 Welcome to the first breakfast session of the ANU Crawford Leadership Forum. My name's Ann Evans, I'm from the ANU and this morning we're going to be talking about migration and population in a time of pandemics. I would like to start by acknowledging the traditional owners from where I join you today, the Nambri and Ngunnawal people and pay my respects to their elders past and present. I extend my respect to all First Nations people joining us for this conversation this morning. So please join me this morning in welcoming our three speakers. On our panel this morning, we have Jenny Wilkinson who is the Deputy Secretary of the Fiscal Group in Treasury. In this position, Jenny provides advice to the government on a range of policy issues including budget strategy, national security matters, the Commonwealth's financial relationships with the states and territories, retirement income policy, the deregulation agenda, social policy and policy relating to the environment, industry and infrastructure, a very broad reach. Over the course of her career, Jenny has held positions across a number of different departments and agencies. These have included running the Parliamentary Budget Office and holding senior positions in the Commonwealth Treasury, the Department of Industry, Department of Climate Change and the Department of Prime Minister and Cabinet and at the Reserve Bank of Australia. Working in these roles, she's been responsible for providing advice on a wide range of economic policy issues. Welcome Jenny. Our second panel member is Liz Ritchie. As the CEO of the Regional Australia Institute, Liz's primary goal is to make a difference through providing leadership and vision for a better future. A future that recognises regional Australia in a new light. For over 20 years, Liz has worked across the corporate government and not-for-profit sector and she specialises in leading organisational transformation to build a sustainable future. Whilst understanding the issues and opportunities impacting regional Australia, she's dedicated to reforming our regional economies as well as changing the narrative to entice more Australians to live, work and invest in regional Australia through the move to more national campaign. Good morning, Liz. Our final panel member today is Michael Willard who is the first Assistant Secretary of the Immigration Programs Division in the Department of Home Affairs. In this role, Michael is responsible for delivering permanent migration and temporary visa programs to maximise the long-term economic and social benefits to Australia. Michael has over 20 years experience working in the department across Australia and overseas. His most recent roles have included leading the department's operations in North Asia as regional director and minister councillor at the Australian Embassy in Beijing. Managing the department's overseas network operations and implementing Australia's current skilled migration system. So welcome, Mike. So this morning, we're going to be talking about migration and the Australian population in the context of the ongoing global pandemic. I'm going to first direct my first question to Jenny. We all know that international migration has been significantly impacted by COVID-19. Can you talk us through the importance of migration to Australia's population growth and how is it being affected by the COVID-19 pandemic? Sure, many thanks, Anne and thanks very much for the invitation to this session. And I'd also like to join you in acknowledging the traditional owners of the land from which we're working but also the traditional owners around Australia. So population growth, as I think most people know, is driven by a combination of natural increase, birth offset by deaths and migration. Migration has been the largest contributor to Australia's population growth for some time now and our assessment is that that's going to continue well into the future. So just to give you a few sort of statistics, over the last decade, Australia's population growth, population, sorry, has grown on average by around 1.6% per year. When we look at migration, both temporary migration and permanent migration, migrations accounted for around 60% of this growth. So around one percentage point of growth in population on average per year has been driven by migration. And looking ahead, as we presented in the 2021 intergenerational report, migrants are expected to continue to be the largest source of population growth over the next several decades, having in fact an increasing impact as the population ages and by the end of the period covered by the intergenerational report, which is around 2060, 61 migration accounts for closer to 75% of population growth. But the COVID pandemic has had just an enormous impact on population growth largely due to the impact that international travel restrictions have had on overseas migration. There's probably a small fertility impact that we can have a chat about later, but the big impact has been on migration. Population growth, as I said, averaged 1.6% over the last decade per year. Over the year to December 2020, our population growth had fallen to 0.5%. Our estimate is that over the year to June 21, it will have fallen to 0.1%. That's the slowest growth in Australia's population since 1916, which was when the last time we had a very big fall in population growth when population actually declined by 1% that year. Net overseas migration this year or last year, I should say in 2021 is expected to be lower than we've seen at any time in any year since 1946. So we're starting to see the release of statistics for the 1920 financial year, which are showing the early impact of the pandemic on overseas migration. And in the intergenerational report and also in the budget, we provided projections for the ongoing impacts of migration on population growth over the next couple of years. So what we know is that national net overseas migration, often referred to as NOM, but I'll call it Net Overseas Migration, fell from 241,000 in 2018-19 to 195,000 in 2019-20. And we're expecting net overseas migration to be negative 97,000 in 2021 and then to remain negative in 2021-22. So we're moving from a net inflow of the order of 240,000 migrants to a net outflow of the order of 100,000 migrants. Most of this decline has been caused by a decline in temporary migration, particularly international students and working holidaymakers. And it's