Australia's population growth plunges to lowest in a century as Covid-19 hits migration and births

The government expects Australia's overall population growth to be just 0.6 per cent next year, the lowest rate since 1916-17. PHOTO: AFP

SYDNEY - Australia's population growth is set to plunge due to the Covid-19 pandemic, which has led to a sudden stop to migrant flows and an expected drop in the birth rate.

The ban on the arrival of international visitors has caused Australia's migrant intake to plummet, marking a drastic change for a nation whose economic success has often been credited to its mass influx of new foreign residents. In addition, the economic slump is set to cause a fall in the birth rate, leaving Australia facing its lowest population increase in more than a century.

The Federal Government expects net migration - the overall population change due to long-term arrivals and departures - to be just 31,000 next year, a drop of more than 85 per cent compared with pre-pandemic levels. But the numbers could yet be lower, as the current forecast assumes that travel will resume from January, which is not certain. Net migration was 154,000 in 2019-20 and 232,000 in 2018-19.

The reduced intake will have ripple effects across the economy, crimping total consumer demand and affecting property prices and the construction sector.

An economist, Mr Chris Richardson, from Deloitte Access Economics, said the lower migration is set to reduce the annual national income by tens of billions of dollars this year and next. He said Australia should return to its strong migrant intake as soon as the Covid-19 health threat passes and borders can reopen.

"Come the end of 2021, there will probably be a quarter of a million fewer people in Australia than we've been expecting before the virus," he told SBS News.

In recent years, Australia, which has a population of about 25 million, has taken in about 160,000 permanent migrants a year, mainly made up of people on skilled worker visas and family visas. The largest source of permanent migrants in 2018-19 was India, followed by China, the United Kingdom, the Philippines, and New Zealand.

But these figures are due to plunge, as Australia currently allows only citizens and permanent residents and their immediate families to enter the country. As of Thursday, Australia had 16,303 confirmed cases of Covid-19 and 190 deaths.

The government expects Australia's overall population growth to be just 0.6 per cent next year, the lowest rate since 1916-17.

In addition to the migrant drop, the federal government is expecting Australia's fertility rate to fall due to the weaker economic outlook. In 2018, it was 1.70, slightly above the average of 1.6 for the advanced economies in the Organisation for Economic Co-operation and Development.

Professor Mark Wooden, a labour market expert at the University of Melbourne, said the economic decline caused by the Covid-19 pandemic was likely to prompt some would-be parents to choose not to have a baby but he did not expect a significant decline in the fertility rate.

"Until a vaccine arrives, people will be putting off a lot of decisions, one of which is having children," he told The Sydney Morning Herald.

The falling fertility rate prompted calls for the federal government to consider re-introducing its "baby bonus" - a cash handout to new parents introduced in 2004. The bonus was credited with causing an increase in the fertility rate to more than 2.0 before payments were limited to lower-income families in 2009 and effectively abolished in 2013.

The Treasurer, Mr Josh Frydenberg, said he wanted to support families to have children but was not planning to introduce a new baby bonus.

"The more children that we have across the country, together with our migration, we will build our population growth and that will be good for the economy," he told the National Press Club.

"The best thing that we can do to encourage more children being born across the country is obviously to create a strong economy for them to be born into."

Mr Frydenberg also flagged that he wanted Australia's pre-pandemic migrant levels to resume when the health situation allows.

"We're all beneficiaries of Australia's strong multicultural diverse environments and long may that continue," he said.

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