Migration debates have a nasty habit of forcing us into two silly camps.

Apparently you either need to defend the migration system exactly as it is or you must want to slash migration to zero. I want to do neither. 

Australia’s migration system is badly in need of reform and the government knows it.

The 2023 Parkinson Review described a system that was no longer fit for purpose after decades of piecemeal changes. 

But fixing a migration system isn’t the same thing as crying out for zero migration. 

Demographically, we need migration. 

Let’s put a number on it. If you forced me to pick a sensible level of net overseas migration for Australia in normal times, I would say around 200,000 people a year. 

I don’t mean exactly 200,000 every year – migration doesn’t work like that.

Think of a broad band, perhaps 180,000 to 240,000 net overseas migration (NOM) depending on the economy, the labour market, housing construction, infrastructure capacity and the whims of human nature (Australians and Kiwis can come and go as they please and marry who they want). 

In the year to December 2025, Australia had a NOM of 301,000 – still above the 20-year average of 232,000, but well below the post-Covid peak of 556,000.

The peak wasn’t nearly as crazy as it looks – it was mostly the result of a migration catchup after a short period of negative NOM during the pandemic. 

The federal budget expects NOM to return to 225,000 in a few years. That looks much closer to a sustainable cruising altitude. 

In a nation of 28 million people, a migration intake of 240,000 translates to less than 0.9 per cent of annual population growth.

Henry Sherrell and Lachlan Vass recently argued in Inflection Points that Australia should keep population growth from NOM below 1 per cent per year. Importantly, they admit there is no magical science behind exactly 1 per cent.

Their bigger point is that migration requires an upper boundary and public confidence that the government is actually in control. I agree with that principle. 

Zero migration remains a terrible idea 

Two years ago, I ran a thought experiment in this column asking what Australia would look like under zero migration. The answer wasn’t pretty. 

Australia is ageing, regardless of what we do with migration. Migration cannot stop ageing, it can only slow it down and, crucially, ensure that enough working-age people remain available to staff the economy and finance the growing cost of an older population.

Treasury’s Intergenerational Report projects that the share of Australians aged 65 and over will rise to 23.4 per cent by 2062-63.

At the same time, labour-force participation is expected to decline as the population ages. 

Our fertility rate is also nowhere near replacement level. This matters because tomorrow’s workforce is largely already visible. The 25-year-olds of 2046 have already been born. 

If the generations entering the workforce are smaller than the generations leaving it, there are only a few ways to compensate. We can work longer, increase participation, become dramatically more productive, or bring in working-age migrants. 

We should do the first three but will have to do the fourth as well. 

Just over one-third of Australian workers today were born overseas. In residential care services it is 59 per cent, in computer systems 58 per cent and in hospitals 44 per cent.  

Zero migration therefore doesn’t magically return Australia........

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