sometimes hard when you look at the migration statistics and look at the flows to really unpack what's happening. But if you look at the stock of temporary migrants in Australia, it's quite stark. So since the pandemic began, the total number of international students in Australia has fallen by around 180,000 people. The number of working holidaymakers has fallen by around 100,000 people. And the number of temporary skilled visa holders has fallen by around 45,000 people. So we've had quite a significant fall in the stock of temporary migrants over those two years. Offsetting that, the pandemics also led to an unprecedented spike in Australians returning to Australia. One of them was my son who returned in March last year at the beginning of the pandemic as we considered that Australia would be a better place to live probably through the pandemic than the US. So usually we find that around 15,000 Australians emigrate from Australia every year. In 1920, that turned around and Australian citizens were net immigrants to Australia for the first time since World War II. We had about 40,000 Australians returned to Australia and we expect that that's also happened in 2021. So these are really unusual times we find ourselves in. In the budget forecasts, we assume there will be a return towards more normal patterns of migration from the middle of next year. And by 24-25, the migration program is expected to return or I should say net overseas migration is expected to return to around 235,000 migrants per year, which is the average level that was recorded for about a decade and a half before the pandemic. Why do we think that there'll be a return to those sorts of levels of migration? Well, I guess that's largely because we do think that Australia remains an attractive destination for both permanent and temporary migrants. The fact that we've built a reputation as a COVID safe country probably helps. We've also certainly experienced much better economic outcomes than many other countries, most other countries actually, which should also continue to make us an attractive destination. Having said that, the ongoing pandemic presents risks that are gonna have to be carefully monitored and carefully managed. While I say there will be a return, our expectation is there'll be return to more normal migration patterns and that'll be important for the recovery. There will also be policy choices about how and when to do that. The government's responsible for determining the permanent migration outcomes by setting the size and the composition of the permanent and the humanitarian migration programs. And the government also influences temporary migration through the introduction and secession of visa types and eligibility requirements and capacity limits. And I think we'll come to that later in the session. But I'll just note that the governments recently, for example, double the capacity of the seasonal worker program and the Pacific Labor scheme to help fill some labor gaps that have been affecting the agricultural sector and other regional businesses due to COVID. Right, thanks, Jenny. So we often hear that Australia's migration program helps to offset an aging population. So if migration is down, there are obvious implications for population aging, although maybe not so much if most of the decrease in migrants is due to international students and seasonal workers. But what impacts do you think that this slowing down of migration will have on Australia's future economy and budget? Yeah, so when we think about the link between migration and economic growth, we typically think about it by focusing on the effects on the aggregate size of the population, the effect on participation and the effect on productivity. I guess I also note, and there was a focus in the intergenerational report on the fact that the details of the migration program matter for both economic and fiscal outcomes. And I guess it would be remiss of me not to say that when we're thinking about the migration program, we also need to be thinking about factors other than economic factors. So there's social and humanitarian reasons while you have a migration program. But just sort of the basic way, I guess the fundamental way in which we think about it is at a high level, migration increases the size of our population and the size of the economy. Secondly, migration provides a demographic dividend because migrants are younger than the average population. So they supplement the stock of working-age people, they lift the labour force participation rate and they slow the ageing rate. And it's interesting if you look in the past, so between 2000 and 2016, the Australian-born population lowered our participation rate by about 2.1 percentage points due to the effect of ageing while the overseas-born population more than off-fit set this by increasing our participation rate by 3.6 percentage points. And on productivity, we have a good understanding how migration affects population participation. There's much more we can learn about how migration affects productivity. So coming back to the question, look, the demographic shock caused by the COVID pandemic is going to be really evident in Australia's population and economy for years to come. The economy is going to grow at a slower pace over the next 40 years than it did over the last 40 years. And that slower population growth is almost entirely due to the COVID migration effects combined with a lower fertility assumption. I guess when we think about this, the total level of GDP is relevant, but it's also, what's also relevant is per capita GDP. And per capita GDP growth is projected to be lower, but it's much closer to historical averages because it is the case that a significant share of the benefits of migration accrue to the migrants themselves. There are spillover benefits, but there's a significant contribution, sorry, significant share of accrues to them. So what's the impact going to be? The impact is going to be that we're going to have an older population, are we going to have slightly lower participation and we're going to have a smaller economy than we previously would have. The details of exactly how this plays out will depend on decisions which are taken going forward from here and particularly decisions about the size and the composition of the migration program. Great, thank you, Jenny. So that, you know, that migration that we've been talking about, international