Australia's stalled migrant boom derails golden economic run
Sydney, June 1
Australia’s three decades of uninterrupted prosperity are coming to an abrupt end as the global coronavirus pandemic crashes one of its most lucrative sources of income — immigration.
The country has been successful in managing the outbreak and reopening its A$2 trillion ($1.33 trillion) economy, thanks in part to an early closure of its borders.
But the policy has led to a halt in mass immigration — a key source of consumer demand, labour and growth — in an economy which is facing its first recession since the early 1990s.
Net immigration, including international students and those on skilled worker visas, is expected to fall 85% in the fiscal year to June 2021, curbing demand for everything from cars and property to education and wedding rings.
Gurmeet Tuli, who owns a jewellery store in the Sydney suburb of Parramatta, said his business is already hurting in a neighbourhood which is home to tens of thousands of migrants.
“My main clientele is young people who come here to study, they find work here and settle down, fall in love and want to get married,” Tuli said.
“I have not sold a single diamond ring in the past two months,” he added, noting business is down about 40% so far this year.
So critical is migration to Australia that analysts reckon the economy would have slipped into a recession last year without new arrivals to boost population growth.
AMP Capital Chief Economist Shane Oliver estimates that population growth in recent years has boosted the economy by about one percentage point per year.
But as migration stalls, education, housing and tourism sectors are seen among the worst hit.
The drought in international student arrivals, who in recent years made up about 40% of the migrant intake, is expected to hit the A$37 billion education sector, Australia’s second largest services export after tourism.
A fall in new arrivals could also dampen the construction boom in Australia’s all important housing sector, which has been fuelled by migrants in big cities like Sydney and Melbourne. — Reuters
