not have been allowed to migrate.
Around 9 per cent are humanitarian refugees, and the rest are mainly family members (parents, children, partners, etc.).
This is all good and well.
Without skilled migrants, we would have shortages and services we rely on would be impacted. Most people understand this and therefore accept the rationale for skilled migration, despite how growing multiculturalism reshapes Australia from a predominantly Anglo-Saxon society to a much more diverse one.
The risks and benefits of this are debated, but so far, Australia remains largely one of the top countries in the world to live in across most metrics.
That being said, Australia is a top country because of the investment and effort that goes into developing it. Big historical waves of migration occurred before the digital revolution, which meant people largely made a permanent commitment.
They left their lives behind and committed to a new life here with limited communication prospects.
That appears to have shifted in modern times, and may be influenced by the digital revolution.
We are so much more connected now that staying in touch with, or remaining obligated to, loved ones back home is increasingly expected.
When people migrate to Australia, there is a trade-off. People agree to utilise their skills in exchange for a higher salary and quality of life compared to their home country. Life in Australia is good; we get paid well, have good labour laws, sun, beaches, coffee, food, etc. Our lifestyle is enviable, and most foreigners recognise this.
The issue is whether we should expect skilled migrants to invest discretionary income back into the Australian economy.
In order for Australia’s population to grow, governments need to invest in infrastructure and services to support them. It’s a chicken-and-egg situation. Without the people, the economy won’t grow, but without economic investment, those people can’t be accommodated.
In order for the economy to keep growing, we need to import skills; to import those skills, we need to spend money; to accommodate more people, we need more people. It’s a fragile system, but it somehow works, and governments have the fun job of holding it together.
Given what Australians and the Australian government must invest to import skilled migrants, who agree to relocate of their own volition, what do we expect once they arrive?
Is it reasonable to expect that they use their discretionary income locally? Support small businesses, invest, participate, and help build Australia into an even better place to live?
Most people would presumably say yes.
However, many skilled migrants, especially from lower-income countries, send discretionary income overseas.
Unlike previous generations, today’s migrants are never truly disconnected from home. Smartphones allow family obligations to be carried in their pocket, making requests for financial support immediate and presumably difficult to ignore.
According to a report by Western Union, 67 per cent of migrants said sending money to family back home was a significant factor in migrating to Australia. In 2024, $38 billion was sent out of Australia in international remittances, about the equivalent of 2 per cent of GDP.
Despite our best altruistic aspirations, Australia can’t solve global poverty alone. Yes, alleviating poverty is important, but arguably, it is better coordinated through government-run programs and foreign aid.
As Australia increasingly looks to lower-income countries to import skills, do we need to be aware of the propensity to offshore discretionary income?
Would it be beneficial to implement requirements that incentivise skilled migrants to use more of their discretionary income in Australia and should this form part of the conversation about whether our migration settings are delivering the economic benefits we expect?
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