10 July 2006

Australia needs more migrants: business

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The Australian Newspaper is reporting that Australia will have to increase its migrant intake to stop the country's economy from stagnating in coming years, a leading business information company has warned.

IBISWorld said that without more migration to offset the nation's ageing population and low natural birthrate, the economy would suffer and key industries would lack sufficient staff.

The comments follow a recent increase in the number of migrants coming into the country. Migrant numbers rose by 10 per cent to more than 120,000 in June last year.

The company's Australian general manager, Jason Baker, said although Australia had the highest foreign-born population of any country in the developed world, it was increasingly likely the nation would need more migrants.

He said even a recent increase in the fertility rate still left it below the replacement level.

Without migration, the economy would groan under the weight of fewer and fewer taxpayers having to cover the cost of an increasing number of retirees, he said.

"By the 2030s, net overseas migration will be the only form of population growth in Australia, as our ageing population and low fertility rate will see the number of deaths each year overtake the number of babies born.

"If our population growth doesn't increase the economy may stagnate, with a declining workforce causing labour shortages and wage hikes.

"If that happens, we'd expect government policy to allow higher immigration levels."

Mr Baker said Australian industries in particular would suffer if migration did not increase.

He said 32 per cent of people in manufacturing were born overseas, while migrants made up 30 per cent of workers in the property and business services area.

IBISWorld, which tracks economic and business trends, said the shift of people to the coast would have a flow-on effect to certain industries.

Marine equipment, trailer, caravan and mobile home companies, and those tied to golf courses, were likely to benefit from an ageing population seeking to spend its retirement years on the coast.

However, that would also mean pressures in certain sectors, he said.

"There is already a shortage of doctors, quality schools and transport in the far outer suburbs and rural areas," Mr Baker said.

"As more and more people move out of the city, there will be an increased need for better roads, improved telecommunications, health facilities and other services - putting further pressure on the government coffers at all levels."

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