migration has impacts across Australia. So in addition to reduced international migration, we've seen recent changes in the level and the type of internal migration with some areas experiencing higher levels of movement from city to regions in response to COVID-19. So I'm going to turn to Liz now and Liz, how is this movement changing regional communities? Good morning, Ann, and good morning to my fellow panelists and all the participants here this morning. I too would like to acknowledge the traditional owners on the land. Thank you for that question. I think just before I launched straight into how it's affected regional communities, I think that myth that isn't well understood. I think for decades we've had this view that people were leaving regions in droves. And what our research has shown at the Institute in our big movers report that we launched last year in 2020 was that from the decade up until 2016, we've seen a net increase in movement to the regions over that decade to the order of about 100,000. And so, you know, at the Institute, we've been saying at the time that Australians are looking at their lives and have been, and they're looking for an opportunity seen through COVID is certainly unprecedented because this has seen a surge, if you will. So if you look at the most recent data coming out of the ABS from 2020 to March 2020, there was a net increase in the order of about 45,000. That's in a one-year period, isn't it? And an extreme surge and clearly brought about by COVID. And I guess we've seen that in particular in certain states where the experience experienced more lockdowns, shall we say, such as Victoria. But there's really two factors, I guess, to those figures as we see it. One is that, which is important, Aboriginal people are also choosing to stay in the regions. And this is also an unusual set of circumstances. Generally, we would have a much more flow of mobility between really due to COVID, regional people are making the choice to stay. And then, and the interest of city people moving into the regions, we are experiencing circumstances. As I said a little earlier, Melbourne's experienced, I guess, the greatest, has had the greatest impact and of the movement of Melbourne, 43% of those movements chose regional Victoria. So we are looking at substantial numbers in, and I guess, how is this affecting our regional communities? Well, of course, in a variety of ways. And I guess what I always love to talk about when we think about regions, they are incredibly diverse. We're talking about regional cities or communities and even more remote areas. First and foremost, there's been a few major societal trends. Just look at employment. Employment almost changed overnight. I like to say that we were catapulted into the future of work and COVID triggered this. It triggered organisations and big business think how they were operating and that the idea of presenteeism could no longer be possible. We had to look at other options. We had to be flexible, remote, hybrid work became the new norm. And what we saw is that people with that opportunity of choice chose to move to the regions to take their jobs and to move their families. And we've got countless case studies of this that we've tracked at the institute. So this has seen certainly a lift in many regional communities and it's giving people more choice. So we believe that this is an exciting time. It's not to say that it's not with downsides and with any unexpected growth, if you will, there are pressure points. And those pressure points are being felt be it in housing where we're really seeing a squeeze. Now, this perfect sense because we're not seeing regional people leave in the numbers that they would leave. We're seeing city people have a desire to move to the regions and we're seeing an uplift in investment and the house price rise in the regions as well. So it's again, it's unprecedented and it's happened really quickly. So there really wasn't time to prepare. I guess what it's shown up is that there's been an underinvestment in housing in regional Australia. And this is something that certainly we're looking at at the moment. So what is pleasing is that there are record number of construction schools coming through the system which is unfortunately, as everybody knows, it takes time to build and to manage that construction phase. So there will be a lag. Compounding that issue is also labour which we might talk to a little bit later. So housing's one factor. And of course then it's just services and amenities, health, education. As population grows and grows that quickly, there isn't time to prepare. It's important that we as policymakers and government try to get ahead of this as best we can and that we try to have data as accurate as it can be demonstrating the trends that we're seeing and areas that are more popular. We know from our research that the regional cities can be very popular locations. But we also know that those lifestyle centres around the regional cities are also experiencing that surge. So I might stop there. All right, thanks. We've got some ongoing issues with your mic, Liz. So I'm gonna turn now to Michael and we can come back to some other questions in the Q&A, I think. Michael, given the impact of migration on our labour market, how do you think a skilled migration program might look in the future? Hi, Ann, and good morning, everyone. And thanks for the chance to join you this morning. I think at a high level and skilled migration will always be driven by those three core elements that Jenny touched on, the participation, productivity and population. And if we look at skilled programs over the past few decades and if we look at what we know from our continuous survey of Australia's migrants, we still migrants provide an injection of people who are younger than our national average, who are far more likely to participate in the workforce and who have a positive impact in terms of productivity and filling skills needs. So I think at a high level, that focus will continue. As Jenny said, the programs determined each year by the government in terms of the size and composition of the skilled program. But there are some key environmental factors, I think that have been emerging in recent years that are probably worth considering. One of those is the longer-term trends in migration that we've seen in Australia and indeed globally. And that's really a shift