Uncontrolled, Mass-migration Growth Model Driving Down Australians’ Living Standards

Written by:
11 May 2024
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“Australians today are thousands of dollars worse off, as productivity-driven economic growth has been replaced with the lazy and shortsighted growth model of uncontrolled, mass migration,” said Dr Kevin You, Senior Fellow at the Institute of Public Affairs.

New research released today by the IPA into long-term per capita economic growth trends reveals the extent of Australia’s declining living standards since 1990:

  • Real gross domestic product per capita growth has been below trend for the last eight consecutive years
    • This has cost individuals $14,700 had per capita GDP remained on the long-term trend over the period.
  • At the conclusion of the 2023 calendar year, Australia’s per capita economic growth was 3.03 per cent below its long-term trend. This difference amounts to approximately $2,800 per person.
  • To return to trend by the year 2030, real GDP per capita would need to grow at an annual average growth rate of 1.65 per cent for the next seven years.
    • This is higher than the average annual growth rate of 1.54 per cent since 1990.

“The federal government’s lazy, migration-driven growth agenda means that while the overall size of the economic pie is growing, it is driving living standards down and leaving Australians with an even smaller slice,” said Dr You.

Previous research by the IPA revealed the Australian economy has undergone a fundamental shift from sustainable, productivity-led growth to population-led growth. Throughout the 1990s, population growth only accounted for one third of total economic growth. In 2023, population growth accounted for 85 per cent of total economic growth.

“Rapid population growth is not the only way to achieve economic growth. From 1993 to 2007, per capita growth was over 2.5 per cent per year on average. This was largely driven by forward thinking, growth-oriented policies to improve productivity such as deregulation, tax reform, and privatisation,” said Dr You.

“It is incumbent upon the federal government to deliver sustainable economic growth through increased productivity, not by merely bringing in record numbers of arrivals we cannot accommodate.”

Today, GDP per capita has fallen for four consecutive quarters, meaning Australians, at an individual level, are already in a recession. This is the first time this has occurred since the early 1980s, amid a global recession.

“At a time of acute cost of living pressures, and with rapidly rising house prices and rents, the federal government’s population-led growth strategy is making it harder for Australians to get ahead,” said Dr You.

“Current policies, such as Future Made in Australia, focused on subsidising commercially unviable industries, and the implementation of the redundant federal Environmental Protection Agency, which will lead to an explosion in red-tape, will only be a further drag on productivity-led growth.”

“Coupled with the re-regulation of industrial relations and rapidly rising energy costs, the continued commitment to rapid unplanned population growth means Australians will continue to go backwards,” said Dr You.

To download the IPA’s research click here.

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