away from migration that was more related to social policy and a shift towards migration that has a much stronger economic policy focus. And we've seen that in the composition of the permanent migration program and shifted over the years from a program that was predominantly family-related to a program that's now certainly before the pandemic is about two-thirds skilled and one-third family. Another key emerging factor in migration recently is that there is growing international competition for highly skilled migrants. It wasn't that long ago that active program and policy design for migration was really a very limited field. It's really Australia and Canada, probably leading in terms of the countries that introduced points tests for migration first in the 1970s, and then a number of other traditional migration countries such as the US and New Zealand in that space as well. We've gone from that fairly limited group of countries seeking to actively manage migration to now scores of countries with schemes for attracting skilled migrants. And it might be a focus on skill, it might be a focus on talent, it might be a focus on investment, but there's a vast array of skilled migration opportunities out there for skilled people. Positive news in that respect is that in 2019, the OECD's indicators of talent attractiveness found Australia was one of the most attractive OECD countries for highly qualified workers. And this was based on a range of factors, quality of opportunities, income and tax, future prospects, family environment, skills environment, inclusiveness and the quality of life. We know from our network of global talent officers that we have located around the world that Australia's response to COVID has generated a positive dividend in terms of our attractiveness. So since that 2019 survey, the anecdotal feedback we're getting is that Australia continues to be an attractive destination for migration. Another key element, I think that needs to be considered, is the question of the domestic population support for migration and the Scanlon-Lonash Index of Social Cohesion, which has been running annually for a number of years, did some work at the end of 2020 in response to the events of the pandemic. And what that work found was that an increased proportion of respondents to about 71% indicated that accepting migrants from many different countries makes Australia stronger. And fewer respondents regarded the immigration intake as too high. That figure was around 38%. So that domestic support is a key element to success in any migration program. And Australia has long had a far more welcoming attitude to migrants when you compare it to a lot of those, what you might term competitor countries, particularly emerging competitor countries in Europe. That may stem from the fact that Australia has one of the highest rates of overseas born in the OECD at around 30%. So those elements I think will be key factors in terms of driving what the size and composition of a school migration program looks like in years to come. In terms of this year, 21-22, program settings are really designed to maximise flexibility and to be able to respond to a range of possible circumstances that could emerge as we move through the pandemic. A couple of points to highlight, there's a number of strands to the skilled migration program. And some that have been brought forward in recent years include the Global Talent Program, which is a program that's focused on key industry sectors that attracts a lot of people who have outstanding records in research. And the sectors, there's 10 different sectors, but they're what you might term cutting edge and future focus sectors. And that focus on sectors is a change from the way the program is previously focused, which was a focus much more narrowly on specific occupations. Now, that focus on occupations or those streams of the program that allow migration according to occupations are still in play and still provide the majority of migrants. But what we've seen is a shift towards in the Global Talent Program, a shift towards industries and a future focus. Sorry, I might stop there. Thanks, Anne. So thanks, Michael. We've given that. We've got an opportunity now to reset the way we balance temporary and permanent migration. So we've already heard mention of temporary migrants today and the opportunities for migrants to become citizens at the end of that process. How will migration policy consider this changing opportunity and how we might think about that moving forward? I think a key element there, Anne, is that our permanent migration program, increasingly over the past couple of decades, is actually made up of people, a wider and wider proportion of people who are here on a temporary visa. So when they're granted a permanent visa, they may have been here for a number of years. If we look at our skilled stream, around three quarters of the skilled stream in 2019, 2020, were granted visas to people who were already in Australia. So the temporary program was a key prime for permanent migration and for long-term stay. There's a couple of pointers there in terms of something that we introduced in terms of regional migration in the past couple of years that provides an indicator, I think about the way temporary migrants can transition to a permanent visa. And those regional visas allow either employers or states and territories to nominate migrants on a provisional basis to come and live in regions, to hopefully put down routes and to connect with local communities and then transition to a permanent visa over a three to five year pathway. So that's the sort of approach in terms of that transition from a temporary to a permanent visa. It's not possible to guarantee or so that there'll be automatic transition for anyone who comes on a temporary visa because the volumes of temporary entrants have been growing so much over the past couple of decades. But that mechanism of establishing a pathway to permanent residents through a provisional visa, I think gives an insight into how that transition can be handled. Thanks, Sam. Thank you. I'd like to thank everyone for coming along this morning and particularly to thank our panelists, Jenny Wilkinson, Mike Willard and Liz Ritchie. Thank you all very much for your contributions today. And thank you for everyone attending and enjoy the rest of the forum for those of you who are continuing on to other sessions today.